Mapletree Logistics' DPU up 2% to 7.44 cents

Thanks to higher occupancy from its diverse portfolio.

Even with 28% of its portfolio expiring next year, Mapletree Logistics Trust (MLT) will not be scrambling for help thanks to its diversified portfolio.

MLT’s distribution per unit (DPU) climbed up by 2% for the year despite the recent rise in its share price. Its net property income (NPI) also rose from $291m to $312m in a year.

Higher occupancy from the company’s properties improved its revenue. Singapore saw an occupancy increase by 0.5%, whilst the rate in China and Vietnam rose by 1.3% and 2.9%. South Korea was the only exception as the country’s overall occupancy rates dropped to 83.3% this year.

In a report, DBS Group Research head analysts Derek Tan and Mervin Song said, “Looking ahead, MLT sees improved operational stability and higher rents in most of its markets.”

Hong Kong has also contributed 15% to MLT’s revenue, while Australia has given 8%, driven by the strong demand for space. Japan remained a stable contributor with a 19% contribution.

The company’s growth will not be without trouble, though, as new supply of logistics supply (9% of total warehouse supply) is expected to fall in 2018 onwards, Tan and Song said.

Additionally, Tan and Song stated, “Recent positive numbers coming out of Singapore’s industrial production, if sustained, could mean that the slack in vacancy rates could be absorbed from 2018 onwards. Therefore, we believe that the logistics sector should post a turnaround from 2018 onwards.”

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