Is Mapletree Industrial Trust A Good Buy In 2025? [Fundamental Analysis]

In this article, we'll conduct a fundamental analysis and review of Mapletree Industrial Trust and its suitability to achieve the following investment objective: To deliver a stable dividend yield of 5% to 6% per year while having high capital preservation ability.

Information Is Accurate Up To June 25

Business Description

Mapletree Industrial Trust is an industrial REIT that was listed in 2011 and owns industrial properties with an increasing focus on data centres.

What I Like About MIT:

• Very stable operating performances and distribution (Figure 8)

  
  

• Management had exhibited proficiency in managing the REIT’s strategic direction (Figure 9) and capital management (Figure 5) to adhere to the changing times. They have also demonstrated a strong track record in their ability to deliver yield-accretive capital recycling measures.

  
  

• A high number of tenant base that is well diversified across industries and a well-spread-out lease expiry profile. All of which points to a low tenancy concentration risk. (Figure 12)

What I Do Not Like About MIT:

• -

Updates From Recent Performance (FY 2024/5)

General Comments:

• The manager extended their presence in Japan with the acquisition of a freehold property in Tokyo with the intended use of redeveloping it into a new data centre (Figure 9)

  
  

• The manager has also divested $535.3 million worth of Singapore properties, which is expected to be completed in 3Q 2025. The proceeds will be used to pare down debt, which should bring the gearing ratio down to 37% from the current 40.1%, while pending redeployment.

  
  

• Gross revenue and NPI increased around 2% y.o.y, mainly driven by the contributions from the second and third phases of fitting out works of the Osaka DC. DPU from operations grew by 0.32%.

  
  

• Weighted average rental reversion rate stood at 9.2% in FY24/25, though the occupancy rate experienced a slight dip of 0.5% to 92.1%.

Positive Tailwinds:

• Global demand for data centres remains robust, driven by the adoption and development of generative AI. The strong demand will provide support for positive rental reversions and low vacancy rates for MIT’s data centres.

  
  

• As interest rates taper from the 2nd half of 2025, the cost of borrowing is expected to come down for MIT, though this will probably happen in FY2026/7.

Negative Headwinds:

• Global uncertainty surrounding the ongoing trade war is starting to put pressure on the industrial space within Singapore as rents are seen moderating and plateauing in 2025.

  
  

• DPU for FY2025/6 may be impacted by the loss of income from the Singapore divestments.

  
  

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Disclaimer:

This article is meant to be the opinion of the author

This article is for information purposes only

This article should not be seen as financial advice

This advertisement has not been reviewed by the Monetary Authority of Singapore