Diversified ventures could uplift Mapletree Industrial Trust

Its acquisitions and developments supported the 1.5% YoY growth in its H1 DPU.

Mapletree Industrial Trust (MINT) could lure investors to accord the REIT with strong valuations through its overseas ventures given its ability to offer ‘strong certainty of growth’, DBS Group Research said.

“The manager’s well-timed acquisitions and completion of development projects underpin a steady growth profile and more importantly, a constant upgrade and refresh of the portfolio that is resistant to business cycle fluctuations,” the research body explained.

The research firm noted that MINT delivered a 1.5% YoY growth in H1 distribution per unit (DPU) backed by the contribution from past and recently completed acquisitions and developments. Moreover, its pipeline remains strong, led by Kallang Way and the planned development of a high-specification industrial property in Tai Seng, which drive earnings higher in FY20-21 onwards.

Also read: Mapletree Industrial Trust NPI dipped 0.1% to $70.59m in Q2

“The manager also reinstated a dividend reinvestment program (DRP) which historically had strong take-up rates from unitholders, which would enable the REIT to pare down debt over time,” DBS Group Research said.

Meanwhile, the research firm thinks that an increase in refinancing rates could be negative to distributions.

“However, we note that MINT has minimised this risk by hedging c.74% of its borrowings into fixed rates,”

MINT witnessed its net property income (NPI) dip 0.1% to $70.59m in its Q2 FY 18/19.