Mapletree Industrial Trust 4QFY19/20 DPU Declined Due to Capital Retention For COVID-19

Mapletree Industrial Trust had released their 4QFY19/20 financial results on 27th April 2020. The manager had declared a Distribution Per Unit (“DPU”) of 2.85 cents. This was a decline of 7.5% as compared to 4QFY18/19 despite releasing a good set of financial results. The reason for the decline was also due to the retention of capital for COVID-19 pandemic. Without the retention of capital, the DPU for this quarter is estimated to be 3.15 cents which is an increase of 2.3% as compared to 4QFY18/19.

This quarter, Gross Revenue grew by 3.0% to S$101.8 million and Net Property Income grew by 3.2% to S$78.3 million. Distributable amount increased 15.4% to S$69.2 million. In view of the uncertainty from the COVID-19 pandemic, tax-exempt income (distributions relating to joint ventures) of S$6.6 million has been withheld in 4QFY19/20 for greater flexibility in cash management.

I am expecting more distributable income to be withheld in next few quarters as Mapletree Industrial Trust had committed to support tenants with a COVID-19 Assistance and Relief Programme of up to S$13.7 million.

Below are the 4QFY19/20 financial results.

4QFY19/20 Financial Results

4QFY19/20
(S$’000)
4QFY18/19
(S$’000)
YoY(%)
Gross Revenue101,80198,8223.0%
Net Property Income78,25675,8503.2%
Distributable Amount 69,15359,93615.4%
Distribution Per Unit (“DPU”) (cents) (Before Capital Retention)3.153.082.3%
Distribution Per Unit (“DPU”) (cents)(After Capital Retention)2.853.08(7.5)%

FY19/20 Full Year Financial Results

Without the retention of estimated 0.30 cents in 4QFY19/20, annualized Distribution Per Unit (“DPU”) would have been 12.54 cents which is an increase of 3.13% as compared to a year ago.

FY19/20
(S$’000)
FY18/19
(S$’000)
YoY(%)
Gross Revenue405,858376,1017.9%
Net Property Income318,069287,77010.5%
Distributable Amount 265,337231,75914.5%
Distribution Per Unit (“DPU”) (cents) (Before Capital Retention)12.5412.163.13%
Distribution Per Unit (“DPU”) (cents)(After Capital Retention)12.2412.160.7%

Occupancy

Overall portfolio occupancy stood at 91.5%. I didn’t quite like the occupancy take up rate for flatted factories, business park buildings and light industrial buildings. I wonder how many percentage are single tenant versus multi-tenant?

Below are the top 10 tenants by gross rental income.

As you can see above, HP is the largest tenant contributing 8% of Mapletree Industrial Trust Portfolio’s Gross Rental Income. Based on past case studies, this poses a risk should the tenant decides to shift out of its properties. (Read more: Hewlett Packard Vacates Alexandra Technopark)

Debt

As of 31st March 2020, gearing ratio stood at 37.6% with no loans to refinance in FY20/21. For short term investment, this is a good thing as there is no debt to worry about. For longer term, we will have to monitor the COVID-19 pandemic situation.

Current Dividend Yield

Based on the current price of S$2.47 and FY19/20 full year DPU of 12.24 cents, this translate to a current dividend yield of 4.96%.

For an industrial REIT, I am expecting a dividend yield of 6% or more.

If you managed to catch Mapletree Industrial Trust at the low of S$1.91 during last month stock market crash, you will be getting a dividend yield of 6.41% which I think this should be the reasonable yield for an industrial REIT.

Summary

While I read about some analyst mentioning Mapletree Industrial Trust is an alternative data center play, data center only makes up 31.6% of the portfolio value. I will prefer Keppel DC REIT provided we enter at the right price.

I am expecting the share price of Mapletree Industrial Trust to come down as the manager had said that they have committed to support tenants with a COVID-19 Assistance and Relief Programme of up to S$13.7 million. This will eat into their distributable income.

As long the dividend yield is right above 6%, it will make sense to buy into Mapletree Industrial Trust.

Screening For Dividend Stocks In November 2019

How do I find stocks to analyse and decide if it is worth investing? Every month, I will always start by running the stock screener that I have saved on Stocks Café. There are several websites that offer such a tool to screen for stocks using conditions that you can set such as dividend yield, P/E ratio, P/B ratio and Market Capitalization etc. Some website that offers such a tool are Singapore Exchange, FSMOne and StocksCafe.

The stock screener offered by Stocks Café allows me to save the conditions that I can pre-set. You can check out my review here on the Stocks Café Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Below are the top 10 dividend yielding stocks as of 14th November 2019.

NameCurrent Yield %P/EP/BMarket Cap
OUE8.90419.940.331.3B
Haw Par8.76516.290.9693B
CapitaRetail China Trust7.3169.570.9871.8B
Cromwell REIT SGD7.18310.960.9311.9B
Cromwell REIT EUR7.09811.450.9661.3B
Mapletree NAC Trust6.7576.050.8533.9B
Mapletree Industrial Trust6.07616.931.585.4B
Frasers Commercial Trust5.9639.770.9821.5B
Yanlord Land5.7144.830.4732.4B
Frasers Logistics and Industrial Trust5.69111.861.2712.7B

With the ongoing protests in Hong Kong, this has impacted REITs that have Hong Kong assets in its portfolio. Protesters are vandalising malls and this causes shoppers to stay at home, forcing shopping malls and shops to shut their doors.

One such example is Mapletree North Asia Commercial Trust which has Festival Walk as one of its assets.

Mapletree North Asia Commercial Trust is a real estate investment trust, which invests directly or indirectly in a diversified portfolio of income-producing real estate in Hong Kong SAR, China and Japan. It focuses on commercial assets as well as real estate-related assets. Its objective is to achieve an attractive level of return from rental income and long-term capital growth. The company was founded in February 2013 and is headquartered in Singapore.

When the share price fall, the current dividend yield increases. Further analysis is required to check the fundamentals of Mapletree North Asia Commercial Trust if it is still able to sustain its historical dividend payout.

Opportunity?

Screening For Dividend Stocks In September 2019

How do I find stocks to analyse and decide if it is worth investing? Every month, I will always start by running the stock screener that I have saved on Stocks Café. There are several websites that offer such a tool to screen for stocks using conditions that you can set such as dividend yield, P/E ratio, P/B ratio and Market Capitalization etc. Some website that offers such a tool are Singapore Exchange, FSMOne and StocksCafe.

The stock screener offered by Stocks Café allows me to save the conditions that I can pre-set. You can check out my review here on the Stocks Café Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Below are the top 10 dividend yielding stocks as of 25th September 2019.

NameCurrent Yield %P/EP/BMarket Cap
Haw Par8.56916.460.9793B
Cromwell REIT EUR7.2411.340.9571.3B
CapitaRetail China Trust7.2219.390.9371.8B
Cromwell REIT SGD7.18311.110.9441.9B
Frasers Logistics and Industrial Trust7.07412.051.3322.7B
Frasers Logistics and Industrial Trust AUD6.85412.821.372.9B
Mapletree Industrial Trust6.117.271.6245B
Frasers Commercial Trust5.9639.741.0361.5B
SPH5.86913.820.993.4B
Mapletree NAC Trust5.8346.580.9184.2B

Haw Par has appeared in my previous screening for dividend stocks. The current yield of 8.569% is misleading and I would have dived into the stock if I have not done my personal analysis of Haw Par. Haw Par has paid out a special dividend last year and that is why it always appear top in my screening list for dividend stocks.

There are a few stocks in the above list that I am interested in. Thus, they are possible candidates to add to my stock portfolio after I have done my personal analysis of them. They are Cromwell REIT, CapitaRetail China Trust, Mapletree Industrial Trust and Mapletree NAC Trust. All of them have a current dividend yield of above 5% which is one of the conditions for dividend stocks.

One of the best feature about Stocks Café is that the description gives you a summary about the REIT

Cromwell REIT

Cromwell European Real Estate Investment Trust engages in the investment in property. It focuses on diversified portfolio of income-producing real estate assets in Europe. It operates through the following property sub-portfolios: Office, Light Industrial, and Other. The Office asset class includes Netherlands, Italy, and Finland. The Light Industrial asset class comprises of Netherlands, France, Germany, Denmark, and Italy. The Other asset class focuses on Italy. The company was founded on April 28, 2017 and is headquartered in Singapore.

Capita Retail China Trust

CapitaLand Retail China Trust is a real estate investment trust. It operates through the following segments: CapitaMall Xizhimen, CapitaMall Wangjing, CapitaMall Grand Canyon, CapitaMall Xinnan, CapitaMall Erqi, CapitaMall Shuangjing, CapitaMall Minzhongleyuan, CapitaMall Qibao, CapitaMall Saihan, and CapitaMall Wuhu. It invests on a long-term basis in a diversified portfolio of income-producing real estate used primarily for retail purposes and located primarily in China, Hong Kong and Macau. The company was founded in 2006 and is headquartered in Singapore.

Mapletree Industrial Trust

Mapletree Industrial Trust engages in the provision of real estate solutions and investment in industrial properties. It operates through the following segments: Flatted Factories, Hi-Tech Buildings, Business Park Buildings, Stack-Up and Ramp-Up Buildings, and Light Industrial Buildings. The company was founded on January 29, 2008 and is headquartered in Singapore.

Mapletree North Asia Commercial Trust

Mapletree North Asia Commercial Trust is a real estate investment trust, which invests directly or indirectly in a diversified portfolio of income-producing real estate in Hong Kong SAR, China and Japan. It focuses on commercial assets as well as real estate-related assets. Its objective is to achieve an attractive level of return from rental income and long-term capital growth. The company was founded in February 2013 and is headquartered in Singapore.