Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Asia’s leading multi-asset exchange

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Equity Bottom-Up

Mapletree Industrial Trust / Equity Bottom-Up

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<ul>
<li>
Of the REITs on SGX, three largest REITs belonging to the Mapletree family are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust. Over the last two weeks of October, the three Mapletree trusts reported earnings for the six months ended 30 Sept 2020. 
	 </li>
	<li>
For 1H ended 30 Sept 2020, MLT, MIT and MCT averaged a DPU of 4.75 Singapore cents, down an average of 4.3% YoY. MLT was the only trust that registered a YoY percentage increase in DPU – up 1.2% – for the period under review. 
	 </li>
	<li>While the outlook for industrial and commercial property segments remains challenging given uncertainty over the trajectory of economic recovery – both globally and domestically – the three Mapletree trusts remain resilient, underpinned by prudent management strategies and strong portfolio fundamentals.</li>
</ul>
 

Of the REITs on SGX, three largest REITs belonging to the Mapletree family are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust.

MLT and MIT invest in logistics, industrial and data centre assets respectively, both in Singapore and beyond, while MCT invests in office and/or retail real estate assets in Singapore.

Over the last two weeks of October, the three Mapletree trusts reported earnings for the six months ended 30 September 2020.

Earnings Highlights  
For the six months ended 30 Sept 2020, MLT, MIT and MCT averaged a distribution per unit (DPU) of 4.75 Singapore cents, down an average of 4.3% YoY. MLT was the only trust that registered a YoY percentage increase in DPU – up 1.2% – for the period under review.

For 1H FY20/21, MLT, MIT and MCT averaged net property income of S$189.8 million, up 3.1% YoY, while gross revenue averaged S$228.5 million, up 2.5% YoY.

<ul>
<li>MLT reported revenue growth mainly due to higher contributions from existing properties, accretive acquisitions in FY19/20, and contributions from completed redevelopment of Mapletree Ouluo Logistics Park Phase 2 in Shanghai. This was partly offset by rental rebates granted to eligible tenants impacted by COVID-19 and divestment of one property in China in FY19/20.</li>
	<li>MIT’s growth was driven by new revenue contribution from 14 data centres in the US, but offset by rental reliefs extended to tenants and loss of revenue due to redevelopment of Kolam Ayer 2 Cluster.</li>
	<li>MCT’s 1H FY20/21 gross revenue and net property income fell 2.5% and 2.6% YoY respectively mainly due to COVID-19 rental rebates, but the impact was offset by contributions from Mapletree Business City II. 
	 </li>
</ul>
1H FY20/21 Earnings

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			DPU (SG cts)
			</td>
			<td>
			YoY Chg (%)
			</td>
			<td>
			Net Property Income (S$M)
			</td>
			<td>
			YoY Chg (%)
			</td>
			<td>
			Gross Revenue (S$M)
			</td>
			<td>
			YoY Chg (%)
			</td>
		</tr>
<tr>
<td>
			MAPLETREE LOGISTICS TRUST
			</td>
			<td>
			4.10
			</td>
			<td>
			1.2
			</td>
			<td>
			237.7
			</td>
			<td>
			10.4
			</td>
			<td>
			264.2
			</td>
			<td>
			9.4
			</td>
		</tr>
<tr>
<td>
			MAPLETREE INDUSTRIAL TRUST
			</td>
			<td>
			5.97#
			</td>
			<td>
			-4.2
			</td>
			<td>
			160.3
			</td>
			<td>
			1.5
			</td>
			<td>
			202.5
			</td>
			<td>
			0.5
			</td>
		</tr>
<tr>
<td>
			MAPLETREE COMMERCIAL TRUST
			</td>
			<td>
			4.17^
			</td>
			<td>
			-9.9
			</td>
			<td>
			171.5
			</td>
			<td>
			-2.6
			</td>
			<td>
			218.7
			</td>
			<td>
			-2.5
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			4.75
			</td>
			<td>
			-4.3
			</td>
			<td>
			189.8
			</td>
			<td>
			3.1
			</td>
			<td>
			228.5
			</td>
			<td>
			2.5
			</td>
		</tr>
</tbody></table>
Source: Company data #Amount available for distribution includes tax-exempt income amounting to S$7.1 million withheld and not included in the 39th distribution (equivalent to distribution per unit of 0.32 cent). Had the tax-exempt income distribution been included, DPU for 1HFY20/21 would be 6.29 cents.

#As announced on 2 Jul 2020, MIT declared an advanced distribution of 0.03 cent per unit for 1 Jul 2020. The advanced distribution was paid on 28 Jul 2020.

^In 4Q FY19/20, MCT made capital allowance claims and retained capital distribution totalling S$43.7 million to conserve liquidity in view of the uncertainty due to the COVID-19 pandemic. Of this, S$15.0 million was released to unitholders and included in the distribution for 1H FY20/21 
 

Debt Profiles

As at 30 Sept 2020, the trio averaged an aggregate leverage ratio of 37.1%, compared with an average 37.4% as at 30 June 2020. MLT and MIT had the highest aggregate leverage ratios of 39.5% and 38.1% respectively.

Interest cover for the trio averaged 5.3 times as at 30 Sept 2020, versus 5.6 times as at 30 June 2020, with MIT chalking up the highest interest coverage ratio of 7.0 times.

<table class="table table-striped"><tbody>
<tr>
<td>
			Name
			</td>
			<td>
			Aggregate Leverage Ratio (%) as at 30 Sept 2020
			</td>
			<td>
			Aggregate Leverage Ratio (%) as at 30 June 2020
			</td>
			<td>
			Interest Coverage Ratio (x) as at 30 Sept 2020
			</td>
			<td>
			Interest Coverage Ratio (x) as at 30 June 2020
			</td>
		</tr>
<tr>
<td>
			MAPLETREE LOGISTICS TRUST
			</td>
			<td>
			39.5
			</td>
			<td>
			39.6
			</td>
			<td>
			4.9
			</td>
			<td>
			4.8
			</td>
		</tr>
<tr>
<td>
			MAPLETREE INDUSTRIAL TRUST
			</td>
			<td>
			38.1
			</td>
			<td>
			38.8
			</td>
			<td>
			7.0
			</td>
			<td>
			7.9
			</td>
		</tr>
<tr>
<td>
			MAPLETREE COMMERCIAL TRUST
			</td>
			<td>
			33.8
			</td>
			<td>
			33.7
			</td>
			<td>
			4.0
			</td>
			<td>
			4.1
			</td>
		</tr>
<tr>
<td>
			Average
			</td>
			<td>
			37.1
			</td>
			<td>
			37.4
			</td>
			<td>
			5.3
			</td>
			<td>
			5.6
			</td>
		</tr>
</tbody></table>
 Source: Company data

 

Outlook Mapletree Logistics Trust

<ul>
<li>With the ongoing pandemic, tenants remain cautious on expansion and are slower to commit in view of the economic uncertainties</li>
	<li>All tenants have resumed operations except for a few in Singapore, representing 0.3% of MLT’s revenue base</li>
	<li>As a portfolio, overall occupancies for MLT’s logistics facilities have stayed resilient at 97.5% while rental rates have been stable</li>
	<li>A prolonged COVID-19 situation and economic downturn may adversely affect demand for warehouse space 
	The Manager continues to be vigilant and remain focused on proactive asset management and strategic acquisition opportunities with a view to provide stable long-term returns for unitholders</li>
	<li>The Manager will remain prudent on cash flow management while maintaining a strong balance sheet</li>
	<li>As at 30 September 2020, MLT has a gearing ratio of 39.5% and a well-staggered debt maturity profile with an average debt duration of 3.8 years</li>
	<li>Based on the available committed credit facilities on hand, MLT has more than sufficient liquidity to meet its maturing debt obligations in the coming 12 months</li>
	<li>On the capital management front, 80% of MLT’s total debt has been hedged into fixed rates while 75% of income stream for the next 12 months has been hedged into SGD</li>
</ul>
Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/BA2U2VJMOMTFJ8UR/635653_20201019-MLT_2QFY2021_Press%20Release_final.pdf">here</a> for full results release. 
 

Mapletree Industrial Trust

<ul>
<li>The Manager will continue to support its tenants, especially small and medium-sized enterprises tenants who have been affected by supply chain disruptions and fall in business volume as a result of the pandemic
	<ul>
<li>About 54% of the Singapore Portfolio (or 40% of the Overall Portfolio) (by gross rental income) as at 30 September 2020 comprises SME tenants</li>
	</ul>
</li>
	<li>The Manager estimates that the rental reliefs extended to tenants would amount to about S$20 million, which will affect MIT’s distributable income for FY20/21
	<ul>
<li>This includes the COVID-19 Assistance and Relief Programme of up to S$13.7 million and mandated rental reliefs under the COVID-19 (Temporary Measures) (Amendment) Act</li>
		<li>Rental reliefs of approximately S$7.1 million had been extended to tenants in 1QFY20/21 and 2QFY20/21 with additional rental reliefs expected to be given in FY20/21</li>
	</ul>
</li>
	<li>The Manager will not be withholding any income in 2QFY20/21 in view of the gradual stabilisation of the COVID-19 situation in Singapore</li>
	<li>MIT’s large and diversified tenant base with low dependence on any single tenant or trade sector will continue to underpin its portfolio resilience</li>
	<li>The long leases in Data Centres in Singapore and North America as well as build-to-suit projects will further strengthen the portfolio’s resilience</li>
</ul>
Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/13WZONZ1S30PE9NR/636638_20201027_2QFY20%20Results_Press%20Release.pdf">here</a> for full results release. Mapletree Commercial Trust

<ul>
<li>
Retail

	<ul>
<li>According to CBRE, with the further easing of “circuit breaker” measures, the majority of retail tenants have resumed operations, resulting in a gradual recovery in retail sales and shopper traffic</li>
		<li>While sentiments have improved, the retail market continued to be affected by the absence of international tourists and work-from-home measures</li>
		<li>Occupancies and rents are expected to remain under pressure, although the extent will be mitigated by limited new retail supply</li>
	</ul>
</li>
	<li>
Office
	<ul>
<li>Coupled with a bleak employment outlook, office demand continued to dampen</li>
		<li>As vacancies are expected to rise, landlords are realigning their rental expectations, thus narrowing the rental expectation gap between tenants and landlords; rate of rental decline has been cushioned by various government stimulus packages and rental relief schemes</li>
		<li>Concerns on the possible over-supply in 2022 have dissipated as developments have been delayed by at least three months, allowing supply and demand to recalibrate</li>
	</ul>
</li>
	<li>
Business Park
	<ul>
<li>Occupier activity was relatively muted with some demand arising from the technology sector</li>
		<li>Renewals were a prominent feature although some large occupiers were seen to have cut back on space requirements; more downsizing could be on the horizon as tenants recalibrate their footprint</li>
		<li>Nonetheless, firms still consider business parks favourably in their long-term plans; City Fringe business parks will continue to garner interest despite their tight supply and rental premium over the Rest of Island business parks.</li>
	</ul>
</li>
	<li>
Overall
	<ul>
<li>MCT is cognisant of the uncertainties posed by COVID-19 on the overall sector, including weaker consumer sentiments, continued border closures, work-from-home directives and social distancing measures, as well as lower prospective demand for commercial space</li>
		<li>Potential challenges could also arise when the COVID-19 impact hits in full force after the end of government support measures as well as a prolonged pandemic</li>
		<li>MCT’s focus remains to maintain a healthy portfolio occupancy and sustainable rental income by working closely with our tenants</li>
		<li>Anchored by a well-diversified portfolio with key best-in-class assets, MCT is expected to derive stable cashflows from high quality tenants; its resilience will keep the vehicle well-placed to ride through the crisis</li>
	</ul>
</li>
</ul>
Click <a href="https://links.sgx.com/1.0.0/corporate-announcements/Z6K70UNYMW37MQ2M/636066_20201022%20-%20MCT%201H%20FY2021%20Press%20Release.pdf">here</a> for full results release.
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Of the REITs on SGX, three largest REITs belonging to the Mapletree family are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust. Over the last two weeks of October, the three Mapletree trusts reported earnings for the six months ended 30 Sept 2020. 
	 
	
For 1H ended 30 Sept 2020, MLT, MIT and MCT averaged a DPU of 4.75 Singapore cents, down an average of 4.3% YoY. MLT was the only trust that registered a YoY percentage increase in DPU – up 1.2% – for the period under review. 
	 
	While the outlook for industrial and commercial property segments remains challenging given uncertainty over the trajectory of economic recovery – both globally and domestically – the three Mapletree trusts remain resilient, underpinned by prudent management strategies and strong portfolio fundamentals.

 

Of the REITs on SGX, three largest REITs belonging to the Mapletree family are Mapletree Logistics Trust, Mapletree Industrial Trust and Mapletree Commercial Trust.

MLT and MIT invest in logistics, industrial and data centre assets respectively, both in Singapore and beyond, while MCT invests in office and/or retail real estate assets in Singapore.

Over the last two weeks of October, the three Mapletree trusts reported earnings for the six months ended 30 September 2020.

Earnings Highlights   
For the six months ended 30 Sept 2020, MLT, MIT and MCT averaged a distribution per unit (DPU) of 4.75 Singapore cents, down an average of 4.3% YoY. MLT was the only trust that registered a YoY percentage increase in DPU – up 1.2% – for the period under review.

For 1H FY20/21, MLT, MIT and MCT averaged net property income of S$189.8 million, up 3.1% YoY, while gross revenue averaged S$228.5 million, up 2.5% YoY.


MLT reported revenue growth mainly due to higher contributions from existing properties, accretive acquisitions in FY19/20, and contributions from completed redevelopment of Mapletree Ouluo Logistics Park Phase 2 in Shanghai. This was partly offset by rental rebates granted to eligible tenants impacted by COVID-19 and divestment of one property in China in FY19/20.
	MIT’s growth was driven by new revenue contribution from 14 data centres in the US, but offset by rental reliefs extended to tenants and loss of revenue due to redevelopment of Kolam Ayer 2 Cluster.
	MCT’s 1H FY20/21 gross revenue and net property income fell 2.5% and 2.6% YoY respectively mainly due to COVID-19 rental rebates, but the impact was offset by contributions from Mapletree Business City II. 
	 

1H FY20/21 Earnings




			Name
			
			
			DPU (SG cts)
			
			
			YoY Chg (%)
			
			
			Net Property Income (S$M)
			
			
			YoY Chg (%)
			
			
			Gross Revenue (S$M)
			
			
			YoY Chg (%)
			
		


			MAPLETREE LOGISTICS TRUST
			
			
			4.10
			
			
			1.2
			
			
			237.7
			
			
			10.4
			
			
			264.2
			
			
			9.4
			
		


			MAPLETREE INDUSTRIAL TRUST
			
			
			5.97#
			
			
			-4.2
			
			
			160.3
			
			
			1.5
			
			
			202.5
			
			
			0.5
			
		


			MAPLETREE COMMERCIAL TRUST
			
			
			4.17^
			
			
			-9.9
			
			
			171.5
			
			
			-2.6
			
			
			218.7
			
			
			-2.5
			
		


			Average
			
			
			4.75
			
			
			-4.3
			
			
			189.8
			
			
			3.1
			
			
			228.5
			
			
			2.5
			
		

Source: Company data #Amount available for distribution includes tax-exempt income amounting to S$7.1 million withheld and not included in the 39th distribution (equivalent to distribution per unit of 0.32 cent). Had the tax-exempt income distribution been included, DPU for 1HFY20/21 would be 6.29 cents.

#As announced on 2 Jul 2020, MIT declared an advanced distribution of 0.03 cent per unit for 1 Jul 2020. The advanced distribution was paid on 28 Jul 2020.

^In 4Q FY19/20, MCT made capital allowance claims and retained capital distribution totalling S$43.7 million to conserve liquidity in view of the uncertainty due to the COVID-19 pandemic. Of this, S$15.0 million was released to unitholders and included in the distribution for 1H FY20/21  
 

Debt Profiles

As at 30 Sept 2020, the trio averaged an aggregate leverage ratio of 37.1%, compared with an average 37.4% as at 30 June 2020. MLT and MIT had the highest aggregate leverage ratios of 39.5% and 38.1% respectively.

Interest cover for the trio averaged 5.3 times as at 30 Sept 2020, versus 5.6 times as at 30 June 2020, with MIT chalking up the highest interest coverage ratio of 7.0 times.




			Name
			
			
			Aggregate Leverage Ratio (%) as at 30 Sept 2020
			
			
			Aggregate Leverage Ratio (%) as at 30 June 2020
			
			
			Interest Coverage Ratio (x) as at 30 Sept 2020
			
			
			Interest Coverage Ratio (x) as at 30 June 2020
			
		


			MAPLETREE LOGISTICS TRUST
			
			
			39.5
			
			
			39.6
			
			
			4.9
			
			
			4.8
			
		


			MAPLETREE INDUSTRIAL TRUST
			
			
			38.1
			
			
			38.8
			
			
			7.0
			
			
			7.9
			
		


			MAPLETREE COMMERCIAL TRUST
			
			
			33.8
			
			
			33.7
			
			
			4.0
			
			
			4.1
			
		


			Average
			
			
			37.1
			
			
			37.4
			
			
			5.3
			
			
			5.6
			
		

 Source: Company data

 

Outlook Mapletree Logistics Trust


With the ongoing pandemic, tenants remain cautious on expansion and are slower to commit in view of the economic uncertainties
	All tenants have resumed operations except for a few in Singapore, representing 0.3% of MLT’s revenue base
	As a portfolio, overall occupancies for MLT’s logistics facilities have stayed resilient at 97.5% while rental rates have been stable
	A prolonged COVID-19 situation and economic downturn may adversely affect demand for warehouse space 
	The Manager continues to be vigilant and remain focused on proactive asset management and strategic acquisition opportunities with a view to provide stable long-term returns for unitholders
	The Manager will remain prudent on cash flow management while maintaining a strong balance sheet
	As at 30 September 2020, MLT has a gearing ratio of 39.5% and a well-staggered debt maturity profile with an average debt duration of 3.8 years
	Based on the available committed credit facilities on hand, MLT has more than sufficient liquidity to meet its maturing debt obligations in the coming 12 months
	On the capital management front, 80% of MLT’s total debt has been hedged into fixed rates while 75% of income stream for the next 12 months has been hedged into SGD

Click here for full results release.  
 

Mapletree Industrial Trust


The Manager will continue to support its tenants, especially small and medium-sized enterprises tenants who have been affected by supply chain disruptions and fall in business volume as a result of the pandemic
	
About 54% of the Singapore Portfolio (or 40% of the Overall Portfolio) (by gross rental income) as at 30 September 2020 comprises SME tenants
	

	The Manager estimates that the rental reliefs extended to tenants would amount to about S$20 million, which will affect MIT’s distributable income for FY20/21
	
This includes the COVID-19 Assistance and Relief Programme of up to S$13.7 million and mandated rental reliefs under the COVID-19 (Temporary Measures) (Amendment) Act
		Rental reliefs of approximately S$7.1 million had been extended to tenants in 1QFY20/21 and 2QFY20/21 with additional rental reliefs expected to be given in FY20/21
	

	The Manager will not be withholding any income in 2QFY20/21 in view of the gradual stabilisation of the COVID-19 situation in Singapore
	MIT’s large and diversified tenant base with low dependence on any single tenant or trade sector will continue to underpin its portfolio resilience
	The long leases in Data Centres in Singapore and North America as well as build-to-suit projects will further strengthen the portfolio’s resilience

Click here for full results release.   Mapletree Commercial Trust



Retail

	
According to CBRE, with the further easing of “circuit breaker” measures, the majority of retail tenants have resumed operations, resulting in a gradual recovery in retail sales and shopper traffic
		While sentiments have improved, the retail market continued to be affected by the absence of international tourists and work-from-home measures
		Occupancies and rents are expected to remain under pressure, although the extent will be mitigated by limited new retail supply
	

	
Office
	
Coupled with a bleak employment outlook, office demand continued to dampen
		As vacancies are expected to rise, landlords are realigning their rental expectations, thus narrowing the rental expectation gap between tenants and landlords; rate of rental decline has been cushioned by various government stimulus packages and rental relief schemes
		Concerns on the possible over-supply in 2022 have dissipated as developments have been delayed by at least three months, allowing supply and demand to recalibrate
	

	
Business Park
	
Occupier activity was relatively muted with some demand arising from the technology sector
		Renewals were a prominent feature although some large occupiers were seen to have cut back on space requirements; more downsizing could be on the horizon as tenants recalibrate their footprint
		Nonetheless, firms still consider business parks favourably in their long-term plans; City Fringe business parks will continue to garner interest despite their tight supply and rental premium over the Rest of Island business parks.
	

	
Overall
	
MCT is cognisant of the uncertainties posed by COVID-19 on the overall sector, including weaker consumer sentiments, continued border closures, work-from-home directives and social distancing measures, as well as lower prospective demand for commercial space
		Potential challenges could also arise when the COVID-19 impact hits in full force after the end of government support measures as well as a prolonged pandemic
		MCT’s focus remains to maintain a healthy portfolio occupancy and sustainable rental income by working closely with our tenants
		Anchored by a well-diversified portfolio with key best-in-class assets, MCT is expected to derive stable cashflows from high quality tenants; its resilience will keep the vehicle well-placed to ride through the crisis
	


Click here for full results release.



Mapletree Pan Asia Commercial Trust (MCT SP)

1H Earnings of Three Largest Mapletree REITs