The manager of Mapletree Logistics Trust (MLT) has reported distribution per unit (DPU) of 2.248 cents on an enlarged unit base for its 2QFY2022/2023 ended Sept 30, 3.5% higher than the DPU of 2.173 cents in the corresponding period the year before.
Amount distributable to unitholders was $108 million, 15.6% higher year-on-year.
Similarly, for the 1HFY2022/2023, the amount distributable to unitholders grew 16.4% y-o-y to $216.6 million while DPU gained 4.2% to 4.516 cents, due to contributions from the enlarged portfolio.
Gross revenue for the quarter at $183.9 million is an increase of 11.4% y-o-y. Similarly, net property income saw a 10.8% rise to $160 million.
The growth was driven by higher revenue from existing properties and contributions from accretive acquisitions completed in 1QFY2023 and FY2022.
Overall, the growth was moderated by the depreciation of foreign currencies including Japanese yen and Korean won against the Singapore dollar. “At the distribution level, the impact of weakening currencies is mitigated through the use of foreign currency forward contracts to hedge the income from overseas assets,” the manager adds.
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Property expenses increased by $3.2 million or 15.7%, mainly attributable to acquisitions completed in 1QFY2022/2023 and FY2021/2022 as well as higher allowance for doubtful receivables.
Net property income increased by $15.6 million or 10.8%. Borrowing costs increased by $8.4 million or 33.7%, mainly due to incremental borrowings to fund FY2022/2023 and FY2021/2022 acquisitions as well as higher average interest rate on account of the rising interest rate environment.
During 2QFY2022/2023, MLT completed the acquisition of two land parcels in Malaysia, which are targeted for amalgamation with MLT’s existing Subang 3 and 4 assets for the development of the first mega modern warehouse in Subang Jaya, Selangor. This brings the total number of assets in MLT’s portfolio to 186 with a book value of $12.9 billion as at Sept 30.
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The portfolio achieved a positive average rental reversion of approximately 3.5%, contributed by renewal or replacement leases from across almost all of MLT’s markets. As at the end-Sept, the weighted average lease expiry for the portfolio is approximately 3.3 years.
Portfolio occupancy declined slightly to 96.4% from 96.8% in the previous quarter. This was due to lower occupancies in Singapore, China and Japan, partly offset by higher occupancies in South Korea and Malaysia.
Although overall leasing demand in MLT’s markets has remained resilient, supporting stable occupancy and rental rates, higher interest rates and depreciation in regional currencies against the Singapore dollar have negatively affected MLT’s distributable income.
“Given the continued rise in interest rates and strength of the Singapore dollar, it is expected that these headwinds will continue to have a negative effect on MLT’s financial performance in the near term,” the manager adds.
MLT will pay a distribution of 2.248 cents per unit on Dec 13 for the period from july 1 to Sept 30.
Units in MLT closed 3 cents higher or 2.1% up on Oct 25 at $1.46.
