SGX Market Updates

The 3 Largest Mapletree REITs' 1H2020 Earnings


04 November 2020

  • Of the REITs on SGX, 3 largest REITs belonging to the Mapletree family are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust. Over the last 2 weeks of October, the 3 Mapletree trusts reported earnings for the 6 months ended 30 Sept 2020.

  • For 1H ended 30 Sept 2020, Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust averaged a DPU of 4.75 Singapore cents, down an average of 4.3% y-o-y. Mapletree Logistics Trust was the only trust that registered a y-o-y percentage increase in DPU – up 1.2% – for the period under review.

  • While the outlook for industrial and commercial property segments remains challenging given uncertainty over the trajectory of economic recovery – both globally and domestically – the three Mapletree trusts remain resilient, underpinned by prudent management strategies and strong portfolio fundamentals.

Of the REITs on SGX, three largest REITs belonging to the Mapletree family are Mapletree Logistics Trust (SGX:M44U), Mapletree Industrial Trust (SGX:ME8U) and Mapletree Commercial Trust (SGX:N2IU).

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.

Over the last two weeks of October, the three Mapletree trusts reported earnings for the 6 months ended 30 September 2020. 

Mapletree Trusts' Earnings Highlights  

For the 6 months ended 30 Sept 2020, Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust averaged a distribution per unit (DPU) of 4.75 Singapore cents, down an average of 4.3% y-o-y. Mapletree Logistics Trust was the only trust that registered a y-o-y percentage increase in DPU – up 1.2% – for the period under review.

For 1H FY20/21, Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust averaged net property income of S$189.8 million, up 3.1% y-o-y, while gross revenue averaged S$228.5 million, up 2.5% y-o-y.

  • Mapletree Logistics Trust reported revenue growth mainly due to higher contributions from existing properties, accretive acquisitions in FY19/20, and contributions from completed redevelopment of Mapletree Ouluo Logistics Park Phase 2 in Shanghai. This was partly offset by rental rebates granted to eligible tenants impacted by COVID-19 and divestment of one property in China in FY19/20.
  • Mapletree Industrial Trust’s growth was driven by new revenue contribution from 14 data centres in the US, but offset by rental reliefs extended to tenants and loss of revenue due to redevelopment of Kolam Ayer 2 Cluster.
  • Mapletree Commercial Trust’s 1H FY20/21 gross revenue and net property income fell 2.5% and 2.6% y-o-y respectively mainly due to COVID-19 rental rebates, but the impact was offset by contributions from Mapletree Business City II.

Mapletree Trusts' 1H FY20/21 Earnings

Name DPU
(SG cents)
YoY Chg
YoY Chg
YoY Chg
MAPLETREE LOGISTICS TRUST 4.10 1.2 237.7 10.4 264.2 9.4
MAPLETREE INDUSTRIAL TRUST 5.97 # -4.2 160.3 1.5 202.5 0.5
MAPLETREE COMMERCIAL TRUST 4.17 ^ -9.9 171.5 -2.6 218.7 -2.5
Average 4.75 -4.3 189.8 3.1 228.5 2.5

Source: Company data.
# Amount available for distribution includes tax-exempt income amounting to S$7.1 million withheld and not included in the 39th distribution (equivalent to distribution per unit of 0.32 cent). Had the tax-exempt income distribution been included, DPU for 1HFY20/21 would be 6.29 cents.
# As announced on 2 Jul 2020, Mapletree Industrial Trust declared an advanced distribution of 0.03 cent per unit for 1 Jul 2020. The advanced distribution was paid on 28 Jul 2020.
^ In 4Q FY19/20, Mapletree Commercial Trust made capital allowance claims and retained capital distribution totalling S$43.7 million to conserve liquidity in view of the uncertainty due to the COVID-19 pandemic. Of this, S$15.0 million was released to unitholders and included in the distribution for 1H FY20/21. 

Mapletree Trusts' Debt Profiles

As at 30 Sept 2020, the trio averaged an aggregate leverage ratio of 37.1%, compared with an average 37.4% as at 30 June 2020. Mapletree Logistics Trust and Mapletree Industrial Trust had the highest aggregate leverage ratios of 39.5% and 38.1% respectively.

Interest cover for the trio averaged 5.3 times as at 30 Sept 2020, versus 5.6 times as at 30 June 2020, with Mapletree Industrial Trust chalking up the highest interest coverage ratio of 7.0 times.

Name Aggregate
Leverage Ratio
as at
30 Sept 2020
Leverage Ratio
as at
30 June 2020
Coverage Ratio
as at
30 Sept 2020
Coverage Ratio
as at
30 June 2020
Average 37.1 37.4 5.3 5.6

Source: Company data

Mapletree Trusts' Outlook

Mapletree Logistics Trust (SGX:M44U)
  • With the ongoing pandemic, tenants remain cautious on expansion and are slower to commit in view of the economic uncertainties.
  • All tenants have resumed operations except for a few in Singapore, representing 0.3% of Mapletree Logistics Trust’s revenue base.
  • As a portfolio, overall occupancies for Mapletree Logistics Trust’s logistics facilities have stayed resilient at 97.5% while rental rates have been stable.
  • A prolonged COVID-19 situation and economic downturn may adversely affect demand for warehouse space. The Manager continues to be vigilant and remain focused on proactive asset management and strategic acquisition opportunities with a view to provide stable long-term returns for unitholders.
  • The Manager will remain prudent on cash flow management while maintaining a strong balance sheet. As at 30 September 2020, Mapletree Logistics Trust has a gearing ratio of 39.5% and a well-staggered debt maturity profile with an average debt duration of 3.8 years.
  • 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.
  • On the capital management front, 80% of Mapletree Logistics Trust total debt has been hedged into fixed rates while 75% of income stream for the next 12 months has been hedged into SGD.

Click here for full results release. 

Mapletree Industrial Trust (SGX:ME8U)
  • The Manager will continue to support its tenants, especially small and medium-sized enterprises tenants who have been affected by supply chain disruptions and fall in business volume as a result of the pandemic.
    • About 54% of the Singapore Portfolio (or 40% of the Overall Portfolio) (by gross rental income) as at 30 September 2020 comprises SME tenants.
  • 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 and mandated rental reliefs under the COVID-19 (Temporary Measures) (Amendment) Act.
    • Rental reliefs of approximately S$7.1 million had been extended to tenants in 1QFY20/21 and 2QFY20/21 with additional rental reliefs expected to be given in FY20/21.
  • The Manager will not be withholding any income in 2QFY20/21 in view of the gradual stabilisation of the COVID-19 situation in Singapore.
  • Mapletree Industrial Trust’s large and diversified tenant base with low dependence on any single tenant or trade sector will continue to underpin its portfolio resilience.
  • The long leases in Data Centres in Singapore and North America as well as build-to-suit projects will further strengthen the portfolio’s resilience.

Click here for full results release. 

Mapletree Commercial Trust (SGX:N2IU)
  • Retail
    • According to CBRE, with the further easing of “circuit breaker” measures, the majority of retail tenants have resumed operations, resulting in a gradual recovery in retail sales and shopper traffic.
    • While sentiments have improved, the retail market continued to be affected by the absence of international tourists and work-from-home measures.
    • Occupancies and rents are expected to remain under pressure, although the extent will be mitigated by limited new retail supply.
  • Office
    • Coupled with a bleak employment outlook, office demand continued to dampen. As vacancies are expected to rise, landlords are realigning their rental expectations, thus narrowing the rental .expectation gap between tenants and landlords; rate of rental decline has been cushioned by various government stimulus packages and rental relief schemes.
    • Concerns on the possible over-supply in 2022 have dissipated as developments have been delayed by at least three months, allowing supply and demand to recalibrate.
  • Business Park
    • Occupier activity was relatively muted with some demand arising from the technology sector.
    • Renewals were a prominent feature although some large occupiers were seen to have cut back on space requirements; more downsizing could be on the horizon as tenants recalibrate their footprint.
    • Nonetheless, firms still consider business parks favourably in their long-term plans; City Fringe business parks will continue to garner interest despite their tight supply and rental premium over the Rest of Island business parks.
  • Overall
    • Mapletree Commercial Trust is cognisant of the uncertainties posed by COVID-19 on the overall sector, including weaker consumer sentiments, continued border closures, work-from-home directives and social distancing measures, as well as lower prospective demand for commercial space.
    • Potential challenges could also arise when the COVID-19 impact hits in full force after the end of government support measures as well as a prolonged pandemic.
    • Mapletree Commercial Trust’s focus remains to maintain a healthy portfolio occupancy and sustainable rental income by working closely with our tenants.
    • Anchored by a well-diversified portfolio with key best-in-class assets, Mapletree Commercial Trust is expected to derive stable cashflows from high quality tenants; its resilience will keep the vehicle well-placed to ride through the crisis.

Click here for full results release.

This article is provided by SGX My Gateway.

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