Mapletree Industrial Trust (SGX:ME8U) is the second of the trio of Mapletree REITs to release its results for the first quarter of the financial year 2023/24 ended 30 June after market hours yesterday (26 July) – the first was Mapletree Logistics Trust on Tuesday (you can read my review about it here). Mapletree Pan Asia Commercial Trust will be releasing its results for Q1 FY2023/24 after market hours next Monday (31 July).

The REIT have also held its annual general meeting (AGM) last Wednesday (19 July) which I have attended as a unitholder, and you can read my summary about it here.

For those who are not familiar with the REIT, here’s a quick introduction – Listed on the Singapore Exchange since October 2010, as the name implies, it invests in industrial properties (such as hi-tech buildings, business park buildings, flatted factories, stack-up/ramp-up buildings, and light industrial buildings). On top of that, the REIT also invests in data centre properties. At the time of writing, its portfolio comprises a total of 85 properties in Singapore and 56 properties in North America (including 13 data centres held through the joint venture with Mapletree Investments Pte Ltd) valued at S$8.8 billion.

In today’s post, you will read about my review of the REIT’s first quarter results in terms of its financial performance, portfolio occupancy and debt profile, and also its distribution payout to unitholders.

Let’s begin…

Financial Performance (Q1 FY2022/23 vs. Q1 FY2023/24)

Despite the REIT no longer mandated to provide full financial statements for the first and third quarter, but it has continued to do so – which is something I like, as I can get a better picture about the REIT’s performance (compared to just studying its portfolio occupancy and debt profile.)

The following table is a comparison of the REIT’s financial performance for Q1 FY2023/24 compared against that reported in the same time period last year (i.e., Q1 FY2022/23):

Q1 FY2022/23Q1 FY2023/24% Variance
Gross Revenue
Property Operating
Expenses (S$’mil)
Net Property
Income (S$’mil)
Distributable Income
to Unitholders

My Observations: It was a rather muted set of performance by the REIT for the 1st quarter of FY2023/24, compared against the figures reported in the same time period last year. However, that was within my expectations, considering the lack of acquisition activities due to the high interest rate environment, plus the fact that the newly completed Mapletree Hi-Tech Park @ Kallang Way have yet to achieve full occupancy during the period under review.

Gross revenue and net property income edged up by just 1.7% and 0.7%, largely due to contributions from new leases across various sectors.

As a result of higher property operating expenses, higher borrowing costs due to higher interest rates, along with a larger unit base (due to the REIT’s private placement in May 2023, and distribution reinvestment plan over 5 quarters – from Q3 FY2021/22 to Q3 FY2022/23), its distributable amount to unitholders fell by 2.5% to S$89.9m.

Portfolio Occupancy (Q4 FY2022/23 vs. Q1 FY2023/24)

Moving on, let us take a look at the REIT’s portfolio occupancy to find out whether or not it has continued to remain resilient.

In the table below, you will find a comparison of its portfolio occupancy reported for the current quarter under review (i.e., Q1 FY2023/24 ended 30 June 2023) against that reported in the previous quarter 3 months ago (i.e., Q4 FY2022/23 ended 31 March 2023):

Q4 FY2022/23Q1 FY2023/24
Portfolio Occupancy
Portfolio WALE
(by Gross Rental Income – years)
3.7 years3.90 years

My Observations: Portfolio occupancy fell slightly by 1.6 percentage points (pp) as a result of declines recorded in the following property types:

  • Data Centres: from 94.3% in Q4 FY2022/23 to 93.1% in Q1 FY2023/24
  • Hi-Tech Buildings: from 87.5% in Q4 FY2022/23 to 85.2% in Q1 FY2023/24
  • Business Park Buildings: from 87.25% in Q4 FY2022/23 to 83.5% in Q1 FY2023/24
  • Stack-up/Ramp-up Buildings: from 99.4% in Q4 FY2022/23 to 98.8% in Q1 FY2023/24
  • Light Industrial Buildings: from 97.1% in Q4 FY2022/23 to 58.7% in Q1 FY2023/24

The only property type which saw its occupancy rate recording an improvement was its flatted factories (from 98.4% in Q4 FY2022/23 to 98.7% in Q1 FY2023/24). Despite of that, I am not overly concerned as most of the property types have a good occupancy rate of above 80%.

Another thing to note is that, positive rental reversions for renewal leases were achieved for most property segments in Singapore, with a weighted average rental reversion rate of about +5.3%.

Finally, on lease expiries, they are well-spread out over the next few years, where an average of 10+% of the leases are due for renewal in any given financial year.

Debt Profile (Q4 FY2022/23 vs. Q1 FY2023/24)

Just like how I have reviewed the REIT’s portfolio occupancy in the previous section, I will also be reviewing its debt profile by comparing the statistics reported for the current quarter under review against that reported in the previous quarter 3 months ago (i.e., Q4 FY2022/23 vs. Q1 FY2023/24), as follows:

Q4 FY2022/23Q1 FY2023/24
Aggregate Leverage
Interest Coverage
Ratio (times)
Average Term to Debt
Maturity (years)
3.7 years3.7 years
Average Cost of
Debt (%)
% of Borrowings Hedged
to Fixed Rates (%)

My Observations: The REIT’s debt profile, apart from a 0.8pp increase in aggregate leverage, and a slight drop in interest coverage ratio (to 4.8x), have largely remained stable compared to the previous quarter – which is good to note, considering the high interest rate environment currently.

One thing to highlight here is that, the REIT have further improved its percentage of borrowings hedged to fixed rates in Q1 FY2023/24 to 78.0%. For the remaining 22.0% of unhedged borrowings, a 50 basis point increase in interest rates will impact its amount available for distribution per quarter by S$0.7m, and a distribution per unit impact of $0.02 cents.

For the REIT’s debt maturity profile, only 3.3% (or S$100.0m) of borrowings will be due for refinancing in the remaining 3 quarters of the current FY2023/24, 14.0% (or S$433.2m) of borrowings will be due for refinancing in FY2024/25, 23.5% (or S$725.5m) of borrowings will be due for refinancing in FY2025/26, and the remaining 59.2% (or S$1,831.5m) of borrowings will be due for refinancing only in FY2026/27 or later. With interest rates set to remain high over the next 1-2 years (my guesstimate is that it will be down to around 4.0% in end-2024, and then to around 3.0% in end-2025 and staying there), with the REIT having about 40.8% of borrowings due for refinancing from now till end FY2025/26 ending 31 March 2026, its borrowing cost is likely going to increase, and distribution payout to unitholders being affected to a certain extent.

Distribution Payout to Unitholders (Q1 FY2022/23 vs. Q1 FY2023/24)

The management of Mapletree Industrial Trust declares a distribution payout to its unitholders on a quarterly basis – which is something I desire, as it allow me to have a stable income stream regularly.

For Q1 FY2023/24, the management have declared a distribution per unit of 3.39 cents – a decline by 2.9% from its payout of 3.49 cents declared in Q1 FY2022/23. However, the REIT have already paid out 2.48 cents/unit for the period between 01 April and 05 June 2023 on 06 July 2023 ahead of a private placement. Hence, for the period between 06 June and 30 June 2023, the amount is 0.91 cents.

If you are a unitholder of the REIT, here are some important dates regarding its distribution payout to take note of:

Ex-Date: 02 August 2023
Record Date: 03 August 2023
Payout Date: 05 September 2023

CEO Tham Kuo Wei’s Comments & Outlook (from the REIT’s Press Release)

“The proposed acquisition of a data centre in Osaka, Japan underscores our strategic focus of strengthening the portfolio through accretive acquisitions and diversifying our portfolio geographically. The addition of a high-quality data centre with a long-term lease to an established data centre operator will improve the stability of MIT’s income stream. We will press ahead with our portfolio rebalancing efforts as we navigate the macroeconomic headwinds.”

Closing Thoughts

On the whole, the REIT’s results was well-within my expectations – from its financial results, to its portfolio occupancy and debt profile, and also its distribution payout to unitholders.

For its financial results, the lack of acquisitions (there is only one being announced back in May – in a data centre in Osaka, which is expected to be completed in the 3rd quarter of calendar year 2023) as a result of the current high interest rate environment is expected to slow down the growth of the financial figures. Coupled with higher borrowing costs, distribution payout to unitholders is also expected to be impacted – and in the coming quarters ahead, I expect distribution payout to be lower compared to the last financial year.

Looking at its portfolio occupancy, while it has dipped slightly, but in my opinion, it is still a strong one nevertheless – where the occupancy rates of its property types are above 80.0%. Also, the fact that the REIT have managed to renew leases for its Singapore properties at favourable rates will mean some income stability moving forward.

Finally, on its debt profile, no doubt its aggregate leverage have edged up further, but at under 40.0%, it is still a comfortable distance away from the regulatory level of 50.0%. Also, it is good to note that the REIT have managed to maintain its debt profile at more or less the same compared to the previous quarter.

With that, I have come to the end of my review of Mapletree Industrial Trust’s results for the 1st quarter of FY2023/24. As always, I do hope you have found the contents presented in this post useful. At the same time, please take note that all the opinions within are purely mine which I’m sharing for educational purposes only. They do not imply and buy or sell call for the REIT’s units. Please do your own due diligence before you make any investment decisions.

Related Documents

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

Launch Event for My First Book: building your REIT-irement portfolio

building your REIT-irement portfolio by Lim Jun Yuan - Official Book Launch on 26 September 2023

After months of hard work, my first book, 'Building Your REIT-irement portfolio' is finally ready! In this easy-to-follow 178-page guide, you'll learn everything you need to know about building a REIT portfolio that can provide for you in your retirement years. You can check out a preview of the book here.

I'm extremely thankful to the team at InvestingNote and ShareInvestor for their help to organise a book launch event for me on Tuesday, 26th September 2023, from 6:00pm to 8:00pm at their office in New Tech Park.

For more details and to RSVP (seats are extremely limited), click on the link below:

Click here for more details on the book launch event and RSVP here...