Mapletree Logistics Trust net property income jumps by 6.3% to $72.9m

On back of new asset contributions.

The property firm’s active proactive acquisitions paid off as contributions from its new assets lifted its topline by 7.3% to $87.5m yoy.

According to analysts from CIMB, among the newly acquired properties spearheading the growth were five new assets acquired in FY15 and three bought in FY16.

Higher income from properties in Hong Kong and Singapore also lifted the earnings, but were partially offset by lower occupancy from converted multi-tenanted buildings and the redevelopment of 76 Pioneer.

Meanwhile, CIMB said Mapletree’s lack of divestment gains and issuance of new units under its distribution reinvestment plans led the DPU to fall by 1.1%.

“Lease reversions remained positive, albeit at a slower pace MLT renewed 572,000sq m of space at an average rental reversion of 3% in 2Q (vs. 5% in 1Q), while portfolio occupancy crept up to 96.9% as more of the MTB space was taken up. An estimated 5.4% of leases are due to be renewed in FY16 and a further 16.3% in FY17,” CIMB said.

As the leasing environment becomes more competitive in Singapore and China, CIMB says rental reversion quantums would remain positive.

“More asset conversion in the works MLT has another two assets to be converted to MTB, two properties earmarked for redevelopment/divestment in Singapore in FY16 and nine single-user leases that are expiring in FY17. Hence, we expect the higher expenses to have negative impact on margins and drag DPU in the near term,” they added.