First time going to MBC town hall. Quite a nice place but very far for me. Driving with a relative smooth traffic also took me a good half an hour to reach.
It was nice that they reminded the shareholders that the responses to substantial questions can be found on their AGM website. You can also find the AGM presentation slides on the same site.
It’s business as usual with CEO sharing the highlights and outlook, and CFO providing a review of financial and capital management. After which it’s a question and answer session. As per usual, I will not be going into the specific but instead share what I took away from the AGM which are meshed with my own perception.
Resilient Performance
Amid the quick increase in interest rate over the past year, I think it is a credible performance by the REIT to just have its DPU dropped by 1.7% only. They have increased the occupancy and improve the retention rate. While this is partly achieved with a lower rental, it was a deliberate trade off which makes sense to me.
Challenging but Hopeful Outlook
While outlook remains challenging amid current uncertainties, it looks likely MIT can continue to grow in the coming year if the expected hike in interest rate is really coming to an end.
Competent Leaders
The good thing about attending AGM is that there will always be a few shareholders who scrutinised the annual report. I am definitely not one of them. I really love the questions raised by the lady on the drop in valuation and occupancy of a few properties listed in the AR. It is not only about the questions but also the way she asked the questions. With poise and clarity.
I am equally impressed that CEO was able to answer her queries with clarity. New thing I learnt is the valuation of US asset is dependent on the cash flow the properties is bringing in. Without going to the specific which I can’t remember anyway, my take is that the management is on top of things and they are managing the various known issues.
They were also very clear about the mandate of the trust which is that of industrial nature, including data center. So purely commercial is not something that they are contemplating at the moment even if there is a fire sale.
In answering a question on the percentage of data centre. He shared that in short term it is likely to go up and still fall within 50% to 67% range. The upper bound is 75% but longer term it likely to be more diversify.
I thought CFO answered the Fitch rating question very well too. New thing I learnt is rating was initially required by MAS, so that REIT can go above the 35% gearing limit. However, that requirement was dropped but MIT still find obtaining the rating to be useful as they can then tap on bond market.
I also have the same thought as her that it is not necessary for MIT to get an improvement of their BBB+ rating. It is probably good to have but not essential.
So hearing how the leaders answered the questions gave me confident that MIT should continue to do reasonably well going forward.
However, given that MIT is already my 4th largest holding in my portfolio, I am just going to hold on to my current stake.