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Mapletree Industrial Trust's Valuation Is Getting Expensive

Key Highlights:

  • Mapletree Industrial Trust's 3Q19 DPU grew 2.9%

  • The annualised yield and price to book ratio are 4.5% and 1.76 respectively

1. Dividends

Net property income and distributable income grew 14% to $102.6m. The increase was mainly due to:

  • Contribution from 18 Tai Seng and 7 Tai Seng Drive

  • Better performance of 30A Kallang Place after redevelopment

  • Lower property maintenance expense

The annualised yield is 4.5%, which is at its historical low.

Source: reitscompass's REITs Insider ratings

2. Portfolio

Portfolio occupancy went up slightly to 90.9%, mainly due to better occupancies for its hi-tech and business park buildings. With the recent acquisition of assets in US, the portfolio leverage inched up to 34.1%. The interest cost is 3%, with 63.8% of the loans are on fixed rates.

It is currently trading at a high price to book ratio of 1.76.

3. Growth catalyst

Moving forward, the REIT will kick start its largest redevelopment project at Kolam Ayer 2 Cluster into a new high-tech industrial asset. The development will take about two years, the good news is 24.4% of the space is pre-committed by a global medical device company.

Besides, the acquisition of the 13 data centres in US would help the REIT to grow its hi-tech segment and to capture potential opportunities in the fast-growing data centre sector.


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, any potential growth in the share price is limited by the "expensive" valuation.

We have launched a new feature for the premium subscribers - REITs Numerical Scoring (R.N.S.), which we use as the core strategy to select REITs with good fundamentals.

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