SINGAPORE (Apr 23): The manager of Mapletree Industrial Trust (MIT) reported 4Q18 distribution per unit of 2.95 cents per unit, 2.4% higher compared to 2.88 cents in 4Q17.
This brings DPU for FY18 to 11.75 cents, 3.2% higher than the DPU of 11.39 cents for FY17.
Amount available for distribution in 4Q18 was $55.5 million, 7.2% higher than the corresponding quarter last year mainly due to distribution declared by joint venture of $3.2 million.
Gross revenue for 4Q18 was $90.4 million, 2.9% higher than the corresponding quarter last year. This was due to revenue contribution from the build-to-suit (BTS) project for HP Singapore, partially offset by lower portfolio occupancies across all the property segments except for Light Industrial Buildings.
Property operating expenses were $22.5 million, 3.1% higher than the corresponding quarter last year. This was mainly attributed to higher property maintenance expenses, property taxes and marketing commission, partially offset by lower utilities.
As a result, the net property income in 4Q18 increased by 2.9% to $67.9 million.
Net income was $51.9 million, 1.0% higher than the corresponding quarter last year. This was largely due to higher net property income and interest income, partially offset by higher borrowing costs and manager’s management fees.
Interest income was higher at $1.0 million as compared to $0.2 million in 4Q17 mainly due to interest earned on loan to the joint venture. The higher borrowing costs were due to interest expense from debt borrowed to fund investment in joint venture and full quarter effect of the higher hedged rates as well as higher swap offer rates in 4Q18.
The interest incurred in relation to HP which were being expensed upon obtaining Temporary Occupation Permit (TOP) also contributed to the higher borrowing costs. Higher manager’s management fees were due to better portfolio performance and increased value of assets under management.
In its outlook, MIT's manager says the wider economy and business sentiments of the small and medium enterprises in Singapore have been improving.
Meanwhile, the supply for multi-tenant data centres in the US in net operational square feet is expected to grow by 8.8% while the demand will grow by 13.4% this year.
But despite the positive outlook, threats to free trade and geopolitical tensions continue to threaten the growth momentum. In addition, the impending large supply of competing industrial space will exert pressure on both occupancy and rental rates.
Units in MIT closed 1 cent higher at $2.02 on Monday.
