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MAPLETREE Industrial Trust (MIT)
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Delvyss
Master |
03-Apr-2025 11:27
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Mapletree Industrial Trust: Mispriced risks, value playhttps://www.dbs.com.sg/treasures/aics/templatedata/article/recentdevelopment/data/en/DBSV/032025/MINT_SP_03142025.xml |
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seanpent
Supreme |
01-Apr-2025 09:02
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Moving to properties and reits | ||||
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Joelton
Supreme |
31-Mar-2025 23:53
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Mapletree Industrial Trust banks on diversification, balance to deliver sustainable returns
It is not heading towards becoming a 100% data centre Reit resilient Singapore industrial portfolio will continue to be a key area, says Lily Ler, CEO of the manager
[SINGAPORE] Diversification and balance are at the left, right, and centre of Mapletree Industrial Trust : ME8U -0.47%&rsquo s (MIT) strategy.
At its initial public offering in 2010, the real estate investment trust&rsquo s (Reit) entire S$2.1 billion assets under management (AUM) was in Singapore industrial properties such as flatted factories, business-park buildings, ramp-up buildings and light industrial properties. As at Dec 31, 2024, only 44.1 per cent of the trust&rsquo s S$9.2 billion AUM was in Singapore industrial properties. The other 55.9 per cent was in 62 data centres (55 in the United States, one in Canada, two in Japan and four in Singapore).
&ldquo Generally for the data centre market as a whole, the demand is definitely there and is definitely growing &ndash with all the usage of AI (artificial intelligence), machine learning, edge computing, etc,&rdquo said Lily Ler, the chief executive officer of the manager of MIT.
That said, MIT is not heading towards becoming a 100 per cent data centre Reit. &ldquo We are still looking to keep our Singapore industrial business, which provides us a stable base with some growth,&rdquo she added.
In the October to December 2024 quarter, MIT&rsquo s flatted factories were 98.1 per cent occupied. The occupancy figure for its stack-up/ramp-up buildings was 96.7 per cent its three business-park buildings had a relatively high occupancy averaging 80.1 per cent compared with the overall 77.9 per cent for Singapore business parks.
&ldquo Our Singapore industrial portfolio continues to be a key area that we would like to continue, because of its resilience. It has seen us through quite a number of cycles since listing and we believe it will continue to do that,&rdquo Ler said in a recent interview with The Business Times.
Wider geograhical spread for data centre acquisitions
Growth in the next couple of years is likely to come from more data centre acquisitions, but there will be a wider geographical spread. MIT is looking at key data centre markets in Europe &ndash Frankfurt, London, Amsterdam, Paris and Dublin &ndash and is also open to secondary markets such as Milan and Madrid, said Ler.
In Asia, target markets include Japan, South Korea and Australia. The trust remains keen on more data centres in Singapore, though there are limitations to develop new ones amid power constraints.
There is also potential for MIT to increase its exposure to the US.
Digital Core Reit gains new substantial shareholder
MIT has the right of first refusal to its sponsor and parent Mapletree Investments&rsquo 50 per cent interest in Mapletree Rosewood Data Centre Trust, which owns 10 powered shell data centres (where just the building shell is provided and the tenant has to do the interior fit-out) and holds 80 per cent interest in three fully fitted hyperscale data centres. The remaining 20 per cent interest in the three hyperscale data centres is held by Digital Realty.
A hyperscale data centre can handle larger-scale workloads, such as cloud computing and AI.
Ler does not have a target size for MIT&rsquo s data centre portfolio. &ldquo The quality of the portfolio is what we want to look at it must be able to deliver sustainable returns.&rdquo
Recycling capital
&ldquo As time goes by, certain properties may no longer be so relevant, such as data centres with lower power capacity. So we might look at divesting them and recycling the capital to acquire, say, a hyperscale data centre with big-boy tenants of very good quality, and taking long leases.&rdquo This will add value to the trust&rsquo s portfolio. MIT did not identify its hyperscale provider tenants, also known as hyperscalers. Generally these would be the likes of Meta, AWS, Google Cloud and Microsoft Azure.
As at Dec 31, 2024, cloud/hyperscale providers accounted for 20.1 per cent of MIT&rsquo s data centre portfolio, by gross rental income (GRI).
Ler hopes to grow this segment of tenants as well as that of colocation providers, in yet another reflection of MIT&rsquo s balanced approach. Businesses can rent space at a colocation data centre for their IT infrastructure such as servers and network equipment, instead of owning or managing their own data centre.
Colocation providers&rsquo share of MIT&rsquo s data centre portfolio was 43.9 per cent as at Dec 31, 2024. Tenants in this segment include Centersquare, Equinix and Digital Realty.
Enterprise or end-user tenants account for 29 per cent of MIT&rsquo s data centre portfolio.
&ldquo While hyperscalers have very good credit standing and take long leases, given the scale of their investments in the data centre, rental escalations tend to be flattish as they have stronger bargaining power,&rdquo Ler noted.
Colocation providers, being smaller, provide data centre landlords such as MIT with the rental growth, she added.
Increased exposure to both hyperscaler and colocation-provider tenants means that the share of end-user/enterprise tenants will shrink, said Ler.
One of MIT&rsquo s enterprise tenants, AT& T, has a lease at the trust&rsquo s data centre at 7337 Trade Street, San Diego, ending in May 2026 after being extended twice by 12 months and 17 months. As at Dec 31, 2024, AT& T accounted for about 3 per cent of MIT&rsquo s overall portfolio by GRI. There has been concern among some analysts on the impact on MIT if AT& T does not renew its lease.
Putting things in perspective, Ler observed that many cases of non-renewal of data centre leases involve enterprise/end-user tenants. &ldquo The reason behind them not continuing has to do with certain corporate decisions rather than with reference to the particular data centre.&rdquo
Managing lease expiries is part and parcel of a real estate landlord&rsquo s business and MIT has in place proactive strategies for its portfolio, including its US data centres. One is to encourage tenants to extend their leases ahead of time.
An exiting data centre tenant can be replaced with another, or the space re-let for other uses. Following the expiry of AT& T&rsquo s lease at another MIT-owned data centre, in Brentwood, Tennessee, in November 2023, the trust inked a 30-year lease with Vanderbilt University Medical Center for the entire asset in June 2024.
Other options include redeveloping, say, a data centre with low power capacity into one with a bigger capacity.
Blessing in disguise
A tenant departure may also provide an opportunity for the trust to rebalance its portfolio by divesting a non-core property or one that is fully optimised.
When it comes to growing its Singapore industrial property portfolio, a key challenge MIT faces is the shorter land tenures issued for industrial sites by the authorities &ndash mostly 23 years and 33 years &ndash compared with up to 60 years in the past.
This leaves less time for a developer to recoup its investment. &ldquo As the land tenure reduces, the valuation declines, which can be hard for a Reit like us,&rdquo noted Ler.
That said, MIT has some assets in its portfolio with relatively longer balance land leases which it has redeveloped from flatted factories to hi-tech buildings.
In 2017, it completed a build-to-suit (BTS) facility in the Depot Road area for HP Singapore with a gross floor area (GFA) of 824,576 square feet (sq ft), almost double what was previously on the site.
In March 2023, MIT completed Mapletree Hi-Tech Park @ Kallang Way, achieving a 70 per cent increase in GFA over the previous flatted factory cluster on site, to 865,687 sq ft. The project comprises a seven-storey BTS block fully leased to Biotronik, and two nine-storey blocks, which MIT is in the midst of filling up. The committed occupancy for the overall project is about 60 per cent.
Since its listing, the Reit has divested five assets, the most recent of which was the S$50.6 million sale of a cluster of two flatted factories in Tanglin Halt last year.
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behonest
Senior |
24-Mar-2025 20:36
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seanpent
Supreme |
24-Mar-2025 08:54
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MIT back to the moon ! | ||||
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behonest
Senior |
23-Mar-2025 19:23
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Mapletree Investments said to be considering sale of A$1.4 billion office portfolio in Australia: reportsThe potential divestment comes just as post-pandemic optimism about the office market is growing  Published Fri, Mar 21, 2025 · 02:46 PM
[SINGAPORE] Property developer Mapletree Investments could be preparing to divest an office portfolio in Australia valued at A$1.4 billion (S$1.2 billion) &ndash potentially marking one of the largest real estate sales Down Under in this decade. Citing unnamed &ldquo industry players&rdquo , Australian media said the Temasek-backed real estate investment giant is likely to split any offer of the properties into at least two tranches, to capitalise on different buyer pools. It added that some individual buildings could also be snapped up by private buyers, given that many are suburban assets which could either be repositioned or repurposed. The potential divestment comes after a period in which mainly city or long-leased assets have transacted. While suburban market values have fallen, the portfolio could provide an entry point for new players, or for private investors and value-add firms. Mapletree&rsquo s Australian office portfolio &ndash comprising buildings across major cities &ndash was assembled just before the pandemic. A NEWSLETTER FOR YOUTUESDAY, 12 PM Property InsightsGet an exclusive analysis of real estate and property news in Singapore and beyond. The Singapore asset manager, anticipating a market reset then, was one of the top buyers of Australian office properties among foreign investors. Mapletree first entered the Australian market in 2014, as it looked to capitalise on rental growth amid limited office supply. In 2019, the developer closed its Mapletree Australia Commercial Private Trust (Mascot) fund, which raised A$654 million in equity. It retained a 27 per cent stake in the trust. Other backers included Indonesian developer Sinarmas Land. Mascot, which was set up with a five-year term with provision for two extensions of one year each, attracted institutional investors such as pension funds, insurance companies, regional banks and corporates, as well as high-net-worth and family office investors. It was designed as an income-yielding fund, with 10 Grade A office assets across Sydney, Melbourne, Adelaide, Brisbane and Perth. In response to queries, a spokesperson said: &ldquo Mapletree is constantly evaluating Mascot&rsquo s strategy to maximise value for its investors.&rdquo While the property market was disrupted by the Covid-19 pandemic, there is now renewed optimism over the recovery of the office sector. If the reported divestment materialises, it would mark the exit from one of Mapletree&rsquo s largest investments in Australia. The portfolio spans a total of about 160,000 square metres of net lettable area, and comprises &ldquo reputable&rdquo occupiers from industries ranging from technology, media and telecom to government, mining, and oil and gas. |
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petson
Master |
17-Mar-2025 20:04
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could the equipment become lass relavant over time and maybe obselette as technology advance at breakneck speed? dydd | ||||
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PiRPiR
Veteran |
17-Mar-2025 19:52
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MINT ?mispriced? as investors have ?ignored? its balanced exposure: DBS Mapletree Industrial Trust (MINT) is a ?resilient dividend anchor? and its recent share price weakness is ?mispriced?, say DBS Group Research analysts Derek Tan and Dale Lai. MINT?s unit price has declined 7.14% year to date, but are up nearly 2% over the past month. Investors were perhaps rattled by concerns over dividend sustainability amid expected non-renewals and capital value risk in the USA, note the analysts. However, Tan and Lai believe the manager has actively managed the portfolio, successfully renewing or back-filling of around 70% of expiries over the past two years, ?demonstrating the continued relevance of their assets to enterprise needs?. ====== pay wall ======== https://www.theedgesingapore.com/capital/brokers-calls/mint-mispriced-investors-have-ignored-its-balanced-exposure-dbs |
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MrBear12
Supreme |
17-Mar-2025 14:50
Yells: "A bear will always be a bear" |
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No worries bro cheng. As long as your children make well in this life, you are well protected from any interest rate movements. I look forward to a time when i shall rest from my labours while being invested in Reits. I suppose this MIT can be a fone investment as long as it does not become over leveraged and suddenly need equity injection. trade without over leveraging
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chengwh1
Elite |
17-Mar-2025 14:44
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Thank you again, Bear,... apologies frot he late reply. It' s hard for me to explain why I' m skeptical of using the 10y rate,... but I do use it too. Then on the Fed Funds Rate (FFR),... the FLOATING RATE portion of the loan of a REIT is immediately affected by this. Hence, for REITs with bigger floating rate portions, that REIT will start to enjoy interest cost savings when the FFR drops. When interest rates were low many yrs ago, there was a lot of focus on the ' Fixed Rate' portion. Today,... Floating Rates are more helpful for dpu growth.
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Delvyss
Master |
13-Mar-2025 16:33
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Dividend payable on 14/3/2025 | ||||
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BinderyT
Elite |
12-Mar-2025 15:30
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10y is not indicative. This is the real price being paid every second in the bond market for 10y treasuries. Fed fund rate is frankly, irrelevant as it influence only short term borrowing. That' s why REITs move in tandem with the 10y.
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Delvyss
Master |
12-Mar-2025 15:29
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More short coverings in the coming sessions.
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seanpent
Supreme |
12-Mar-2025 14:40
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A strong u turn too. The savvy ones anticipated that Reits will not stay this low forever.
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MrBear12
Supreme |
12-Mar-2025 14:35
Yells: "A bear will always be a bear" |
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I advise don't keep track. We go crazy.
Rather the key is still increasing revenues and rental reversion and uplifts. Business revenue increases shld outpace net finance costs. Go for big boys. They have better diversification across countries and industries. But if there is a recession, reits will be hit hard
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chengwh1
Elite |
12-Mar-2025 14:30
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This ' future expected interest rates' keep shifting badly till we can' t even keep track. For REITs and their planning purposes and to do their reportings, yeah,... for investors,.. not so applicable.
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MrBear12
Supreme |
12-Mar-2025 13:22
Yells: "A bear will always be a bear" |
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Actual is important but much of the reits expected cost of debt comes from future expected interest rates when refinancing.
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chengwh1
Elite |
12-Mar-2025 13:19
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Bro Bear,... somehow, I will still focus on the actual interest rate movement, rather than looking at the 10-year yields which are just indicative in nature. These yields move on expectations of future interest rate movements,... for which we are already looking closely at.
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chengwh1
Elite |
12-Mar-2025 13:15
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Not all REITs are rushing up at the same speed. I know my CICT really sped-up in the last 2 days, but FEHT, KIT, Aims Apac, MPACT and CCT are at snail-speed or just whipsawing up and down. Interest rates might move in either direction. Hence,... REITs might take either direction in future,... the only thing we can do is to select the ' stronger' REITs. This will cater to a rising interest rate if this does happen. | ||||
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beng1102
Elite |
12-Mar-2025 12:15
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Also mean short sellers are in hurry to short cover. As of 28 Feb 2025 open short postion is 23,354,541 shares.
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