Mapletree Industrial Trust (MINT) has reported a distribution per unit (DPU) of 3.36 cents for its 2QFY2023 ended September, down 3.2% y-o-y.
Unitholders can expect to receive their quarterly DPU for the period on Dec 12.
Gross revenue and net property income for the quarter grew 12.8% and 8.3% y-o-y to $175.5 million and $130.3 million respectively.
The amount available for distribution to unitholders for 2QFY2023 increased by 0.7% y-o-y to $89 million, primarily driven by the contribution from the acquisition of 29 data centres in the US and partially offset by higher property operating expenses and borrowing costs.
The REIT’s average overall portfolio occupancy for the quarter increased to 95.6% from 95.3% in the preceding quarter, attributed to the improvement in the Singapore portfolio.
The average occupancy rate for the Singapore portfolio for 2QFY2023 rose to 96.8% from 96.0% in the preceding quarter as higher occupancies were registered across most property segments.
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The average occupancy rate for the North American Portfolio for 2QFY2023 decreased to 93.1% from 94.0% in the preceding quarter. The decline was due to the non-renewal of lease by its sole tenant at 2 Christie Heights, Leonia, which contributed about 0.4% to MINT’s portfolio gross revenue in FY2021/2022. The manager is in discussions with a prospect to take up the vacant space.
As at Sept 30, about 74.2% of MINT’s gross borrowings of $2.9 billion had been hedged through interest rate swaps and fixed rate borrowings, which will reduce the impact of interest rate fluctuations on distributions.
The REIT’s aggregate leverage ratio decreased quarter-on-quarter from 38.4% to 37.8% as at Sept 30 as a result of the redemption of the $45 million 3.65% 10-year medium term notes with cash, which matured on Sept 7. The weighted average all-in funding cost for 2QFY2023 was 2.9%, as compared to 2.5% for the previous quarter due to higher benchmark reference rates.
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The manager had raised proceeds of $40.2 million from the distribution reinvestment plan (DPR) for 1QFY2023 Distribution, which represented a take-up rate of 42.9%. The DRP will continue to be applied for the 2QFY2023 distribution to finance progressive funding needs of the redevelopment project at 161, 163 & 165 Kallang Way.
As increasing property operating expenses and borrowing costs continue to exert pressure on distributions, the REIT manager will adopt cost-mitigating measures while focusing on tenant retention to maintain a stable portfolio occupancy.
Units in MINT closed 1 cent higher or 4.63% up on Oct 26 at $2.26.
