Quick and Short thoughts on Mapletree Industrial Trust's Results (SGX: ME8U)

Just saw Mapletree Industrial Trust (MIT) results and decided to pen some thoughts.

Below information are taken out of MIT's slides.

Passing Rent	Q4 17/18	Q1 18/19	Q2 18/19	Q3/18/19	Q4/18/19
Flatted Factories	$1.81	$1.81	$1.81	$1.79	$1.78
Hi-Tech Buildings	$2.65	$2.65	$2.76	$2.7	$2.84
Business Park Buidings	$3.8	$3.79	$3.8	$3.72	$3.76
Stack Up/ Ramp Up Buildings	$1.3	$1.31	$1.3	$1.3	$1.28
Light Industrial Buildings	$1.45	$1.44	No info	No info	No info

Generally, passing rent is on a downtrend apart from Hi-Tech Buildings.

To illustrate things in detail, we will use 2 charts. On the Y-Axis is the amount per square foot.

Flatted Factories

What I think would happen

Passing Rent would continue to fall as new leases are way below current passing rent. Although renewal rents have been above passing rent in first 3 quarters,  the point of inflection seems to have been achieved in Q4.

It is not stated that how much of revenue is obtained from flatted factories but flatted factories accounted for 33.1% of MIT's portfolio. Which is why its passing rents would have a huge impact on its revenue.

Hi-Tech Buildings

What I think would happen

Passing Rent would likely fall as the average new leases per square foot renewal from Q2 to Q4 amounted to $2.54 per square foot on average whereas the passing rent at end of Q4 is $2.84. The average passing rent is much lower due to a huge amount of lease being renewed in Q2, which had a low rate of $1.75.

Hi-Tech buildings stood for 43.3% of MIT's portfolio which is why its passing rents would have a huge impact on its revenue.

Conclusion

Based on these info above which indicates negative reversion in rates, I am not too optimistic with regards to organic growth coming from the trust in the upcoming year. 

As this is my first time taking a look at Mapletree Industrial Trust, there might be a chance that I might be wrong with my analysis but after taking a look at the results over the year.

I would not be a fan of this trust. Even though when this trust is up 9.4% year to date when the STI is up about 10.5%.

That concludes the quick thoughts, following my previous post, i will upload some kpop pics that is not related to the post at the end as well........