Mapletree Industrial Trust to acquire 14 data centres for US$750 million in JV; DPU up 6% in Q2

The  Mapletree Industrial building.  Mapletree Industrial Trust will hold a 40 per cent interest under the joint venture while Mapletree Investments will hold 60 per cent.
The Mapletree Industrial building. Mapletree Industrial Trust will hold a 40 per cent interest under the joint venture while Mapletree Investments will hold 60 per cent.PHOTO: ST FILE

SINGAPORE - Mapletree Industrial Trust (MIT) has joined with Mapletree Investments to acquire 14 data centres in the United States for US$750 million (S$1.02 billion).

The data centres, to be acquired from Carter Validus Mission Critical Reit, sit on freehold land with a total net lettable area of about 2.3 million sq ft and a portfolio occupancy of 97.4 per cent.

The space is leased to 15 tenants from a diverse range of industries such as telecommunications, information technology and financial services, with an average lease to expiry (by gross rental income) of about 6.7 years, MIT said.

Under the joint venture agreement, MIT will hold a 40 per cent interest while Mapletree Investments will hold 60 per cent.

MIT expects to complete the acquisition in this quarter. At this point, contribution from data centres would increase from 6.7 per cent to 16 per cent of MIT's portfolio.

Also on Tuesday (Oct 24), MIT posted a distribution per unit (DPU) of 3 Singapore cents in the second quarter, up 6 per cent from 2.83 Singapore cents in the same period a year earlier.

Net property income in the three months to Sept 30 was S$70.7 million, up 11.1 per cent, driven by takings from the build-to-suit project for HP Singapore and pre-termination compensation of S$3.1 million from Johnson & Johnson. This was partially offset by a lower portfolio occupancy.

Distributable income rose 6.8 per cent to S$54 million.

Excluding the pre-termination compensation of S$3.1 million from Johnson & Johnson, DPU in the second quarter would have remained flat from a year ago, at 2.83 Singapore cents.

Earnings per unit was 3.01 Singapore cents, up from 2.76 Singapore cents in the second quarter last year. Net asset value per unit was S$1.41 as at Sept 30, unchanged from March 30.

Average occupancy fell from 92.6 per cent in the prior quarter to 90.4 per cent in the second quarter, partly due to the short time gap between the completion of the Phase Two of the build-to-suit project for HP Singapore and its lease commencement on Sept 1.

MIT's average passing rental rate fell 0.5 per cent from the prior quarter to S$1.94 psf per month.

Mr Tham Kuo Wei, chief executive of the MIT's manager, said: "The portfolio continues to face headwinds from the supply of competing industrial space and exit of tenants.

"Our focus will be on retaining tenants while we expect the contribution from development projects including the BTS development for HP to be the main growth driver for the Singapore portfolio."