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Mapletree Industrial Trust - Maybank Kim Eng 2022-01-26: Data-Driven Growth

MAPLETREE INDUSTRIAL TRUST (SGX:ME8U) | SGinvestors.io MAPLETREE INDUSTRIAL TRUST (SGX:ME8U)

Mapletree Industrial Trust - Data-Driven Growth


Another strong quarter, BUY

  • Mapletree Industrial Trust (SGX:ME8U) delivered a strong 3Q22, as DPU rose 6.6% y-o-y/0.8% q-o-q, driven by contributions from the recent US portfolio acquisition and 8011 Villa Park Drive (in Virginia, US). The results were in line with our estimates and the street, and our forecasts remain unchanged.
  • We see a near-term catalyst as industrial sector rents look set to bottom-out. Mapletree Industrial Trust boasts stronger fundamentals with improved DPU visibility from its rising data centre tenancies.
  • Mapletree Industrial Trust's balance sheet is strong and we see further DPU-accretive deals, as management advances diversification efforts to deepen data centre concentration to 50-67% of AUM.



Lower occupancy, larger US AUM

  • Mapletree Industrial Trust's portfolio occupancy dipped slightly to 93.6% (from 93.7% in 2Q22), with a full quarter contribution from the 29 data centre portfolio (from Jul 2021), that was 87.4% occupied (versus 87.8% in 2Q22). While US occupancy was lower at 93.9% (from 93.9%), this increased slightly in Singapore to 93.7% (from 93.6%), with improvements for its business parks (from 82.6% to 83.0%) and stack-up/ramp-up buildings (96.4% to 97.6%).
  • Demand growth remains uneven, and management has stayed focused on tenant retention.


Stable rents, recovery in sight

  • Gross rents in Singapore increased at 0.9% y-o-y and were flat q-o-q at S$2.13 psfpm (versus +4.9% y-o-y/flat q-o-q in 2Q22).
  • We note that rental reversions turned positive on an aggregate basis, for the first time since 3Q17, at between 0% to +1.8% (versus +0.5-3.5% in 3Q17). The outlook for Mapletree Industrial Trust’s business parks and light industrial buildings remain challenging with weaker demand fundamentals, and management expects rents to bottom out in 2H22.


Data centre AUM on the rise






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2022-01-26
SGX Stock Analyst Report BUY MAINTAIN BUY 3.350 SAME 3.350



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