Heavyweight Industrial REIT Mapletree Industrial Trust (MIT) (SGX:ME8U) has achieved a distributable income of S$151.0 million for the financial year from 1 April 2012 to 31 March 2013. The figure represents a year-on-year increase of 14.6 percent from S$131.7 million. DPU stands at 9.24 cents, a climb of 9.9 percent higher from the same period last year.

MIT has 83 properties valued at S$2879.9 million as of March 2013

MIT has attributed the healthy numbers to increased rental revenue and higher occupancies at its portfolio of industrial properties. Distributable income and DPU for 4QFY12/13 were S$38.9 million and 2.37 cents respectively, representing an increase of 3.4 percent and 2.2 percent over the preceding quarter.

MIT expects the numbers to remain plump over the next 2 years. Mr Tham Kuo Wei, CEO of the Manager said, “The build-to-suit (BTS) developments for Kulicke and Soffa and Equinix Inc. as well as the two asset enhancement initiatives at Woodlands Central and Toa Payoh North 1 clusters are expected to increase our rental income over the next two years".

Lease figures are showing signs of improvements too. Average passing rent for its properties continued to increase from S$1.61 per square foot per month to S$1.68 per square foot per month. Average portfolio occupancy also improved from 95.2 percent to 95.4 percent in 4QFY12/13.

Positive rental revisions of 30.2 percent, 12.7 percent and 35.6 percent were achieved for the Flatted Factories, Business Park Buildings and Stack-up / Ramp-up Buildings segments respectively. As at 31 March 2013, MIT’s Portfolio remained diversified with no single tenant and trade sector accounting for more than 4.5 percent and 13.7 percent of gross rental revenue respectively.

However MIT has given the caution that such rise in rental rates cannot be expected to continue and that more moderate rises should be expected in the future. "In the longer term, the large pipeline supply of industrial space may exert downward pressure on rental rates", it said in a press statement.

To mitigate this, MIT has indicated that it will be working towards securing as much advance renewals of expiring leases as possible and locking in longer lease duration in order to increase the portfolio’s weighted average lease to expiry.

Units of MIT closed the trading day down slightly at S$1.56. Eligible unit holders can expect to receive their quarterly DPU in cash or units for the period 1 January to 31 March 2013 by 4 June 2013.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.