Wednesday, January 26, 2011

Mapletree Industrial Trust's DPU beats forecast

MAPLETREE Industrial Trust's first set of financial results since its listing on the Singapore Exchange have surpassed forecasts, its manager said yesterday.

The Singapore real estate investment trust (Reit) achieved a distribution per unit (DPU) of 1.52 cents for the period from Oct 21 (listing date) to Dec 31 last year, 13.4 per cent above the forecast of 1.34 cents disclosed in its initial public offering prospectus.

Distributable income for the period came in at $22.3 million, 13.6 per cent above its forecast, thanks to higher gross revenue and lower property expenses.

After its widely anticipated IPO was 38 times subscribed last year, MIT surged on its first day of trading to close at $1.16, up from its offer price of $0.93. Yesterday, MIT slipped one cent to close at $1.09, before its results were announced.

Higher rentals and a one-off rent collection back-dated to the start of a tenant's lease lifted gross revenue to $41.5 million, 4.8 per cent above the forecast.

Lower utility costs thanks to energy saving initiatives, lower maintenance expenses and a one-off recovery of bad debts previously written-off, all lowered MIT's property expenses to $11.9 million, 3.8 per cent below what was initially forecast.

Excluding the one-off effects on revenue and property expenses though, Mapletree Industrial Trust Management (MITM) said yesterday that the DPU would have been 1.46 cents, still 9 per cent above the forecast.

With the manufacturing sector expected to grow in tandem with Singapore's economy, the manager expects demand for industrial properties to remain stable this year and sustain MIT's performance.

'Improving demand for industrial space is reflected in the healthy occupancy rate of 92.3 per cent and average monthly rental rate of $1.45 per square foot per month, for the third quarter,' said Tham Kuo Wei, CEO of MITM.

MIT retained 81 per cent of leases due for renewal in Q3, (the three months ended Dec 31, 2010), and the rentals were renewed at an average of 21.9 per cent above previous rates. For the rest of its financial year which ends on March 31, only 2.6 per cent of MIT's portfolio is still due for renewal.

Meanwhile, renovation has begun at its Redhill 2 cluster to convert the 7th floor of a flatted factory into e-business space, which commands higher rentals than conventional flatted factory space. It is expected to meet strong demand from enterprises and start-ups in e-business, and is slated for completion by the end of March.

MIT has committed to distributing 100 per cent of its adjusted taxable income from the listing date till March 31, 2012. Unitholders can expect to receive their first distribution on Feb 28.

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