Mapletree Industrial Trust

Mapletree Industrial Trust ("MIT") is a Singapore-focused real estate investment trust ("REIT") that invests in a diversified portfolio of income-producing real estate used primarily for industrial purposes, whether wholly or partially, as well as real estate-related assets.

MIT's initial portfolio (the "IPO Portfolio") of 70 properties (the "Properties"), valued at S$2.1 billion as at 31 August 2010, includes business park buildings, flatted factories, stack-up/ramp-up buildings and light industrial buildings.

With 7.6% forecast yield and 8.0% projected yield, expiring rental caps and existing rent below market rent, this counter seems not bad. Any other views? What is the industrial rent trend in Singapore in next 5 years ? What is the debt level of this counter after IPO ? Is Singapore's industrial property sector really resilient ?

Thanks.

(15-10-2010, 11:12 AM)cyclone Wrote: What is the industrial rent trend in Singapore in next 5 years ? Is Singapore's industrial property sector really resilient ?

To what I know , currently those high spec light industrial in business park are commanding between $3.00 - $3.50 PSF. Next 5 yrs, it will be flat, my 2 cts view..unlike those grade A office rent in CBD now it is flying like a kite.

I dun think industrial property is resilient, though return yield is goodl but mortgage rate for commercial/industrial properties are higher, also lease-hold is only 30 yrs and some with 60 yrs, oops of track liao.........btw, there are many industrial reits aro, like Ascenda, Mapletree, Cambridge, Aim, etc....

Dear cyclone,
I am curious, may i ask u ....why only me got warning level :0% (see right hand top corner)...wow so fast got yellow card liao..hehe

Koh san,

You seem to have misunderstood the warning level. Everyone gets warning level : 0%. This is how the system works. Only those spammers will get warning level > 0%.

(15-10-2010, 11:05 PM)koh_52 Wrote: Dear cyclone,
I am curious, may i ask u ....why only me got warning level :0% (see right hand top corner)...wow so fast got yellow card liao..hehe

dans Wrote:

ag88 Wrote:

dans Wrote:

ag88 Wrote:wat if u get all 300 lots but open & drop like mad? :twisted:
IPO BB sell to u run road loh come back to buy back 1/2 price from u :twisted:

it this happens, then buy another 300 lots at 1/2 price
15% yield. crzay.

dun pray pray hor, do this exercise, take the prospectus
http://info.sgx.com/webipo.nsf/6bb750ded...a0014dfc9/$FILE/MIT%20Final%20Prospectus%20(12%20October%202010).pdf

take the balance sheet, discount the property price to 70% of current valuation, then calculate the NAV

the NAV machiam may drop from some 80+ cents to 40c hor
+ occupancy drops -> dpu may drop like mad

IPO raise s$ 1.187 billion
pay debt S$977.8 million
end up with new debt S$837.0 million
working capital left s$86 million

to buy better believe SG won't have recession, trmr would always be better

machiam if *severe* recession and the balance sheet discounting happen + heavy debts burden -> rights issue + banks foreclosure on properties -> cry oso no tears

buy stock I never read too much.

If read much, then don't buy stock.

everyday scare this scare that, better put money in bank lah.

----^^^ reposted from CNA mkt forum
perhaps i sounded negative or perhaps i'm too conservative, but just 2 cents
not really sure if 1'd need to apply such severe valuation / safety requirements

but learnt 1 thing, heavy debts -> bad thing when a recession happen, a 30% discounting on assets (properties) results in a ~ 50% discount on NAV bcos of high debts. cos NAV = assets - debts (liabilities)

(19-10-2010, 01:11 AM)ag88 Wrote:

dans Wrote:

ag88 Wrote:

dans Wrote:

ag88 Wrote:wat if u get all 300 lots but open & drop like mad? :twisted:
IPO BB sell to u run road loh come back to buy back 1/2 price from u :twisted:

it this happens, then buy another 300 lots at 1/2 price
15% yield. crzay.

dun pray pray hor, do this exercise, take the prospectus
http://info.sgx.com/webipo.nsf/6bb750ded...a0014dfc9/$FILE/MIT%20Final%20Prospectus%20(12%20October%202010).pdf

take the balance sheet, discount the property price to 70% of current valuation, then calculate the NAV

the NAV machiam may drop from some 80+ cents to 40c hor
+ occupancy drops -> dpu may drop like mad

IPO raise s$ 1.187 billion
pay debt S$977.8 million
end up with new debt S$837.0 million
working capital left s$86 million

to buy better believe SG won't have recession, trmr would always be better

machiam if *severe* recession and the balance sheet discounting happen + heavy debts burden -> rights issue + banks foreclosure on properties -> cry oso no tears

buy stock I never read too much.

If read much, then don't buy stock.

everyday scare this scare that, better put money in bank lah.

----^^^ reposted from CNA mkt forum
perhaps i sounded negative or perhaps i'm too conservative, but just 2 cents
not really sure if 1'd need to apply such severe valuation / safety requirements

but learnt 1 thing, heavy debts -> bad thing when a recession happen, a 30% discounting on assets (properties) results in a ~ 50% discount on NAV bcos of high debts. cos NAV = assets - debts (liabilities)

ag88, your worry is indeed very valid.

actually i 'tikam' 2 lots before rummaging thru the prospectus, attracted by the yields & the fact that it is a big SG industrial reit

UNAUDITED PRO FORMA BALANCE SHEETS AS AT 31 MARCH 2010 AND THE LISTING DATE

non current assets: investment properties: s$2,092,500,000
long term liabilities: s$836,086.000
number of units: 1,462,664,000
NAV stated on prospectus: 86 cents per unit

now apply the 30% discounting so that say in a (severe?) recession the properties are worth 70% current valuation: s$1,464,750,000
long term liabilities : s$836,086.000
net assets: s$628,664,000
NAV (per unit): 42 cents per unit !
almost 50% reduction in NAV for 30% discounting on properties prices

(note, not accurate cos i omit the cash on hand (current assets) which is not a lot, and current liabilities which i assume can settle
---------
lesson learnt (for myself as well), debts on balance sheet matters (for reits & maybe others) and large debts are bad in a recession

Oct 21, 2010
Mapletree IPO shares up

MAPLETREE Industrial Trust made a sparkling debut on Thursday, surging as much as 29 per cent above its IPO price as investors were drawn by its high dividend yield amid rock-bottom interest rates.

Units of Mapletree Industrial, which owns factories and other industrial properties in Singapore, opened at $1.15 a unit against an IPO price of $0.93. It rose as high as $1.20 a unit.

Mapletree's $940 milllion IPO was among a string of successful public offerings of property assets in Asia recently, which also included the $3 billion listing of Singapore wealth fund GIC's logistics unit GLP.

Mapletree shares were trading at $1.17 with a volume of 197.7 million shares.

Mapletree Industrial said it expects to see a distribution yield of about 7.6 per cent for the 12 months ended March 2011.

The trust is managed by Mapletree Investments, a real estate company owned by Singapore state investor Temasek. Mapletree Investments also manages Mapletree Logistics Trust and Lippo-Mapletree Indonesia Retail Trust. Part of the proceeds will be used to pay its existing debt and the purchase consideration for Mapletree Singapore Industrial Trust, the firm said. -- REUTERS

When ST starts using words like "stormed" and "red-hot", you probably get a sense that the market may be over-heating in terms of valuations!

Oct 22, 2010
BULLS AND BEARS
Mapletree Industrial IPO hogs limelight
Reit trades 345m units to close up 25% at $1.16 despite listless market
By Jonathan Kwok

MAPLETREE Industrial Trust (MIT) followed in the footsteps of its government-linked cousin Global Logistic Properties (GLP) by dominating action on its debut on the Singapore Exchange.

Even though it started trading only in the afternoon yesterday, Temasek Holdings-linked MIT stormed to the top of the most actives list, with a red-hot 345 million units switching hands.

Buyers of the real estate investment trust (Reit) seemed oblivious to the broader market's lack of direction as they chased the counter up to $1.20 in early trade, up 29 per cent from its initial public offering price of 93 cents. MIT soon eased to close at $1.16, but was still up a remarkable 25 per cent or 23 cents.

'The action on the market was mostly about Mapletree,' said one remisier.

'In the morning, a lot of retail players called up and wanted to buy it when it opened... though by after 2.30pm or 3pm, the action was starting to slow down and the price was coming down.'

MIT's stellar performance could hardly have come as a surprise, given that the IPO was 38 times oversubscribed.

And GLP, a unit of the Government of Singapore Investment Corp, had set a strong precedent on its Monday debut as it traded more than 500 million shares - almost a quarter of the day's total volume - and rose 11 per cent.

Since then, the fever over GLP has subsided somewhat, though it managed a very respectable 62.9 million shares yesterday as it rose three cents to $2.29. Its IPO price was $1.96.

The market on the whole, though, has been far less exciting than the fortunes of these two newcomers.

Other than a brief period yesterday morning, the benchmark Straits Times Index (STI) traded listlessly in negative territory as data from Chinese authorities showed growth in the world's second-largest economy was slowing down. The STI's close of 3,163.53 was a fall of 15.62 points, or 0.49 per cent, on the day.

Demand for MIT boosted volumes to 2.48 billion shares - well up from Wednesday's 1.9 billion - but some other punters' favourites were in play as well.

Golden Agri-Resources fell 1.5 cents to 65.5 cents on 240.1 million shares, while Genting Singapore saw volumes of 180.6 million as it dipped four cents to $2.22. Berlian Laju Tanker rose half a cent to six cents on 134.5 million shares.

Mapletree Logistics Trust (MLT), which like MIT is sponsored by Temasek's Mapletree Investments, benefited from her sister stock's debut yesterday. MLT's volumes jumped to 65.6 million units as it rose two cents to 90.5 cents.

Keppel Land dipped one cent to $4.49, after reporting an 11 per cent drop in third quarter net profit to $70.1 million, as revenue from property sales fell.

Nonetheless, Kim Eng Securities reiterated its 'buy' recommendation and raised its target price to $5.60 from $4.82, adding: 'The expected net gain of $321 million from the proposed sale of Marina Bay Financial Centre Phase 1 should lend weight to fourth quarter earnings. We remain positive on Keppel Land's sizeable exposure to international Grade A office space.'

Marine and offshore services provider BH Global Marine lost half a cent to 34.5 cents, despite the company's Taiwan Depository Receipts (TDRs) receiving a sterling reception in Taipei since listing there on Wednesday. The TDRs surged 6.89 per cent to close at NT$19.40 - the second day it had tested the price movement limits of the Taiwan bourse, which bar counters from moving in price by more than 7 per cent in a day.

Among the banks, DBS Group Holdings lost 12 cents to $14.36 and United Overseas Bank slid 14 cents to $18.44 while OCBC Bank was steady at $9.10.

Elsewhere in the region, the Nikkei 225 Index in Tokyo was just about flat while the Shanghai Composite Index dipped 0.68 per cent. Hong Kong's Hang Seng Index advanced 0.39 per cent.

jonkwok@sph.com.sg

MIT's 1st distribution of 1.52 cents (SGD) per unit for the period from 21 October 2010 (“Listing Date”) to 31 December 2010 comprises a taxable income component of 1.34 cents (SGD) per unit and a capital component of 0.18 cents (SGD) per unit.

How to explain to a layman what is the difference between the two components? Why would a REIT return capital to unit holders?

2 July 2011 – Mapletree Industrial Trust Management Ltd. (“MITM”), the Manager of
Mapletree Industrial Trust (“MIT”), is pleased to announce that MIT has been awarded
Tranche 2 of JTC Corporation’s (“JTC”) second phase divestment exercise portfolio of
Flatted Factories and Amenity Centres (“Acquisition Portfolio”) at a price of S$400.3 million
(“Acquisition”).
Commenting on the award, Chief Executive Officer of MITM, Mr Tham Kuo Wei said, “There
are limited portfolio acquisition opportunities of this nature in Singapore. We are pleased to
have secured the Acquisition Portfolio which complements MIT’s existing Portfolio. The
Acquisition will increase the value of MIT’s investment properties by 18% to S$2.6 billion
while improving the diversification and resilience of the enlarged MIT Portfolio. Furthermore,
there is good embedded organic growth potential as the passing rent of the Acquisition
Portfolio is more than 30% below the latest JTC posted rents as at 1 July 2011.”
The Acquisition Portfolio consists of 11 properties in 5 Property Clusters (“Property Cluster”),
comprising 8 Flatted Factories and 3 Amenity Centres. The properties in the Acquisition
Portfolio are located in established industrial estates at the Central and Eastern regions of
Singapore and well-connected by major roads and expressways. They are adjacent to or
near existing MIT properties and have similar characteristics, thus offering opportunities for
improvements in leasing and operational efficiencies.





Gearing already at 36%. Rights issue or placement coming?