In a Wednesday report, lead analyst Derek Tan notes positive revenue and net property income (NPI) growth over the latest quarter, with distributable income boosted by a partial quarter contribution from the recent acquisition of a 40% stake in a portfolio 14 data centres in the US.
See: Mapletree Industrial Trust expands investment strategies to data centres
“The increase in revenue was mainly driven by the contribution from the built-to-suit project for HP Singapore (HP), partially offset by lower portfolio occupancy (90.1% in 3Q18). Keeping a tight rein on cost, MIT’s NPI grew faster,” recaps Tan.
While the DPU of 2.88 cents for the quarter is only 1.8% higher compared to a year ago, Tan remains optimistic on MIT’s outlook with expectations of committed occupancies to improve further for the trust’s new-builts.
These are namely the development project at 30A Kallang Place and Kallang Basin 4 cluster, which are expected to see completion in the coming months and are said to have seen a pick-up in leasing enquiries, with their take-up rates having improved slightly and standing at about 12%.
The analyst also believes negative rental reversionary trends should be bottoming out for MIT going into 2H18 as industrial supply tapers off, and highlights ample capacity for the trust to grow given its stable balance sheet post the acquisition of the US data centres.
As at 11.44am, units in MIT are trading 1 cent higher at $2.08, or distribution yield of 5.7% for FY18.
