Mapletree Industrial Trust occupancy surged 93.2% in 4Q 2011

This is on the back of high retention rate of 86%, indicating a strong underlying demand for industrial space.

According to DBS Vickers, MINT continues to renew c99.1% of leases at the maximum cap while new leases secured at market rates are in excess of 20% above expiring rents.

These highlight that the average portfolio rental rate of S$1.49 psf/pm is not excessive and there is room for further upside once the rental caps affecting c84% of its NLA fall off in June 2011.

DBS Vickers expects MINT to deliver strong organically-driven DPU CAGR of 9% over FY12-13F. As rental caps expire, the manager will re-price rents nearer to market when leases, amounting to c23%/c26% of revenues are renewed over FY12/13.

Earnings growth is also expected due to strong take-up for its first initiative at property development in Redhill and 3rd party acquisitions including JTC’s trade sale of a portfolio of assets.