Mapletree Industrial Trust's property at Changi Business Park, Singapore. (Photo: REITsWeek)Mapletree Industrial Trust's property at Changi Business Park, Singapore. (Photo: REITsWeek)

Mapletree Industrial Trust announced on 26 January that it has achieved a distribution per unit (DPU) of 2.82 Singapore cents for its 3QFY15/16 an increase of 5.6% over the DPU of 2.67 cents for 3QFY14/15.

This came on the back of a distributable income of SGD50.3 million for the period that spanned 1 October 2015 to 31 December 2015, a year-on-year increase of 9.5% from SGD46.0 million.

Portfolio occupancy improved to 94.7% from 93.8% in the preceding quarter while average portfolio passing rent increased to SGD1.89 per square foot per month (psf/mth) from SGD1.88 psf/mth in the preceding quarter.

“The increase was driven by positive rental revisions for renewal leases and higher rental rates secured for new leases at the flatted factories and business park buildings segments during the quarter. The portfolio’s retention rate was also higher at 84.2%, up from 70.3% in the preceding quarter”, said the Singapore-listed industrial REIT.

As at 31 December 2015, the REIT’s aggregate leverage ratio was at 29.3%. “The application of the DRP over the last three years had contributed to the low aggregate leverage ratio. As Mapletree Industrial Trust has sufficient financial capacity to support potential growth opportunities in the near term, the manager will suspend the application of the DRP after the 3QFY15/16 distribution”, it said.

“Looking ahead, the weakening global economic outlook, rising interest rate and large supply of industrial space in Singapore would exert downward pressure on rental revenue”, said the REIT in its statement. “We remain focused on retaining tenants and mitigating the effects of upward cost adjustments, while continuing to be prudent in capital management”, it added.

Units of Mapletree Industrial Trust finished the trading day 1% lower from its previous close on the Singapore Exchange to end at SGD1.50.

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.