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Thursday, 26 January 2012

Mapletree Industrial Trust reports stronger DPU

Mapletree Industrial Trust reports higher DPU of 2.06 cents per share this FY 2011 3Q. This was on the back of higher Portfolio occupancy and positive rental revisions.

However, one should note that the gross rental rates for it's portfolio is treading down at $1.53, down from the peak of $1.54 from the previous quarter.

In addition, rental renewals for it's lease is something to note. They are having 28.5% that is due for renewal for Fiscal Year 2012 and 30.4% for Fiscal Year 2013. The period when the economy is expected to grow at a slower pace and Europe is set to go into an recession. A very poor timing to do so, although the governments around the world is set to pump in more money if they see weaker economic growth for the next 2 years.

However, this measures would take time to implement and MIT might not be able to take advantage of the upswing. Rental rates for it's Business Park segment fell from $4.57 to $4.13 for renewals, although rent rates for it's flatted factories Stack-up and Warehouses are up.

Watch out for one of it's biggest tenant that takes up 1% of their revenue which is RIM, the maker of Blackberry, they are looking very weak now and might do burst soon. MIT would see a 1% fall in their earnings if RIM fails or pulls out from Singapore. They might face higher cost as they are going to enhance their asset buildings in Toa Payoh and Woodlands.

They would face bigger headwinds in the foreseeable future and for that, I would resist buying this stock as of just yet. Stock price fell in recent days from $1.08 to $1.06.