DESPITE the challenging operating environment amid the uncertain nature of the ongoing Covid-19 pandemic, Mapletree Industrial Trust (MIT) remains resilient, thanks to its large and diversified tenant base, said its manager on Wednesday.

 

It said in a corporate update filed with the Singapore Exchange (SGX) that this diversification ensures that it is not overly dependent on any single tenant or trade sector while it focuses on tenant retention to maintain a stable portfolio occupancy.

 

MIT currently has more than 2,000 tenants across some 115 properties and six property segments: data centres, flatted factories, hi-tech buildings, stack-up/ramp-up buildings, business-park buildings and light industrial buildings.

 

MIT' s manager also noted the trust' s strong balance sheet, with more than S$600 million of committed facilities available and an interest coverage ratio of 6.4 times for Q4 FY20/21.

 

The trust recently completed the acquisition of a data centre in Virginia, United States. Meanwhile, the redevelopment of the Kolam Ayer 2 Cluster remains on track for completion in the second half of 2022.

 

MIT' s manager noted that while business sentiment among local firms in Q2 2021 turned positive after four consecutive quarters in negative territory, the optimism was limited to the financial, manufacturing and wholesale sectors.

 

However, data centres are considered a resilient asset class with growth opportunities. The manager cited that CBRE is expecting investment in data centres in North America to increase this year, based on strong revenue growth projection.

 

Meanwhile, new and evolving technologies such as 5G, edge computing and Internet of Things will continue to drive interest from operators to diversify their portfolios to serve smaller secondary and tertiary markets, said MIT' s manager.

 

MAPLETREE Industrial Trust (MIT), for its fourth quarter ended March 31, posted a distribution per unit (DPU) of 3.30 Singapore cents, indicating a 15.8 per cent year-on-year (y-o-y) increase from 2.85 Singapore cents in the corresponding period last year.

 

Revenue in Q4 FY20/21 rose 18.9 per cent y-o-y from S$101.8 million in Q4 FY19/20 to S$121.06 million. Net property income (NPI) increased 17.3 per cent y-o-y to S$91.81 million, from S$78.26 million the previous year.

 

Of the increase in revenue, MIT' s manager said in its results announced on Thursday that this was " mainly due to the consolidation of revenue from the 14 data centres in the US previously held under MRDCT (Mapletree Redwood Data Centre Trust)" .

 

However, the effect was partly offset by rental reliefs granted to eligible tenants under the Covid-19 (Temporary Measures) Act 2020, and the redevelopment of its property, Kolam Ayer 2, into a high-tech industrial precinct, it added.

 

Net loss for the quarter stood at S$45.8 million, compared with a profit of S$170.74 million in the same period last year.

 

MIT' s manager said that this was due to the provision for deferred tax expense on its wholly-owned data centres in North America, as well as net fair value loss on investment properties and investment property under development recognised during the period.

 

However, the provision recorded had no impact on distributions distributable income stood at S$70.75 million in the fourth quarter, up 2.3 per cent from S$69.15 million in the corresponding period last year.

 

For the full year, MIT' s DPU increased 2.5 per cent year-on-year, from 12.24 Singapore cents to 12.55 Singapore cents in FY20/21.

 

Revenue gained 10.2 per cent y-o-y to S$447.2 million from S$405.86 million in FY19/20 NPI climbed 10.4 per cent to S$350.99 million from S$318.07 million.

 

On a quarter-on-quarter (q-o-q) basis, average overall portfolio occupancy for the fourth quarter increased to 93.7 per cent, from 93.1 per cent in the preceding quarter.

 

This was due to the completion of a US data centre in Richmond, Virginia, as well as an improvement in average occupancy for its Singapore portfolio, which increased by 0.7 percentage points q-o-q to 92.9 per cent.

 

As at March 31, MIT' s total assets under management stood at S$6.8 billion, comprising 87 industrial properties in Singapore and 28 properties in North America. Its portfolio spans assets such as data centres, high-tech buildings, business park buildings, and more.

 

Tham Kuo Wei, chief executive the MIT' s manager, said: " FY20/21 was fraught with uncertainty and challenges for businesses because of the Covid-19 pandemic. We will continue to support our tenants through this uncertain period as they gradually recover from adverse global economic conditions."

 

Nonetheless, he added that " despite the challenging environment, MIT has demonstrated resilience, which is underpinned by its large and diversified tenant base" .

 

" We remain focused on rebalancing the portfolio with accretive acquisitions and developments of high specification industrial facilities and data centres to enhance its resilience," he said.

 

The distribution is expected to be paid out on June 8, following books closure at 5pm on May 7.