Mapletree Industrial Trust (MIT) reported its 1QFY20 results which met our expectations. Gross revenue and NPI jumped 8.8% and 12.2% YoY to S$99.6m and S$77.9m, respectively, with the latter forming 24.9% of our FY20 forecast. DPU of 3.10 S cents represented growth of 3.3% YoY and constituted 24.4% of our full-year forecast.

Operationally, MIT’s portfolio occupancy improved 0.6 ppt QoQ to 90.8% (Singapore: +0.7 ppt to 90.5%; US: unchanged at 97.4%). However, rental reversions were weak for renewal leases, with all segments recording negative rental reversions.

This came in at -4.0% for Flatted Factories, -8.2% for Hi-Tech Buildings, -4.5% for Business Park Buildings and -9.7% for Stack-up/Ramp-up Buildings. We currently have a HOLD rating and S$2.06 fair value on MIT.

Source: OCBC Research - 24 Jul 2019