Following Mapletree Logistics Trust (you can read my review of its 3Q and 9M FY2024/25 results released on Tuesday here), Mapletree Industrial Trust (SGX: ME8U) is the second of the trio of Mapletree REITs to release its results yesterday (22 January) evening.

Listed on the Singapore Exchange since October 2010, and subsequently included as one of the constituents of Singapore's benchmark index, the Straits Times Index in June 2020, Mapletree Industrial Trust (MIT) invests in industrial (including hi-tech buildings, business park buildings, flatted factories, stack-up/ramp-up buildings, and light industrial buildings) and data centre properties.

As of 31 December 2024, MIT's portfolio comprises of 56 properties in North America (including 13 data centres held through the joint venture with Mapletree Investments Pte Ltd), 83 properties in Singapore, and 2 properties in Japan, with a total assets under management of S$9.2 billion.

In this post, you'll find my review of MIT's latest financial figures, portfolio occupancy and debt profile, as well as its distribution payout to unitholders:

Financial Figures (3Q FY2023/24 vs. 3Q FY2024/25, and 9M FY2023/24 vs. 9M FY2024/25)

In this section, you will find a review of MIT's financial figures for the 3rd quarter, as well as for the first 9 months of FY2024/25 compared against that reported in the respective financial periods a year ago:

3Q FY2023/24 vs. 3Q FY2024/25:

My Observations: MIT reported a stable set of results for the 3rd quarter – with its gross revenue, net property income, and distributable income to unitholders up by about 2% compared to the same time period a year ago.

The 2.0% year-on-year increase in gross revenue to S$177.3 million can be attributed to contribution from the mixed-use facility in Tokyo acquired in October 2024, higher revenue from the completion of the second and third phases of fit-out works at Osaka Data Centre, along with new leases and renewals from its existing properties in Singapore and North America.

As a result of a lower percentage increase in its property operating expenses (by 0.2% year on year, from higher recoverable utility costs) compared to its gross revenue (which was up by 2.0% year on year), MIT's net property income saw a 2.5% year-on-year growth to S$133.2 million.

This led to its distributable income to unitholders improving by 2.0% year on year to S$97.1 million.

9M FY2023/24 vs. 9M FY2024/25:

My Observations: Similar to its performance for the 3rd quarter, MIT's financial performance for 9M FY2024/25 also saw a low single-digit percentage improvement compared to last year.

Gross revenue was up by 3.0% year on year to S$534.0 million as a result of contributions from Osaka Data Centre, mixed-use facility in Tokyo, as well as from new leases and renewals across various property clusters.

As property operating expenses saw a higher percentage growth (by 3.3%) compared to gross revenue (by 3.0%), mainly attributed to higher property maintenance, recoverable utility costs, and property taxes, its net property income saw a lower percentage improvement (by 2.8%) to S$400.2 million.

Portfolio Occupancy Profile (2Q FY2024/25 vs. 3Q FY2024/25)

MIT boasts a very strong portfolio occupancy profile of above 90% over the quarters, along with a well-staggered lease expiry (meaning it does not have a high percentage of leases due for renewal in a single year).

The following table is the industrial REIT's portfolio occupancy profile for the 3rd quarter of FY2024/25 ended 31 December 2024 compared against that recorded in the previous quarter (i.e., the 2nd quarter of FY2024/25) ended 30 September 2024 to find out if it has continued to remain resilient:

My Observations: MIT's portfolio occupancy saw a 0.8 percentage point (pp) dip to 92.1%, as occupancy rates of all its property types except for flatted factories (which 0.4pp to 98.1%) recorded slight declines between compared to the previous quarter – a slight negative here.

The occupancy rates (in brackets) of the different property types as at the end of 3Q FY2024/25 is as follows: Data Centres (91.6%), Hi-Tech Buildings (85.6%), Business Park Buildings (80.1%), Flatted Factories (98.1%), Stack-up/Ramp-up Buildings (96.7%), Light Industrial Buildings (52.0%)

Lease expiries are well-spread out, with 2.7% of leases due for renewal in the final quarter of FY2024/25. Between FY2025/26 and FY2027/28 (3 financial years), it has an average of about 18.4% of leases due for renewal each year, with the remaining 42.2% of leases due for renewal only in FY2028/29 or later.

Finally, the REIT's top 10 tenants contribute about 29.8% towards its gross rental income, with its top tenant (HP) contributing 5.9%.

Debt Profile (Q2 FY2024/25 vs. Q3 FY2024/25)

Besides its strong portfolio occupancy profile, the same can also be said for its debt profile, where it has remained healthy over the quarters (with its aggregate leverage maintained at a 30+% level, as well as having more than 80% of its borrowings hedged at fixed rates – which helped to mitigate some impact from the rising interest rate environment a few years ago).

Has MIT's debt profile continued to remain healthy for the current quarter under review? Let us find out in the table below, where you'll find a comparison of the statistics recorded for the current quarter (i.e., 3rd quarter of FY2024/25 ended 31 December 2024) against that recorded in the previous quarter 3 months ago (i.e., 2nd quarter of FY2024/25 ended 30 September 2024):

My Observations: A slightly mixed set of statistics in my opinion – with aggregate leverage up slightly to 39.8% (mainly due to higher borrowing costs relating to the Japan portfolio), but average cost of debt dipped by 0.1pp to 3.1%.

Despite of that, MIT's aggregate leverage continues to remain heathy – where, at 39.8%, it still remains a good debt headroom before the regulatory level of 50.0% is reached.

It does not have any borrowings due for refinancing in the final quarter of FY2024/25. However, in FY2025/26, it has 24% of borrowings due for refinancing (and these borrowings should be refinanced with lower interest rates as the US Federal Reserve have announced a 1% cut in benchmark borrowing rates in the calendar year 2024), with another 17% and 24% of borrowings due for refinancing in FY2026/27 and FY2027/28 respectively. The remaining 35% of borrowings will be due for refinancing only in FY2028/29 or later.

Distribution Payout to Unitholders

Similar to Mapletree Logistics Trust, the management of Mapletree Industrial Trust also pays out a distribution to the unitholders on a quarterly basis (in fact, they are one of the few REITs that have continued to pay out a distribution to the unitholders at such a frequency).

The following table is a comparison of the distribution payout declared for 3Q FY2024/25 against that declared a year ago:

Just like in the previous quarter, the distribution reinvestment plan will be applied – meaning you have a choice to receive your distributions in a form of units of the REIT, cash, or a combination of both. More details will be made available by the REIT shortly.

If you are a unitholder of the REIT, do take note of the following dates on its distribution payout:

Ex-Date: 31 January 2025
Record Date: 03 February 2025
Payout Date: 14 March 2025

CEO Ms Lily Ler's Comments & Outlook (from the REIT's Press Release)

"Despite the macroeconomic uncertainties, MIT continued to deliver healthy financial returns underpinned by our steady portfolio rebalancing initiatives in Japan and resilient operational performance. We remain committed to enhancing the resilience of our portfolio through proactive capital management and tenant retention while executing our growth strategy through accretive acquisitions and selective divestments of non-core assets."

Closing Thoughts

Overall, it was a decent set of results reported by MIT, where its financial performance both for the 3rd quarter and for the first 9 months of FY2024/25 recorded a low single-digit improvement. The same can also be said for its distribution payout to unitholders.

While slight negatives were noted in its portfolio occupancy (where it dipped by 0.8pp compared against the previous quarter to 92.1%), and aggregate leverage (which inched up by 0.7pp compared against the previous quarter to 39.8%), but the former is still considered to be a high level (as it is above 90%), and the latter is a good distance away from the regulatory limit of 50.0%.

Looking ahead, I am of the opinion that, barring unforeseen circumstances, MIT should be able to report a similar set of financial results and distribution payout (a low single-digit percentage improvement on a year-on-year basis) for the 4th quarter and full year. I also note that 24% of borrowings will be due for refinancing in FY2024/25, which could be refinanced at lower rates, as benchmark borrowing rates have been cut by 1% by the US Federal Reserve last calendar year (i.e., 2024) – and this could translate into further improvements in its distribution payout; however, this may be partly offset by an enlarged unit base as a result of the REIT's distribution reinvestment plans over the last few quarters.

With that, I have come to the end of my review of MIT's latest results for 3Q and 9M FY2024/25. Do take note that all opinions in this post are purely mine which I'm sharing for educational purposes only. They do not represent any buy or sell calls for the REIT's units. You should always do your own due diligence before you make any investment decisions.

Related Documents

• Press Release
• Financial Statements
• Presentation Slides

Disclaimer: At the time of writing, I am a unitholder of Mapletree Industrial Trust.

The post Mapletree Industrial Trust's 3Q & 9M FY2024/25 Results Review first appeared on The Singaporean Investor.