Friday, April 23, 2010

MapletreeLog DPU rises 2% in Q1

Distributable income climbs 8% on lower property expenses and borrowing costs


MAPLETREE Logistics Trust (MLT) yesterday reported an 8 per cent climb in first-quarter distributable income to $30.8 million from $28.6 million a year earlier.


Distribution per unit (DPU) rose 2 per cent to 1.5 cents from 1.47 cents a year ago.

Distributable income rose as the logistics trust lowered property expenses and cut down its borrowing costs by reducing interest costs and lowering the leverage - even as revenue fell year-on-year as portfolio occupancy dipped.

MLT's gross revenue fell 3.5 per cent to $51.4 million for the three months ended March 31, 2010 from $53.3 million a year ago. Revenue fell due to lower rental revenue from the trust's Hong Kong and China properties (mostly due to higher vacancies), although this was offset by higher revenue from Singapore and Japan properties (mainly due to the additional properties). Overall portfolio occupancy dipped slightly to 98 per cent from 99 per cent a year ago.

MLT said that the economic environment has shown signs of improvement - but not across the board in all the geographies in which MLT operates. Sentiments remain cautious, the trust added.

'We think there is still some time for the absorption of the vacant space, especially in Hong Kong, before the rentals can move up,' said Chua Tiow Chye, chief executive of the trust's manager. But this could happen for some markets in the second half of this year, he added.

The trust is already making plans to buy more properties. The trust completed the acquisition of two properties in Q1 2010, one each in Singapore and in Japan.

MLT's sponsor Mapletree Investments and partner Itochu plan to develop logistics projects of approximately US$300-500 million over the next three to five years, which will be offered to MLT on a right of first refusal basis.

'We are looking to possibly bring some of these assets over in the course of this year or next year,' said deputy chief executive officer Richard Lai.

MLT's portfolio comprises 84 properties with a total book value of $3.0 billion. More than half of the properties are in Singapore, while the others are in Malaysia, Japan, Hong Kong, China and South Korea.

MLT also said in an update that it has $1.2 billion of debt as at end Q1, of which around $145 million is due for refinancing over the rest of the year.

MLT's shares gained 1.5 cents to close at 87.5 cents yesterday.

Source: Business Times, 23 Apr 2010

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