Mapletree Industrial Trust’s second-quarter distribution falls 6.6%

Mapletree Industrial Trust announced on Oct 27 that its distribution per unit for the quarter ended Sep 30 fell 6.6 per cent to S$0.0297, against S$0.0318 a year earlier. Unitholders will receive the payment on Dec 9.

Quarterly gross revenue decreased 1.9 per cent to S$167 million, while net property income was 3.5 per cent lower at S$119.8 million. Funds available for distribution totalled S$84.8 million, compared with S$90.7 million a year earlier.

The manager said revenue and net property income were affected by reduced contributions from North America, lost income following the sale of three Singapore industrial properties and a weaker yen against the Singapore dollar. Increased revenue from Singapore lease renewals and new leases provided a partial offset.

Property expenses rose 2.4 per cent to S$47.3 million. Borrowing costs, however, fell 6.8 per cent to S$20.2 million. The manager attributed the reduction to loan repayments using Singapore divestment proceeds and lower interest on unhedged floating-rate debt, partly offset by higher costs when matured interest-rate swaps were repriced.

For the half-year spanning Apr 1 to Sep 30, distribution per unit declined 5.7 per cent to S$0.0608. Gross revenue dropped 4.8 per cent to S$329.3 million, and net property income fell 6.1 per cent to S$242 million.

Average portfolio occupancy slipped to 89.7 per cent from 90.7 per cent in the preceding quarter. The manager cited lower North American occupancy following a lease non-renewal at 7337 Trade Street in San Diego. Singapore’s weighted average rental reversion improved to 6.9 per cent from 5.3 per cent.

The manager said previously announced North American lease non-renewals and higher borrowing costs from maturing interest-rate swaps would affect near-term performance.