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After comparing two healthcare REITs last week, we now move back to looking at the industrial REIT space.
This round, we look at two popular industrial REITs – Keppel DC REIT (SGX: AJBU) and Mapletree Industrial Trust (SGX: ME8U), or MINT.
Keppel DC REIT is a pure data centre REIT with a portfolio of 23 data centres located across nine countries as of the first quarter of 2024 (1Q 2024).
The REIT has a strong sponsor in blue-chip asset manager Keppel Ltd (SGX: BN4).
MINT, on the other hand, is a diversified industrial REIT with 140 properties across three countries as of 31 March 2024.
MINT also has a reputable sponsor in the form of real estate giant Mapletree Investments Pte Ltd.
We decided to compare these two REITs to determine which is the most attractive one.
Portfolio composition
Looking at both REITs’ portfolio composition, MINT has significantly more properties compared with Keppel DC REIT, at 140 versus 23.
MINT’s properties are varied and comprise data centres (nearly 55% of its assets under management or AUM), Hi-Tech Buildings (17%), and Flatted Factories (15.6%), among others.
Keppel DC REIT is a pure-play data centre REIT with 100% of its portfolio invested in data centres.
In terms of country diversification, Keppel DC REIT is one up over MINT as the data centre REIT’s properties are spread out across nine countries.
MINT, however, has a larger AUM compared with Keppel DC REIT.
We like the property diversification for MINT and feel that it helps to buffer against a downturn in the data centre industry.
The rental income is also spread out across more properties for MINT with the largest tenant taking up just 6% of gross rental income (GRI).
Keppel DC REIT’s largest tenant took up 34.7% of the REIT’s GRI.
Winner: MINT
Financials and DPU
Financials-wise, both REITs saw their gross revenue enjoy a year-on-year increase.
Investors should note that Keppel DC REIT saw a jump in gross revenue because of a settlement sum received concerning a tenant dispute.
MINT managed to grow its distribution per unit (DPU) by a minor 0.9% year on year to S$0.0336, contributed by higher rental income from its redevelopment project, Mapletree Hi-Tech Park @ Kallang Way, and a new data centre acquisition in Osaka, Japan.
Keppel DC REIT saw its DPU tumble by 13.7% year on year to S$0.02192 because of a loss allowance made for rental arrears from its Guangdong data centres.
Winner: MINT
Debt metrics
Moving on to each REIT’s debt metrics, both MINT and Keppel DC REIT share nearly the same level of aggregate leverage.
MINT, however, has a lower overall cost of debt at 3.1% versus 3.5%. Its fixed-rate debt percentage was also higher than Keppel DC REIT’s at 84.6% versus 73%.