Mapletree Ind Tr Financial Results Ending 31 Mar 2017

“MIT delivered higher DPU in FY16/17 amid the uncertain business environment as all property segments registered higher rental rates coupled with initial contribution from Phase One of the BTS development for Hewlett-Packard and lower property expenses. We expect the Hi-Tech Buildings segment to be a significant growth driver as we progressively complete development projects including the recently announced BTS data centre which has commenced construction.”

Mr Tham Kuo Wei, Chief Executive Officer

  • 2.88 cents (4Q ending 31 Mar 2017)

Mapletree Industrial Trust Delivers Higher Distribution per Unit in FY16/17

  • Year-on-year distributable income and distribution per unit (“DPU”) grew 3.6% and 2.2% respectively in FY16/17
  • Driven by higher rental rates achieved across all property segments with initial contribution from Phase One of the build-to-suit (“BTS”) development for Hewlett-Packard Singapore (“Hewlett-Packard”) and lower property expenses
  • Progressive completion of development projects increases the value of Hi-Tech Buildings segment by 21.6%

Mapletree Industrial Trust Management Ltd., as manager (the “Manager”) of Mapletree Industrial Trust (“MIT”), is pleased to announce that MIT’s distributable income for the Financial Year 2016/2017 from 1 April 2016 to 31 March 2017 (“FY16/17”) was S$205.0 million, up 3.6% from S$197.8 million achieved in FY15/16. DPU for FY16/17 increased to 11.39 cents, 2.2% higher than the DPU of 11.15 cents for FY15/16. Distributable income and DPU for the period from 1 January 2017 to 31 March 2017 (“4QFY16/17”) were S$51.8 million and 2.88 cents respectively.

Mr Tham Kuo Wei, Chief Executive Officer of the Manager, said, “MIT delivered higher DPU in FY16/17 amid the uncertain business environment as all property segments registered higher rental rates coupled with initial contribution from Phase One of the BTS development for Hewlett-Packard and lower property expenses. We expect the Hi-Tech Buildings segment to be a significant growth driver as we progressively complete development projects including the recently announced BTS data centre which has commenced construction.”

 

Portfolio Performance and Update

Average portfolio occupancy for 4QFY16/17 increased marginally to 93.1% from 92.1% in the preceding quarter. This was attributed to the full-quarter effect of the lease commencement of Phase One of the BTS development for Hewlett-Packard. Average portfolio passing rent increased marginally to S$1.94 per square foot per month (“psf/mth”) from S$1.93 psf/mth in the preceding quarter.

During the quarter, the Manager announced that it will be developing a BTS data centre for an established data centre operator at an estimated cost of S$60 million. The six-storey purpose-built data centre located in the West Region of Singapore will be fully leased for an initial term of more than 10 years. This BTS data centre marks MIT’s third data centre development after successful completions of data centres for Tata Communications International and Equinix Singapore

Phase Two of the BTS development for Hewlett-Packard is on track for completion by 30 June 2017. The Manager is currently finalising the lease commencement details for Phase Two with Hewlett-Packard.

 

Value of Hi-Tech Buildings Segment Increases by 21.6%

MIT’s 86 investment properties were valued at S$3,748.7 million as at 31 March 2017, which represented an increase of S$190.8 million over the previous valuation as at 31 March 2016. The increase was due to a portfolio revaluation gain of S$70.2 million and capitalised cost of S$120.6 million from development and improvement works. The Hi-Tech Buildings segment increased by 21.6% to S$1,077.3 million from S$886.0 million a year ago, contributed by the progressive completion of development projects. Correspondingly, the net asset value per unit increased from S$1.37 as at 31 March 2016 to S$1.41 as at 31 March 2017.

 

Proactive Capital Management

In March 2017, MIT successfully issued S$100 million 3.16% 7-year medium term notes, which increased the weighted average tenor of debt from 3.2 years as at 31 December 2016 to 3.5 years as at 31 March 2017. Consequent to the issuance, the weighted average hedge tenor increased from 3.4 years as at 31 December 2016 to 4.0 years as at 31 March 2017.

 

Outlook

Despite positive data about the manufacturing sector in Singapore, the business environment remains uncertain amid global trade uncertainties and rising interest rates. The continued supply of competing industrial space and movement of tenants are expected to exert pressure on rental and occupancy rates. The Manager continues to focus on tenant retention to maintain a stable portfolio occupancy.

 

Distribution to Unitholders

Unitholders can expect to receive their quarterly DPU for the period 1 January to 31 March 2017 on 30 May 2017. The closure of MIT’s transfer books and register of Unitholders will be at 5.00pm on 3 May 2017.

 

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