Following the conclusion of its financial year 2020/21 on 31 March 2021, blue-chip logistics REIT Mapletree Logistics Trust (SGX:M44U) held its 12th annual general meeting (AGM) this afternoon, which I have attended as a unitholder to receive the latest updates from the management.
Due to the current safe distancing measures in place, the meeting was conducted virtually. Despite of that, during the meeting, there was an option for attendees to submit their questions to be addressed by the management – however, there were none submitted (and I was kind of surprised to be honest.)
For the benefit of those who did not manage to attend the meeting, you can read a quick summary of the presentation by the Chief Financial Officer (CFO) of the REIT, Ms Charmaine Lum, outlook for the REIT ahead by the Chief Executive Officer (CEO) of the REIT, Ms Ng Kiat, along with results of the 3 resolutions put to vote during the meeting:
Resilient Portfolio:
- Ms Lum shared that despite the financial year being a difficult one due to the ongoing Covid-19 pandemic, the logistics sector remained resilient.
- More importantly, the REIT still managed to rejuvenate its portfolio in that they have acquired 18 modern specifications logistics facilities in Australia, China, Vietnam, Japan, and South Korea (all of them are existing markets), as well as entering a new market in India. On top of that, the REIT also acquired the remaining 50% interest in 15 properties in China.
- Ms Seah explained that the acquisitions helped to enhance the REIT’s competitive positioning and network connectivity to better support customers in their regional expansion plans, as well as add diversity to its tenant income (which currently comprised of 748 local and international companies, with the top 10 tenants accounting for approximately 25.7% of the REIT’s total gross revenue.)
- Assets under management grew by 20.9% compared to last year to S$10.8b (FY2019/20: S$8.9b.) Correspondingly, its gross floor area also increased by 28.5% in the same time period to 6.5 million sqm.
- The REIT’s portfolio occupancy rate held steady at 97.5% (vs. 98.0% as at 31 March 2020), with its portfolio WALE by net lettable area was at 3.6 years (compared to 4.3 years as at 31 March 2020.) – this was due to shorter leases in China as well as in Vietnam, which Ms Lum added that it is characteristic of the lease structures in the two countries.
Delivering Returns:
- In FY2020/21, the amount distributable to unitholders increased by 10.4% on a year-on-year (y-o-y) basis to S$333.1m (FY2019/20: S$301.7m), and this translates to a distribution per unit of 8.326 Singapore cents/unit, up by 2.3% compared to the previous year (where its distribution per unit was 8.142 Singapore cents/unit.)
- The REIT’s total return to unitholders was up from 13.8% in FY2019/20 to 27.4% in FY2020/21, which Ms Lum attributed the improvement to organic growth, along with contributions by the REIT’s accretive acquisitions.
Prudent Capital Management:
- Aggregate leverage as at 31 March 2021 was at 38.4%, and Ms Lum added that there remains ample debt headroom for further acquisitions.
- Interest coverage ratio, at 5.1x, was also well above debt covenants, explained Ms Lum.
- Only S$161m (or just 4%) of debt will be due in FY2021/22 ahead, which Ms Lum shared that there are more than sufficient liquidity available to meet the REIT’s financing needs.
- 75% of the REIT’s total debt is hedged or drawn in fixed rates, and about 79% of the amount distributable in the next 12 months is hedged into/derived in Singapore dollars.
Environmental, Social, and Corporate Governance (ESG) Targets:
- Ms Lum shared that all of the REIT’s ESG targets for FY2020/21 has been achieved, and some of the highlights include:
- The installation of LED lights, as well as the replacement of air-conditioning units, which contributed to a 2% y-o-y reduction in energy intensity in Singapore, Hong Kong, China, Malaysia, and Vietnam.
- The installation of solar panels in the REIT’s logistics properties in Singapore and Australia, which led to a 22.9% y-o-y increase in the REIT’s solar generating capacity to 10.5MWp.
- A S$350m in green loan facilities was secured to finance and/or refinance green projects
Looking Ahead:
- CEO of Mapletree Logistics Trust, Ms Ng Kiat, shared that the ongoing Covid-19 pandemic has accelerated several structural trends which benefitted the logistics market; and Mapletree Logistics Trust is well-positioned to capture the growth opportunities, particularly:
- An acceleration in e-commerce growth by companies (Ms Ng added that many traditional MNcs have in fact gone aggressively into e-commerce to drive sales) have led to a higher demand for modern logistics space, particularly for facilities in close proximity to consumers.
- Firms are on a lookout for multiple small logistics hubs that are fast to lease, as well as fast to expand – to allow them to more effectively fulfil consumer demands.
- The ongoing trade war between the United States and China have led to American and Chinese companies re-locating to countries such as Vietnam and Malaysia, which the REIT has logistics properties in, and will benefit from the companies’ move.
- An increase in demand for modern warehouses featuring high specifications, which the REIT has such properties that can benefit from this as well.
- To conclude, Ms Ng said that the REIT will continue to execute their tried and proven “Yield + Growth” strategy, underpin by a prudent capital management.
Results of Resolutions Put to Vote during the AGM
- Resolution #1, which is to receive and adopt the Trustee’s Report, the Manager’s Statement, the Audited Financial Statements of Mapletree Logistics Trust for the financial year ended 31 March 2021 and the Auditor’s Report thereon, was passed with 98.35% (or 2,776,849,569) of the votes for, and 1.65% (or 46,611,380) of the votes against.
- Resolution #2, which is to re-appoint PricewaterhouseCoopers LLP as the Auditor of Mapletree Logistics Trust and to authorise the Manager to fix the Auditor’s renumeration, was passed with 97.81% (or 2,762,526.871) of the votes for, and 2.19% (or 61,715.951) of the votes against.
- Resolution #3, which is to authorise the Manager to issue units and to make or grant instruments convertible into units, was passed with 93.96% (or 2,653,760,004) of the votes for, and 6.04% (or 170.484,318) of the votes against.
Closing Thoughts
I thought the entire meeting, though just a short one (lasting only 30 minutes), but everything was explained in a straight-forward, concise manner. Another thing to note is that, all the questions raised by unitholders were very comprehensively responded to by the management (you can read the PDF in full here.)
Personally, I am optimistic of the prospects of this blue-chip REIT moving forward, as demand for these logistical properties will continue to go up with the proliferation of e-commerce.
With that, I have come to the end of my quick summary of Mapletree Logistics Trust’s AGM. As always, I do hope you’ve found the above contents useful.
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Disclaimer: At the time of writing, I am a unitholder of Mapletree Logistics Trust.
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