Mapletree Industrial Trust Is Offering Relief Package To Its Tenants



Key Highlights:


  • Offering package to help its tenants through this Covid-19 period

  • Occupancy rate remains stable

  • DPU could be impacted in the near-term


1. Dividends


Mapletree Industrial Trust's share price was down close to 22% from its 52-week high. Despite the price correction, the yield still remains low at 5.15%, which is still way below its historical average yield of 6.77%.


Mapletree Industrial Trust has been delivering strong results over the years. The DPU has been in the uptrend in the past seven years. With the recent relief package to help its tenants, we would expect a 5% cut on its distributable income.

Source: reitscompass's REITs Insider ratings


2. Portfolio


Portfolio occupancy went up slightly to 90%. It has been remained steady due to better occupancies for its hi-tech and business park buildings. With the recent diversification into data centres, it helps the trust to stabilise its earnings and improve the overall portfolio quality. Besides, its gearing remains healthy at 33%, which gives the trust ample room for future acquisitions.


It is currently trading at a high price to book ratio of 1.6.



3. Growth catalyst


The trust continues to deliver strong and positive rental reversion. In addition, the management has a strong track record on enhancing its value through redevelopments. Telok Blangah cluster, 30A Kallang Place property on top of a carpark were among the past successful redevelopment, which help to drive upside in valuations and earnings. Moving forward, it is commencing its biggest redevelopment of Kolam Ayer Cluster into a high-specification industrial property.


Summary


Mapletree Industrial Trust has been a growth REIT in the past few years. The management managed to grow its distributions over the years. It is one of the S-REITs that we like. However, we think that the current pricing is at the very high side despite the recent correction.


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