Mapletree Industrial Trust's NPI inched up 1.4% to $71.88m in Q3

The firm attributes the income boost to its hi-tech building strategy.

Mapletree Industrial Trust (MIT) saw its net property income (NPI) advance 1.4% YoY to $71.88m in Q3 for FY18/19 which ended 31 December 2018 from $70.86m, an announcement revealed.

Gross revenue also rose 2.3% YoY to $93.57m in Q3 from $91.47m during the same period in FY17/18. The firm attributed the growth to contribution from phase one of its built-to-suit project for HP Singapore, as well as new contributions from data centre Mapletree Sunview 1 and commercial property 30A Kallang Place. However, these were partially offset by lower occupancies in the flatted factories and stack-up/ramp-up buildings segments, its financial statement added.

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

Distribution per unit (DPU) moved up 6.6% YoY to $0.03 in Q3 from $0.028, whilst distributable income also rose 9% YoY to $58.25m from $53.45m in FY17/18. “This was mainly due to the income contribution from MIT’s 40% interest in the portfolio of 14 data centres in the US,” the firm explained in a statement.

The firm’s average portfolio occupancy improved in Q3 to 88.2% from 86.7%, with its Singapore portfolio occupancy rising to 87.7% from 86.2% in Q2 FY18/19 on the back of higher occupancies in all its property segments with the exception of the light industrial buildings and ramp-up buildings segments.

“We are pleased that our strategy of growing the hi-tech buildings segment has yielded positive results,” Mapletree Industrial Trust Management’s CEO Tham Kuo Wei said in a statement. “These have helped to mitigate the headwinds we are experiencing in the Singapore industrial property market.”

Also read: Data centre operators turn West amidst Tai Seng space crunch

In Q3, Mapletree Industrial Trust Management announced its proposed acquisition of commercial development 18 Tai Seng for $268.3m from its sponsor Mapletree Investments. The nine-storey high-specification industrial development comprises of Business 2 industrial, office and retail space with a gross floor area (GFA) of approximately 443,810 sqft.

Likewise, MIT announced its collaboration with Equinix Singapore in the latter’s efforts to expand its presence in the Lion City. A seven-storey data centre at 7 Tai Seng which is slated for completion in H2 2019 will mark Equinix’s fourth data centre in Singapore, and builds on Equinix’s presence at MIT’s properties which includes 26A Ayer Rajah Crescent and 180 Peachtree in Atlanta, US.

Amidst elevated global trade tensions which are forecasted to bleed into Q1 2019, business sentiment amongst local companies have moderated significantly. MIT said it forecasted a further moderated in global expansion on the back of the still escalating trade tensions.

“The upcoming supply of competing industrial space is expected to moderate both the market rents and occupancy rates,” the firm added. “Mapletree Industrial Trust Management remains focused on tenant retention to maintain a stable portfolio occupancy.