Mapletree Logistics Trust (MLT) reported yesterday a 1.1 per cent year-on-year drop in distribution per unit (DPU) to 1.86 Singapore cents for the second quarter.

The total return attributable to unit-holders fell 0.3 per cent to $46.2 million from a year earlier owing to higher borrowing costs, tax, management fees and absence of divestment gain.

The fall in DPU from 1.88 cents last year was due to an enlarged issued unit base caused mainly by the implementation of its distribution reinvestment plan.

Gross revenue for the three months ended Sept 30 jumped 7.3 per cent to $87.5 million.

Net property income grew 6.3 per cent to $73 million.

This was mainly due to contributions from acquisitions and organic growth from the existing portfolio, said the Reit manager in an exchange filing.

However, the recent conversions of single-user assets to multi-tenanted buildings in Singapore, resulting in lower occupancy, have continued to drag down earnings.

"We continue to focus on asset and lease management, actively engaging tenants for forward

renewals in view of the upcoming single-user assets to multi-tenanted buildings conversions in our portfolio as well as the economic slowdown," Ms Ng Kiat, chief executive of the Reit manager, said in a statement.

"To date, we have renewed the bulk of the leases, which are due for expiry this year, leaving a balance of about 5 per cent of leases, by net lettable area, to be renewed in subsequent quarters."

Portfolio occupancy rate rose to 96.9 per cent, a slight improvement from 96.6 per cent in the previous quarter, partly due to higher occupancies at several properties that were converted to multi-tenanted buildings last year.

Although leasing activities have remained stable, customers continue to be cautious, given the current subdued business environment due to a slowing China and growing uncertainties in other emerging markets, said the Reit manager.

Its portfolio is valued at $4.98 billion, with 119 properties in Singapore, Japan, Hong Kong, Malaysia, China, South Korea, Australia and Vietnam.

MLT closed 0.5 cents higher at $1.035 on Monday.