MAPLETREE INDUSTRIAL TRUST (SGX:ME8U)
Mapletree Industrial Trust 3QFY22 - Exploring Acquisitions & Development Projects Overseas
- Mapletree Industrial Trust (SGX:ME8U)'s 3QFY22 DPU grew 6.4% y-o-y due to the acquisition of 29 US data centres and 8011 Villa Park Drive in Richmond, Virginia. Mapletree Industrial Trust plans to diversify geographically to Europe and the Asia Pacific region. It will explore the acquisition and development of data centres, hi-tech buildings and R&D facilities in overseas markets. It has resumed the DRP for 3QFY22 distribution.
- Mapletree Industrial Trust provides FY22F attractive distribution yield of 5.2% (vs Keppel DC REIT (SGX:AJBU): 4.2%). Maintain BUY.
Mapletree Industrial Trust's 3QFY22 Results
- Mapletree Industrial Trust reported DPU of 3.49 cents (+6.4% y-o-y) for 3QFY22, which is in line with our expectations.
- Accelerated growth driven by acquisitions of data centres. Gross revenue and NPI grew 31.3% and 24.1% y-o-y respectively in 3QFY22 driven by:
- the acquisition of 29 US data centres completed on 22 Jul 21, and
- the acquisition of 8011 Villa Park Drive in Richmond, Virginia completed on 12 Mar 21.
- Stable occupancies. Mapletree Industrial Trust's portfolio occupancy was relatively unchanged at 93.6% in 3QFY22. Occupancy for its Singapore portfolio edged marginally higher by 0.1ppt q-o-q to 93.7%, driven by Business Park Buildings (+0.4ppt q-o-q to 83%) and Stack-up/Ramp-up Buildings (+1.2ppt q-o-q to 97.6%). Occupancy for data centres moderated 0.6ppt q-o-q as the 29 newly-acquired data centres in the US have lower average occupancy of 87.4%.
Benefitting from improvement in business sentiment.
- Management estimates positive debt has increased from 2.9 to 3.5 years after Mapletree Industrial Trust secured a new six-year term loan of S$491.4m.
MINTing growth from data centres.
- Management plans to strengthen the Nov 20, which will raise its plot ratio to 2.5x (previously: 1.5x) and increase its GFA to 865,600sf (+71%). It has secured pre-commitment from an anchor tenant (global medical device company headquartered in Germany) for the built-to-suit facility on a 15+5+5 year term, which accounts for 24.4% of the enlarged GFA.
- Completion of the redevelopment is expected in 2H22 (161 & 163 Kallang Way) and 1H23 (165 Kallang Way). Construction costs have increased 14% to S$300m due to the COVID-19 pandemic but management remains confident in achieving yield on costs of > 7%.
Earnings foreacst for Mapletree Industrial Trust
- We maintain our existing DPU on DDM (cost of equity: 5.75%, terminal growth: 2.0%).
- See
- Catalysts:
- Growth from data centres located in Singapore and North America.
- Acquisition of the remaining 50% stake in the portfolio of 13 data centres (second JV) from sponsor Mapletree Investments.
Jonathan KOH CFA
UOB Kay Hian Research
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https://research.uobkayhian.com/
2022-01-27
SGX Stock
Analyst Report
3.720
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3.720
