MIT could lose 10-20% of tenants if circuit breaker tightens

Its management estimates that 10% might seek rent deferrals.

Mapletree Industrial Trust (MIT) could lose 10-20% of their tenants who are operating-as-usual if the pandemic escalates further and the government tightens its circuit breaker measures as a result, according to a UOB Kay Hian report.

Currently, it’s business-as-usual for 70% of the REIT’s tenants, which are mostly in its high-tech buildings. However, its management estimated that close to 10% of tenants might seek rent deferrals.

As of March, the ratio of its overdue rents held steady at 0.2% of its rolling 12-month gross revenue.

Further, over half or 55% of MIT’s Singapore portfolio by gross rental income are SME tenants, or companies with annual turnover of less than $100m or employ less than 200 workers. These tenants are expected to seek relief from the government if the pandemic drags on.

According to an SGX filing, MIT’s net property income jumped 10.5% YoY to $318.06m in FY2019, on the back of higher revenue contributions from 18 Tai Seng, 30A Kallang Place, 7 Tai Seng Drive and Mapletree Sunview 1.

This was, however, partly offset by lower revenue from the flatted factories segment due to the decantment of tenants as a result of the redevelopment of Kolam Ayer 2 Cluster into a high-tech industrial precinct.