SGX Market Updates

2020 June Quarter Earnings of The 3 Largest Mapletree REITs


PUBLISHED ON |

30 July 2020

  • SGX’s three largest Mapletree REITs by market cap are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust. In the last two weeks of July, Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust reported earnings for the three months ended 30 June 2020.

  • For the quarter, Mapletree Logistics Trust and Mapletree Industrial Trust reported a DPU of 2.045 Singapore cents and 2.87 Singapore cents, up 1.0% and down 7.4% y-o-y respectively. Mapletree Commercial Trust, which provided a business update, did not report a DPU.

  • Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust averaged net property income of S$92.1 million for the June quarter, up 7.9% y-o-y. Gross revenue averaged S$110.6 million, up 6.8% y-o-y. Overall revenue growth was partly offset by rental rebates granted to eligible tenants impacted by COVID-19.




SGX lists more than 40 REITs and Property Trusts with a combined market capitalisation of just under S$100 billion. Of the REITs on SGX, three largest REITs belonging to the Mapletree family are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust.

Mapletree Logistics Trust and Mapletree Industrial Trust invest in logistics, industrial and data centre assets respectively, both in Singapore and beyond, while Mapletree Commercial Trust invests in office and/or retail real estate assets in Singapore. In the last two weeks of July, Mapletree Logistics Trust and Mapletree Industrial Trust reported earnings for the three months ended 30 June 2020, while Mapletree Commercial Trust provided a business update for the quarter.



Earnings Highlights 

For the 3 months ended 30 June 2020, Mapletree Logistics Trust and Mapletree Industrial Trust reported a distribution per unit (DPU) of 2.045 Singapore cents and 2.87 Singapore cents, up 1.0% and down 7.4% y-o-y respectively. Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust averaged net property income of S$92.1 million, up 7.9% y-o-y. Gross revenue averaged S$110.6 million, up 6.8% y-o-y. Overall revenue growth for the trio was partly offset by rental rebates granted to eligible tenants impacted by COVID-19. 



Quarter Ended 30 June 2020

Name DPU
(SG cts)
YoY Chg
(%)
Net Property
Income
(S$M)
YoY Chg
(%)
Gross Revenue
(S$M)
YoY Chg
(%)
MAPLETREE LOGISTICS TRUST 2.045 1.0 118.8 12.0 132.4 10.5
MAPLETREE INDUSTRIAL TRUST 2.870* -7.4 78.7 0.9 99.1 -0.5
MAPLETREE COMMERCIAL TRUST^ NA NA 78.9 10.7 100.3 10.5
Average 92.1 7.9 110.6 6.8

Source: Company data
* Cumulative Distribution of 2.90 cts comprising DPU of 2.87 cts for the period from 1 April 2020 to 30 June 2020 and the advanced DPU of 0.03 ct for 1 July 2020
^Quarterly business update.



Debt Profiles 

For the June quarter, the trio averaged an aggregate leverage ratio of 37.4%, compared with an average 36.7% in the March quarter. Mapletree Logistics Trust and Mapletree Industrial Trust had the highest aggregate leverage ratios of 39.6% and 38.8% respectively. Interest cover for the trio averaged 5.6 times in the June quarter, unchanged from the March quarter, with Mapletree Industrial Trust chalking up the highest interest coverage ratio of 7.9 times.

Name Aggregate Leverage Ratio
as at 30 June 2020
(%)
Aggregate Leverage Ratio
as at 31 Mar 2020
(%)
Interest Coverage Ratio
as at 30 June 2020
(%)
Interest Coverage Ratio
as at 31 Mar 2020
(%)
MAPLETREE LOGISTICS TRUST 39.6 39.3 4.8 4.7
MAPLETREE INDUSTRIAL TRUST 38.8 37.6 7.9 7.7
MAPLETREE COMMERCIAL TRUST 33.7 33.3 4.1 4.3
Average 37.4 36.7 5.6 5.6

Source: Company data 



Outlook 


Mapletree Logistics Trust
  • Mapletree Logistics Trust’s diversified geographic presence and tenant trade sector mix continues to provide resilience to the REIT’s pan-Asia portfolio.
  • Following the progressive easing of restrictions and as economies reopen, all of Mapletree Logistics Trust’s tenants have resumed operations except for a small number of tenants representing 1.3% of Mapletree Logistics Trust’s revenue base, which are mainly from Singapore.
  • Overall leasing demand for warehouse space has stayed relatively resilient.
  • COVID-19 has accelerated several pre-existing structural trends, such as e-commerce growth and supply chain diversification, benefitting the logistics market in Asia Pacific, and underpinned by these trends, the logistics sector has continued to demonstrate resilience.
  • The Manager remains watchful of the evolving environment, as a prolonged COVID-19 situation and economic downturn may adversely affect demand for warehouse space.
  • The Manager will continue to be vigilant on maintaining a strong balance sheet and prudent cash flow management.
  • Based on the available committed credit facilities on hand, Mapletree Logistics Trust has more than sufficient liquidity to meet its maturing debt obligations in the coming 12 months.

Click here for full results release. 



Mapletree Industrial Trust
  • Even though it is still early to ascertain the trajectory of economic recovery, the manufacturing sector has anticipated a slightly better outlook ahead, according to the Singapore Commercial Credit Bureau’s Business Optimism Index study.
  • The Manager estimates that the rental reliefs extended to tenants would amount to about S$20 million, which will affect Mapletree Industrial Trust’s distributable income for FY20/21.This includes the COVID-19 Assistance and Relief Programme of up to S$13.7 million as well as mandated rental reliefs under the COVID-19 (Temporary Measures) (Amendment) Act.
  • In view of uncertainty from the COVID-19 pandemic, the Manager has withheld tax-exempt income of S$7.1 million in 1QFY20/21 and S$6.6 million in 4QFY19/20 for greater flexibility in cash management. The Manager expects the income withheld will help to mitigate the impact of rental reliefs to FY20/21 distributions.
  • Mapletree Industrial Trust’s large and diversified tenant base with low dependence on any single tenant or trade sector, long leases of its  data centres in Singapore and North America, as well as its build-to-suit projects, will continue to underpin portfolio resilience.

Click here for full results release. 



Mapletree Commercial Trust
  • VivoCity retail tenants have seen an encouraging recovery in shopper traffic and tenant sales after the Phase Two lifting of the Circuit Breaker from 19 June 2020.
  • Although the majority of tenants have resumed operations, it will take some time to get back to pre-COVID-19 levels.
  • Until there is full clarity on the COVID-19 situation, it will continue to exercise extra prudence in managing the balance sheet.
  • With the additional facilities secured during the quarter, Mapletree Commercial Trust now has more than S$1 billion of cash and undrawn committed facilities on hand and are on track to refinance all borrowings due in FY20/21 and FY21/22.
  • Office sector:
    • As companies and businesses impacted by COVID-19 move to contain costs, more are downsizing through renewals or relocations, according to CBRE data.
    • In Q2 2020, office rents corrected for the second consecutive quarter, and vacancy levels are likely to rise as the volume of secondary space increases due to the relocations of major occupiers.
    • Coupled with subdued demand, CBRE expects further downward pressure on rents in the second half of 2020.
  • Business Parks sector:
    • The business park market displayed signs of resilience amid market uncertainties, largely due to their efficient floorplates and value proposition as a cost-competitive alternative to offices, CBRE data showed.
    • Rents for City Fringe and Rest of Island Business Parks were maintained at S$5.85 psf/month and S$3.75 psf/month respectively in 2Q 2020.
    • CBRE expects tight supply in the City Fringe submarket to continue to support rents.
    • Although tenants continue to exhibit stronger preferences for newer business parks in the City Fringe, tight vacancy in this submarket may prompt some of them to turn to the Rest of Island business parks, and more cost-conscious tenants may also consider moving to decentralised locations.
  • Mapletree Commercial Trust is cognisant of the challenges posed by COVID-19 on the overall sector and will continue to be proactive and nimble in implementing suitable measures to assist tenants, manage costs, and to mitigate potential impact from further disruptions.
  • Notwithstanding the headwinds, Mapletree Commercial Trust has a well-diversified portfolio with key best-in-class assets – in particular, Mapletree Business City’s stable cashflows from high-quality tenants is expected to underpin the Group’s performance.
  • The Group’s robust financial position will provide added strength to overcome challenges.

Click here for full results release.






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