SGX Market Updates

SGX Largest Industrial REITs' December19 Quarter Earnings


PUBLISHED ON |

10 February 2020

  • Among at least 10 industrial trusts listed on SGX, the 3 largest by market cap are: Ascendas REIT, Mapletree Logistics Trust and Mapletree Industrial Trust. Last month, the trio unveiled their earnings for the three months ended 31 Dec 2019.

  • For the Dec quarter, the 3 trusts averaged a DPU of 2.904 Singapore cents. Ascendas REIT reported the highest DPU of 3.507 cents, followed by Mapletree Industrial Trust with a DPU of 3.16 cents. The trio averaged an 8.8% y-o-y rise in net property income, while gross revenue gained an average 5.3% y-o-y.

  • The 3 REITs averaged an aggregate leverage ratio of 35.6% as of the Dec quarter, compared with an average 34.1% in the Sep quarter. Over the 2019 calendar year, the trio have averaged a total return of 38.1%, bringing their 1Y and 3Y total returns to 41.7% and 94.9% respectively.




As at end-2019, Singapore listed 35 REITs, 6 stapled trusts and 2 property trusts. These trusts contributed 24% to day-to-day turnover of Singapore’s stock market over the last calendar year. In contrast, the 43 trusts maintained a combined market value of more than S$111.9 billion, representing 12% of Singapore’s stock market capitalisation of S$937.8 billion at the end of last year.

Among the S-REITs, at least 10 are engaged in the acquisition, development, ownership, management and operation of industrial properties, data centres and logistics clusters, spanning Singapore, Malaysia, Vietnam, Japan, South Korea, China, Hong Kong, Australia, US, UK, Germany, and the Netherlands.

Among these 10 industrial trusts, the 3 largest by market cap are: Ascendas REIT, Mapletree Logistics Trust and Mapletree Industrial Trust. Last month, the trio unveiled their earnings for the three months ended 31 December 2019.



Earnings Highlights

For the quarter ended 31 December 2019, the 3 trusts averaged a distribution per unit (DPU) of 2.904 Singapore cents.

Ascendas REIT reported the highest DPU of 3.507 Singapore cents among the 3, down 12.3% y-o-y, followed by Mapletree Industrial Trust with a DPU of 3.16 Singapore cents, up 2.9% y-o-y. Ascendas REIT’s y-o-y decline in DPU was due to an enlarged number of applicable units (8.9% increase) following its December 2019 rights issue.

The trio averaged an 8.8% y-o-y rise in net property income to S$124.3 million, while gross revenue gained an average 5.3% y-o-y to S$154.5 million.

The 3 REITs averaged an aggregate leverage ratio of 35.6% as of the three months ended 31 December 2019, compared with an average 34.1% in the September 2019 quarter.

Mapletree Logistics Trust and Ascendas REIT had the highest aggregate leverage ratios of 37.5% and 35.1% respectively. Interest cover for the three trusts averaged 5.7 times in the December quarter, up marginally from 5.6 times in the previous quarter. Mapletree Industrial Trust had the highest interest coverage ratio of 6.8 times in the quarter.



Dec 2019 Quarter Financial Results

Name DPU
(SG cts)
YoY Chg
(%)
Net Property
Income
(S$M)
YoY Chg
(%)
Gross Revenue
(S$M)
YoY Chg
(%)
ASCENDAS REIT* 3.507# -12.3 182.3 8.5 239.7 5.9
MAPLETREE LOGISTICS TRUST 2.044 2.1 108.6 4.0 121.1 0.3
MAPLETREE INDUSTRIAL TRUST 3.160 2.9 81.9 14.0 102.6 9.7
Average 2.904 -2.4 124.3 8.8 154.5 5.3

* comparing 3Q FY2019 to 3Q FY18/19 as Ascendas REIT changed its FY end to 31 Dec from 31 March in July 2019.
# current quarter’s DPU incl. taxable, tax exempt and capital distributions of 2.956, 0.130 and 0.421cts respectively, with approx 3.6bln applicable units for DPU computation; year-ago quarter incl. taxable and capital distributions of 3.456 and 0.542cts respectively with approx 3.1bln applicable units for DPU computation.



Name Aggregate Leverage
Ratio (%)
as at
31 Dec 2019
Aggregate Leverage
Ratio (%)
as at
30 Sep 2019
Interest Coverage
Ratio (x)
as at
31 Dec 2019
Interest Coverage
Ratio (x)
as at
30 Sep 2019
ASCENDAS REIT 35.1 36.2 5.1 5.3
MAPLETREE LOGISTICS TRUST 37.5 37.0 5.2 5.0
MAPLETREE INDUSTRIAL TRUST 34.1 29.2 6.8 6.6
Average 35.6 34.1 5.7 5.6

Source: Company data



Outlook


Ascendas REIT
  • Although several economists expect global growth to recover modestly in 2020, downside risks from trade and economic policy uncertainties remain. The recent outbreak of the novel coronavirus has created a new element of uncertainty.
  • In 2020, we can look forward to a full year’s contribution from the new US and Singapore properties.
  • We will continue to invest in well-located properties that benefit from structural growth trends, such as technology and e-commerce, and strengthen Ascendas REIT’s presence across its four developed markets to optimise portfolio returns.

Click here for full results release.


Mapletree Logistics Trust 
  • Amidst continued geopolitical uncertainties and economic headwinds, Mapletree Logistics Trust’s customers remain cautious about renewals and expansion, with some looking to consolidate their operations to improve cost and operational efficiencies. This may have a negative impact on demand for warehouse space.
  • As a portfolio, overall occupancies for Mapletree Logistics Trust’s logistics facilities have stayed relatively resilient at 97.7%, while rental rates have been stable to-date. The Manager will continue to focus on tenant retention and actively managing leases due for expiry.
    During the quarter, the acquisition of seven logistics properties was completed. They will make their full contribution to Mapletree Logistics Trust’s distribution in the coming quarter.

Click here for full results release.


Mapletree Industrial Trust 
  • The completion of the acquisition of 13 data centres in North America will position Mapletree Industrial Trust to capture opportunities in the fast-growing data centre sector. We will continue to actively pursue investment opportunities to enhance the quality of the portfolio.
  • Based on Singapore Commercial Credit Bureau’s Business Optimism Index study, business confidence rose slightly for the first quarter of 2020, after reaching a near two-year low for the fourth quarter of 2019. A softer outlook is projected for the manufacturing and construction sectors in the coming months.

Click here for full results release.



YTD Performances

SGX’s 3 largest industrial trusts have a combined market cap of nearly S$25 billion. Over the 2019 calendar year, the trio averaged a total return of 38.1%, bringing their YTD, one-year and three year total returns to 10.5%, 41.7% and 94.9% respectively.

The table below details SGX’s 3 largest industrial REITs, sorted by market cap.

Name SGX
Code
Market
Cap
S$m
Total
Return
2019
%
Total
Return
YTD
%
Total
Return
1 Yr
%
Total
Return
3 Yr
%
ASCENDAS REIT A17U 11,470 24.3 10.1 29.7 60.1
MAPLETREE LOGISTICS TRUST M44U 7,025 46.2 9.4 42.9 115.0
MAPLETREE INDUSTRIAL TRUST ME8U 6,273 43.9 12.1 52.5 109.6
Average 38.1 10.5 41.7 94.9

Source: Bloomberg & StockFacts (data as of 5 Feb 20)







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