Mapletree Logistics Trust (SGX:M44U) is the third and final Mapletree REIT in my long-term investment portfolio (you can check out a list of all the companies I’ve invested in here) to release its financial results for the third quarter, as well as for the first nine months of the current financial year 2021/22 ended 31 December 2021 shortly after market hours this evening (28 January 2022.)

While Singapore-listed companies are no longer mandated to release their financial results on a quarterly basis since last year, the logistics REIT have continued to do so, along with continuing to pay out a distribution to unitholders on a quarterly basis (in fact, the REIT is one of the few that has continued to pay out a distribution in this time frequency) – both attributes I find desirable as a unitholder.

For those of you who are new to the logistics REIT, a brief introduction: Listed on the Main Board of the Singapore Exchange since 28 July 2005, Mapletree Logistics Trust is the first Asia-focused logistics REIT in Singapore. At the time of writing, its portfolio comprises 167 properties in the various geographical locations: Singapore, Hong Kong, China, Japan, Australia, South Korea, Malaysia, Vietnam, and India (as at 31 December 2021.)

In the next few sections, you’ll read about a summary, along with my thoughts about the REIT’s latest financial performance, portfolio occupancy and debt profile, as well as its distribution payout to unitholders.

Let’s begin…

Financial Performance (Q3 FY2020/21 vs. Q3 FY2021/22, and 9M FY2020/21 vs. 9M FY2021/22)

In this section, you’ll find the logistics REIT’s financial performance on a quarter-to-quarter (q-o-q) basis, as well as on a year-on-year (y-o-y) basis:

Q3 FY2020/21 vs. Q3 FY2021/22:

Q3 FY2020/21Q3 FY2021/22% Variance
Gross Revenue
(S$’mil)		$139.9m$166.9m+19.3%
Property Operating
Expenses (S$’mil)		$15.1m$20.4m+34.9%
Net Property
Income (S$’mil)		$124.7m$146.4m+17.4%
Distributable
Income to
Unitholders (S$’mil)		$84.4m$96.7m+14.5%

At one glance, it’s clear that the latest q-o-q results reported by the blue-chip logistics REIT is another desirable one – with improvements mainly attributed to higher revenue from existing properties, contribution from the newly acquired properties in China, Vietnam, South Korea, Japan, Australia, and India, along with lower rental rebates granted to eligible tenants impacted by Covid-19.

The 34.9% q-o-q increase in its property operating expenses is mainly due to property expenses from the newly acquired properties, higher property and land tax, and higher allowance for doubtful receivables.

9M FY2020/21 vs. 9M FY2021/22:

9M FY2020/219M FY2021/22% Variance
Gross Revenue
(S$’mil)		$404.1m$495.7m+22.7%
Property Operating
Expenses (S$’mil)		$41.7m$60.6m+45.5%
Net Property
Income (S$’mil)		$362.4m$435.0m+20.0%
Distributable
Income to
Unitholders (S$’mil)		$240.5m$282.7m+17.5%

For the first 9 months of the current financial year 2021/22 so far, it is also a pretty impressive set of results when compared against the same time period last year, which can be attributed to higher revenue from existing properties, contribution from newly acquired properties in China, Vietnam, South Korea, Japan, Australia, and India, completed re-development of Mapletree Ouluo Logistics Park Phase 2 in Q1 FY2020/21, along with lower Covid-19 related rental rebates to tenants.

The REIT’s property operating expenses saw a 45.5% y-o-y jump to $60.6m due to property expenses from the newly acquired properties, higher property and land tax, along with higher allowances for doubtful receivables.

Portfolio Occupancy Profile (Q2 FY2021/22 vs. Q3 FY2021/22)

Moving on, let us take a look at the logistics REIT’s portfolio occupancy profile – where I will be taking the stats reported for the quarter under review (i.e. Q3 FY2021/22 ended 31 December 2021) and compare them against the stats reported in the previous quarter three months ago (i.e. Q2 FY2021/22 ended 30 September 2021) to find out whether or not it has continued to remain resilient or deteriorated:

Q2 FY2021/22Q3 FY2021/22
Portfolio Occupancy
(%)		97.8%97.8%
Rental Reversion
(%)		+2.4%+2.5%
Portfolio WALE
(by NLA – years)		3.7 years3.6 years

My Observations: Compared to the previous quarter, the logistics REIT’s portfolio occupancy continues to remain resilient. Not only that, the REIT has also managed to continue to record a positive rental reversion (and a slightly improved one) for new and/or renewed leases – which is something I find desirable.

In terms of the REIT’s portfolio occupancy breakdown by the different geographical locations, all of them saw their occupancy rates at above 95.0%, with improvements seen in Japan (where its occupancy rate went up from 96.2% in Q2 FY2021/22 to 96.7% in Q3 FY2021/22), South Korea (with its occupancy rate up from 98.4% in Q2 FY2021/22 to 98.8% in Q3 FY2021/22.) However, the REIT’s portfolio occupancy in Malaysia edged down slightly from 100.0% in Q2 FY2021/22 to 99.1% in Q3 FY2021/22.

Looking at the REIT’s lease expiry profile, in the final quarter of the current financial year 2021/22, 8.7% of the leases will be up for renewal, with another 29.5% of the leases up for renewal in the next financial year 2022/23, 18.6% in the financial year 2023/24, 14.3% in the financial year 2024/25, and the remaining 28.9% of the leases expiring in the financial year 2025/26 and beyond.

Debt Profile (Q2 FY2021/22 vs. Q3 FY2021/22)

Just like how I have reviewed the REIT’s portfolio occupancy profile in the previous section, I will also be looking at its debt profile by comparing the stats reported in the quarter under review against the previous quarter, as follows:

Q2 FY2021/22Q3 FY2021/22
Aggregate Leverage
(%)		38.2%34.7%
Interest Coverage
Ratio (times)		5.2x5.1x
Average Term to
Debt Maturity (years)		3.6 years3.5 years
Average Cost
of Debt (%)		2.2%2.2%

My Observations: Personally, I felt that the REIT’s debt profile continues to remain very healthy – its aggregate leverage, at 34.7%, provides plenty of debt headroom for it to embark on further yield-accretive acquisitions before the regulatory limit of 50.0% is reached (the regulatory limit is set at 50.0% as the REIT’s interest coverage ratio have been maintained at above 2.5x.)

In the final quarter of FY2021/22, 7% of the REIT’s borrowings will be maturing. Also, looking at its debt maturity over the next few financial years ahead, they are very well-staggered (in my opinion) – with 13% of its debt will be maturing in FY2022/23, 15% of its debt will be maturing in FY2023/24, 16% of its debt will be maturing in FY2024/25, and the remaining 49% of its debt only maturing in FY2025/26 and beyond.

Distribution Payout to Unitholders

For the current quarter under review (i.e. Q3 FY2021/22 between 01 October and 31 December 2021), an advanced distribution of 1.461 cents/unit for the period between 01 October and 01 December 2021 have already been paid out to unitholders on 12 January 2022, when new units were issued pursuant to the private placement launched on 23 November 2021.

For the period between 02 December and 31 December 2021, a distribution payout of 0.724 cents/unit was declared.

As such, the total distribution per unit to unitholders for Q3 FY2021/22 amounted to 2.185 cents/unit, a 5.8% improvement from 2.065 cents/unit declared in the same time period last year.

Also, for the current financial year so far (first 9 months of the financial year 2021/22), the REIT have declared a distribution payout of 6.519 cents/unit, a 5.7% increase from its payout of 6.165 cents/unit made in the first 9 months of the financial year 2021/22.

If you are a unitholder of the logistics REIT, here are some important dates regarding its distribution payout (of 0.724 cents/unit) you need to take note of:

Ex-Date: 08 February 2022
Record Date: 09 February 2022
Payout Date: 22 March 2022

Closing Thoughts

There’s nothing not to like about the REIT’s latest set of results – from an improved financial performance both on a q-o-q as well as on a y-o-y basis, resilient portfolio occupancy, healthy debt profile, and also an improved distribution payout (where its growth have been consistent over the quarters with its distribution also growing at 5.7% for the first and second quarter of the current financial year compared to the same time period last year) – it’s everything a unitholder could ask for (in my personal opinion.)

With that, I have come to the end of my review of Mapletree Logistics Trust’s latest third quarter, as well as 9-month results for the financial year 2021/22. Last but not least, do take note that everything you’ve read about above is purely for educational purposes only. They do not represent any buy or sell calls for the REIT’s units. You should always do your own due diligence before you make any investment decisions.

Finally, with the Lunar New Year holidays is just around the corner, I’d like to take this opportunity to wish all my Chinese readers a very Happy and Prosperous Lunar Year of the Tiger, and also a joyful celebration with your loved ones in advance! Also, to all my non-Chinese readers ahead, enjoy your holidays!

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

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