Mapletree Logistics Trust (MLT) is keeping its first-quarter distribution steady despite having been hit with a $17.2 million loss in the fair value of financial hedging instruments.
The trust yesterday posted a 57.9 per cent drop to $21.5 million in total return attributable to unitholders for the three months to June 30, down sharply from $51 million in the same period a year ago.
This was on the back of losses in the fair value of interest rate swaps, cross currency swaps and currency forwards that were used to hedge certain financial risk exposures, said the trust's manager.
The total amount distributable to unitholders, however, climbed 0.4 per cent to $46 million, while distribution per unit (DPU) remained unchanged at 1.85 cents. This will be paid out on Sept 2.
Net property income increased 5.7 per cent to $75.2 million, and gross revenue grew 5.3 per cent to $89.6 million.
AT A GLANCE
GROSS REVENUE: $89.6 million (+5.3%)
NET PROPERTY INCOME: $75.2 million (+5.7%)
DISTRIBUTION PER UNIT: 1.85 cents (Unchanged)
The improvements were mainly driven by contributions from acquisitions, organic growth from Hong Kong and Japan and the translation impact from a stronger Japanese yen, said the manager.
But it added that this was partly offset by lower contributions from Singapore, given the impact from conversions of single-user assets to multi-tenanted buildings and the loss of contribution from 76 Pioneer Road, which is undergoing re-development. In addition, two properties were divested last year.
Net asset value per unit stood at $1 as at June 30, compared with $1.01 as at the same time last year.
The trust's portfolio comprises 118 properties with a book value of $5.09 billion and a gross floor area of about 3.4 million sq m as at June 30. The average occupancy rate was 95.4 per cent, while the weighted average lease expiry by net lettable area stood at about 4.4 years.
MLT's properties achieved positive rental reversions of between 1 and 11 per cent across the various countries, except for South Korea, which posted negative reversion for the Pyeongtaek Port property, given the master lease's expiry.
The manager noted that global economic conditions remain "fragile and uncertain", and that pressure on occupancy and rental rates will likely remain amid the challenging leasing environment for MLT's portfolio.
"Nevertheless, MLT's diversified portfolio, large tenant base and well-staggered lease expiry profile are expected to provide resilience to the portfolio," it said.
Ms Ng Kiat, chief executive of the manager, added: "Amid the challenging operating environment, we remain focused on managing lease expires and tenant retention, and renewed or replaced 98 per cent of leases expiring in (the first quarter)."