Mapletree Industrial Trust (MIT) reported an inline set of 3QFY18 results, with gross revenue and NPI increasing 8.3% and 11.7% YoY to S$91.5m and S$70.9m, respectively. This was underpinned by revenue contribution from the build-to-suit project for HP Singapore, but partially offset by weaker occupancy in its portfolio. DPU of 2.88 S cents represented steady growth of 1.8% YoY.

For MIT’s 9MFY18 performance, its gross revenue jumped 7.9% to S$272.8m and this constituted 75.9% of our FY18 forecast; while DPU grew 3.4% and met 74.3% of our full-year projection. MIT’s average Singapore portfolio passing rental rate inched up 1.5% QoQ to S$1.97 psf/month.

There were mixed rental reversions for renewal leases, as these came in negative for Flatted Factories (- 1.6%), Hi-Tech Buildings (-0.4%) and StackUp/Ramp-Up Buildings (-1.7%) but was positive for Business Parks (+0.8%).

Looking ahead, MIT will see a full-quarter contribution in 4QFY18 from its joint acquisition of a portfolio of data centres in the U.S. with its sponsor. The occupancy for this portfolio was 97.4%, as at 31 Dec 2017, higher than its Singapore portfolio (90.1%). We will provide more details after the analyst conference call.

Maintain HOLD and S$2.06 fair value estimate on MIT.

Source: OCBC Research - 24 Jan 2018