In my previous post, I took a look at the trend data over the past seven quarters for Mapletree Logistics Trust (SGX: M44U). I found the exercise useful as the data provided me a glimpse on the strengths and challenges faced by the REIT.
Hence, I decided to compile a similar set of information for Mapletree Industrial Trust (SGX: ME8U), or MIT, hoping to catch some insights from the numbers.
As the data illustrates, MIT has modestly increased revenue over the past three years. However, Distribution Per Unit (DPU) dipped in the preceding two fiscal years before rebounding in 4Q FY23/24.
This decline primarily stemmed from a surge in its cost of debt during the same period. The recovery can likely be attributed to the recent swap of a higher-interest loan with a lower-interest Japanese Yen loan.
Interestingly, MLT’s current situation appears to mirror that of MIT, albeit exacerbated by the weaker regional currency.
MIT faces another challenge: rising vacancy rates over the past two years. While robust rental reversions and contributions from recently acquired Japanese properties have mitigated this impact, it remains a persistent concern.
Although MIT is likely to maintain its current DPU in the next quarter, it’s premature to declare it out of the woods.
As the manager pointed out, headwinds persist. These include policy uncertainty, persistent inflation, escalating geopolitical tensions, increasing property operating expenses, and elevated borrowing costs, all of which could continue to pressure distributions.
For now, I intend to maintain my current stake. However, I may consider a partial divestment should more attractive investment opportunities arise.
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