6 Takeaways from Mapletree Industrial Trust AGM

 

I took some time to attend the Mapletree Industrial Trust 12th Annual General Meeting physically today at the Mapletree Business City auditorium.

Physical attendance was poor from the large number of empty seats as the AGM could also be watched through live webcast online.

Let me summarise the 5 things I learnt from this meeting.

1. Strong income producing ability

Distributable income in FY21/22 is $350.9m increased by 18.8% year-on-year. DPU of 13.8 cents. This is great for investors.

2. Great financial flexibility

3. Strong financial results

4. Strong Balance Sheet

5. Hedged from interest rate impact

The management plans to maintain hedged loans at between 70% and 80% instead of 100% in order to preserve some financial flexibility and the hedges come at a cost i.e. 3% interest cost effectively immediately with an impact on DPU.

6. Portfolio Highlights

In conclusion, Mapletree Industrial Trust is strong financially and has a stable balanced portfolio but its outlook remains challenging in face of "fast and furious" interest rates by the FED and evolving landscape of data center assets. Protected by hedged debts, riding on the uptrend of USD and potential positive GDP in Singapore in 2022, MIT should still do pretty well in the short to mid term. 

However, its long term prospects will need to be fueled by more DPU accretive suitable acquisitions at reasonable interest rate loans and equity fund raising, which is not easy. The chairman highlights uncertainty in future headwinds such as recession in US which may present opportunities cheaper properties. The manager will remain prudent, be nimble in future transactions.

Thanks for reading. Stay safe and remain strong always!

With love & peace,

Qiongster