The lowered price target and rating downgrade reflect a more cautious outlook on Mapletree Industrial Trust' s near-term financial performance. JPMorgan' s analysis indicates that the trust' s current trajectory may not align with the more optimistic views held previously by the market and the firm itself. The report suggests that the trust could face further de-rating if it becomes more difficult to counter the obsolescence risks associated with its properties.

Revenue for quarter rises due to contributions from newly acquired mixed-use facility in Tokyo, among others

 

THE distribution per unit (DPU) for Mapletree Industrial Trust : ME8U -1.34% (MIT) rose 1.5 per cent to S$0.0341 for its third quarter ended Dec 31, 2024, from S$0.0336 in the prior year.

 

Revenue for the quarter was up 2 per cent at S$177.3 million, from S$173.9 million in the year-ago period.

 

This was due to contributions from a newly acquired mixed-use facility in Tokyo, the completion of fitting out works of a data centre in Osaka, as well as new leases and renewals across various property clusters, the trust&rsquo s manager said on Wednesday (Jan 22).

 

Net property income (NPI) in Q3 grew 2.6 per cent on the year to S$133.2 million, from S$129.9 million. Distributable income rose 2 per cent on the year to S$97.1 million, from S$95.2 million.

 

The distribution will be paid out on Mar 14, after books closure on Feb 3.

 

In Q3, the industrial trust completed the acquisition of a freehold mixed-use facility in Tokyo for 14.5 billion yen (S$125.8 million), &ldquo further (enhancing) MIT&rsquo s geographical and income diversification&rdquo , the manager said.

 

Its portfolio by assets under management stood at 47.3 per cent in Singapore, 46.1 per cent in North America and 6.6 per cent in Japan.

 

Overall portfolio occupancy slid to 92.1 per cent in Q3, from 92.9 per cent in the second quarter.

 

Meanwhile, the weighted average lease to expiry of its overall portfolio rose to 4.5 years as at Dec 31, 2024, from 4.4 years as at Sep 30. This was mainly due to a lease extension for one of its properties in Richmond, US.

 

Data centres the standout performers among S-Reits in Q3 analysts have mixed views on the sector overall for Q4

 

Lily Ler, chief executive officer of the manager, noted that MIT &ldquo continued to deliver healthy financial returns underpinned by our steady portfolio rebalancing initiatives in Japan and resilient operational performance&rdquo , despite macroeconomic uncertainties.

 

Looking ahead, the manager expects numerous risks, such as policy uncertainty, persistent inflation and escalation of geopolitical tensions, to remain. Increasing property operating expenses and elevated borrowing costs may continue to exert pressure on distributions, the manager said. It will adopt cost-mitigating measures and focus on tenant retention to maintain a stable portfolio occupancy level, as well as prudent capital management to balance the risks and costs in the uncertain macroeconomic environment, it added.