- Mapletree Industrial Trust reported its 1QFY26 results which came in within our expectations.
- Gross revenue and net property income (NPI) increased slightly by 0.3% and 0.8% y-o-y to S$175.9m and S$133.6m, respectively. This was driven by higher contribution from the completion of Phase 3 and final phase of fitting-out works at its Osaka Data Centre, coupled with a recent acquisition in Tokyo, but partially offset by the weaker US$ relative to S$.
1QFY26 DPU fell 4.7% y-o-y and met our expectations.
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- Excluding the divestment gains and one-off compensation, Mapletree Industrial Trust’s core DPU would instead have declined by a smaller magnitude of 1.5% y-o-y. This accounted for 24.9% of our initial FY26 forecast.
Continued positive rental reversions in Singapore (+8.2%) but occupancy declined marginally by 0.2 ppt q-o-q to 91.4%.
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- For its Singapore operations, Mapletree Industrial Trust achieved another quarter of steadfast rental reversions for its renewal leases. This came in at +5.0% for its Hi-Tech Buildings and Business Space segment and +9.5% for its General Industrial Buildings segment, thus culminating in an overall portfolio weighted average rental reversion rate of +8.2%. This is tracking above management’s earlier guidance for a mid-single digit rental reversion rate in FY26, but we expect the figure to moderate ahead.
- Despite our concerns over Mapletree Industrial Trust’s portfolio occupancy risks, this held up relatively well during the quarter (-0.2 ppt q-o-q to 91.4%). Occupancy declined slightly by 0.3 ppt and 0.2 ppt q-o-q to 92.6% and 88.0% in Singapore and the US, respectively, and was 100% in Japan.
Aggregate leverage ratio unchanged q-o-q at 40.1% but set to decline to ~37% upon completion of proposed divestments.
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