Blue-chip logistics REIT Mapletree Logistics Trust (SGX:M44U) released its latest financial results for the third quarter, as well as for the first 9 months of the financial year 2020/21 ended 31 December 2020 after market hours yesterday (25 January 2021.)

I like the REIT for the fact that they are still continuing to report its financial results on a quarterly basis (despite not mandated to do so), and its also one of the few REITs that continues to pay out its unitholders once every three months.

So, how did the logistics REIT perform in terms of its financial results, portfolio occupancy and debt profile, as well as its distribution payouts to unitholders this time round?

In today’s post, you will find an in-depth analysis of the REIT’s latest set of results, along with my personal thoughts about it to share…

Financial Performance (Q3 FY2019/20 vs. Q3 FY2020/21, and 9M FY2019/20 vs. 9M FY2020/21)

First, let us take a look at the REIT’s latest set of financial results, both on a quarter-on-quarter (q-o-q), as well as on a year-on-year (y-o-y) basis, to find out how it has fared:

Q3 FY2019/20 vs. Q3 FY2020/21:

Q3 FY2019/20Q3 FY2020/21% Variance
Gross Revenue
(S$’mil)
$121.1m$139.9m+15.5%
Property Operating
Expenses (S$’mil)
$12.6m$15.1m+20.3%
Net Property
Income (S$’mil)
$108.6m$124.7m+14.9%
Distributable
Income to Unitholders
(S$’mil)
$76.6m$84.4m+10.2%

At one glance, you can tell that the REIT’s latest set of results on a q-o-q basis was an improved one – the 15.5% q-o-q growth in its gross revenue was attributed from higher revenue contribution from its existing properties, acquisitions in Malaysia, Vietnam, South Korea, Japan, Australia, as well as in China, which were completed in FY2019/20 and in FY2020/21, along with contributions from the completed re-development of Mapletree Oulou Logistics Park Phase 2 in Q1 FY2020/21.

The 20.3% q-o-q rise in its property operating expenses can be attributed to property operating expenses from the new acquisitions in FY2019/20 and in FY2020/21 (which is as expected.)

9M FY2019/20 vs. 9M FY2020/21:

9M FY2019/209M FY2020/21% Variance
Gross Revenue
(S$’mil)
$362.7m$404.1m+11.4%
Property Operating
Expenses (S$’mil)
$38.9m$41.7m+7.1%
Net Property
Income (S$’mil)
$323.8m$362.4m+11.9%
Distributable
Income to Unitholders
(S$’mil)
$223.9m$240.5m+7.4%

Looking at the logistics REIT’s financial performance on a y-o-y basis, again, it is an improved one – similar to the reasons for the REIT’s q-o-q improvements, the 11.4% y-o-y gain in its gross revenue was due to the newly acquired properties in the various geographical locations completed in FY2019/20 as well as in FY2020/21, along with contributions from the re-developed Mapletree Oulou Logistics Park Phase 2.

Likewise, the 7.1% y-o-y increase in its property operating expenses was due to the property operating expenses incurred by the newly acquired properties in FY2019/20 and in FY2020/21.

My Thoughts: I like the REIT for its ability to continue to produce an improved set of results even in the midst of the ongoing Covid-19 pandemic. With e-commerce growing in popularity, I am of the opinion that the REIT’s financial results will continue to record improvements as demand for warehouse spaces is set to become higher and higher.

Portfolio Occupancy Profile (Q3 FY2019/20 vs. Q3 FY2020/21)

Moving on, let us now take a look at the logistics REIT’s portfolio occupancy profile recorded for the current quarter under review (i.e. Q3 FY2020/21 ended 31 December 2020), compared against the portfolio occupancy profile recorded in the same time period last year (i.e. Q3 FY2019/20 ended 31 December 2019) to find out whether it has improved or deteriorated:

Q3 FY2019/20Q3 FY2020/21
Portfolio Occupancy
(%)
97.7%97.1%
Rental Reversion
(%)
+1.2%+1.6%
Portfolio WALE
(by NLA – in Years)
4.4 years3.7 years

My Thoughts: Bearing in mind that Q3 FY2019/20 (period between 01 October and 31 December 2019) was before the Covid-19 pandemic, the logistics REIT’s latest set of portfolio occupancy profile in my opinion was a resilient one – especially given that the REIT was still able to achieve a positive rental reversion for renewed leases (mainly contributed by Hong Kong, China, Vietnam, and Malaysia.)

For its portfolio occupancy, if we were to exclude the newly acquired Higashi Hiroshima Centre in Japan (which is only 33% occupied), the REIT’s overall portfolio occupancy would be 97.4%, which is very comparable with the portfolio occupancy recorded in the same time period last financial year.

Finally, in case you’re wondering, for the final quarter of the financial year 2020/21, there remains 6.0% of leases due for renewal.

Debt Profile (Q3 FY2019/20 vs. Q3 FY2020/21)

Next, let us take a look at the REIT’s debt profile that was recorded for the current quarter under review (i.e. Q3 FY2020/21) compared against the same time period last year (i.e. Q3 FY2019/20):

Q3 FY2019/20Q3 FY2020/21
Aggregate Leverage
(%)
37.5%36.8%
Interest Coverage
Ratio (times)
5.2x5.0x
Average Term to
Debt Maturity (years)
3.9 years3.8 years
Average Cost of
Debt (%)
2.5%2.2%

My Thoughts: Again, do take note that in the same time period last year (i.e. Q3 FY2019/20), it was before the Covid-19 outbreak, and as such, if we were to compare the REIT’s latest set of debt profile against that recorded in the same time period last year, it’s a really strong set of statistics – especially given that its aggregate leverage, and its average cost of debt have recorded improvements. There are no more debt expiring in the remaining quarter of FY2020/21; for the next financial year (i.e. FY2021/22), there are only 4% of debts expiring, which is minimal in my opinion.

Distribution Per Unit (Q3 FY2019/20 vs. Q3 FY2020/21)

In the beginning of this post, I have mentioned that the REIT is one of the few that has continued to pay out a distribution to its unitholders on a quarterly basis.

With that, let us take a look at how much distribution the REIT have declared for the current quarter under review (i.e. Q3 FY2020/21), compared against the same time period last year (i.e. Q3 FY2019/20):

Q3 FY2019/20Q3 FY2020/21% Variance
Distribution Per
Unit (S$’cents)
2.044 cents2.065 cents*+1.0%
*take note that the 2.065 cents/unit declared for Q3 FY2020/21 consists of 0.623 cents/unit for the period between 01 October and 28 October 2020, which was paid out on 04 December 2020, and 1.442 cents/unit for the period between 29 October 2020 and 31 December 2020

If you are a unitholder of the logistics REIT, you may want to take note of the following dates (for the payout of 1.442 cents/unit):

Ex-Dividend: 01 February 2021
Record Date: 02 February 2021
Payout Date: 15 March 2021

In Conclusion

As a unitholder, I am satisfied with the blue-chip logistics REIT’s latest set of results – whether is it in terms of its q-o-q and y-o-y financial performance (both of them have improved), its portfolio occupancy profile (which continues to remain resilient), or its debt profile (which is a conservative one, with its aggregate leverage still a safe distance away from the regulatory limit of 50.0%.)

With that, I have come to the end of my review of Mapletree Logistics Trust’s latest set of results. Do take note that everything you have just read above is purely for educational purposes and they do not represent any buy or sell calls for the REIT’s units. Please do your own due diligence before you make any investment decisions.

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Disclaimer: At the time of writing, I am a unitholder of Mapletree Logistics Trust.