Mapletree Industrial Trust return has been consistent for many years. DPU Up and Up except when ... . Is not surprising that investors expect 3QFY21/22 to be Up as well. Glad there is no disappointment. See below table. Due to it's consistency, annualizing it's latest Q result DPU will gives a good projection for the year yield at minimum. Of-course there's always exception and therefore not guaranteed. Another reason I like this Reit is that it gives quarterly dividend.
At today closing price, yield is at 5.35% which looks sustainable. Further supported by resumption of distribution reinvestment plan to help fund progressive needs of development projects. Occupancy at 93.6%. Gearing at 39.9% which mean possibility of right issue will still be there.
It has respectable adjusted ICR of 5.9 times thanks to almost 50% of the Reits are in NA DCs and which has much longer WALE. Singapore Operation is stable and decent.
One thing to note is this "On 11 May 2021, MIT issued S$300.0 million of fixed rate perpetual securities. The perpetual securities, net of issuance costs, are classified and recognised as equity instruments." . Roughly 10% of the Reit borrowing IIRC and which the perpetual is included in the Adjusted ICR.
How good is this Reit to me ?
The Power of this Reit = EPU % + Yield % = 5.7% + 5.35% = 11.05%. An unorthodox way of benching up a reit ability. The Power is only meaningful if the earning and dividends are sustainable in absolute using number of shares as denominator. A modification to Reit due to property valuation can be volatile is to use NPI. Therefore Reit Power = NPI % + Yield % = 13.1% + 5.35% = 18.45%. This is the first time we do this. Let see how other Reits perform against it in future articles.
This MIT Reit Rocks so far but it need not be forever considering how MCT is treated.
Please DYODD on all the information and thoughts.
Ok ! Back to House Chores again.
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what is EPU%?ReplyDelete
Earning Per Unit.Delete