Mapletree Industrial Trust (MINT) ME8U has announced a distribution per unit (DPU) of 3.39 cents for 1QFY2024 ended June 30, an increase of 1.8% q-o-q.
However, this is a 2.9% decrease from the 3.49 cents DPU from 1QFY2023. This is a result of the private placement on May 25, and distribution reinvestment plan for distributions from 3QFY2022 to 3QFY2023.
Gross revenue for 1QFY2024 increased by 1.7% y-o-y to $170.6 million while net property income (NPI) grew 1.5% q-o-q and 0.7% y-o-y to $130.8 million, which was mainly attributed to lower property operating expenses.
The amount available for distribution to unitholders increased by 3.1% q-o-q to $89.9 million, but fell by 2.5% y-o-y as the higher net property income was offset by higher borrowing costs.
The contributions from new leases across various property clusters were partially offset by higher property operating expenses.
The average rental rate of the Singapore portfolio increased to $2.18 per square foot (psf) per month in 1QFY2024 from $2.16 psf per month in 4QFY2023.
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In addition, positive rental revisions for renewal leases were achieved across most property segments in Singapore with a weighted average rental revision rate of about 5.3%. The average rental rate of the North American portfolio also increased to US$2.41 ($3.20) psf per month in 1QFY2024 from US$2.40 psf per month in 4QFY2023.
The aggregate leverage ratio as at June 30 stood at 38.2%.
On July 6, the REIT declared an advance distribution of 2.48 cents per unit for the period from April 1 to June 5, and unitholders will receive a distribution of 0.91 cents per unit for the period from June 6 to June 30.
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MINT says that global growth was projected to slow substantially to 2.1% in 2023 before a tepid recovery to 2.4% in 2024. Numerous risks, such as further global financial stress, persistent inflation, geopolitical tensions and conflict and social unrest could cause the global growth forecast to decline further.
Therefore, increasing property operating expenses and borrowing costs could continue to exert pressure on distributions. MINT says it will adopt cost-mitigating measures while focusing on tenant retention to maintain a stable portfolio occupancy level.
As at June 30, MINT’s overall portfolio occupancy stood at 93.3%, 1.6 percentage points lower q-o-q. Its weighted average lease expiry (WALE) stood at 3.9 years by gross rental income (GRI).
On MINT’s entry into the Japanese data centre market, Tham Kuo Wei, CEO of the manager, says that the proposed acquisition of the data centre in Osaka “underscores our strategic focus of strengthening the portfolio through accretive acquisitions and diversifying our portfolio geographically. The addition of a high-quality data centre with a long-term lease to an established data centre operator will improve the stability of MINT’s income stream. We will press ahead with our portfolio rebalancing efforts as we navigate the macroeconomic headwinds.”
Units in MINT closed flat at $2.29 on July 26.
