MIT

MIT: 2QFY16 results above estimates, with DPU up 7.3% to 2.79¢ on distributable income of $48.9m (+7.7%).

Gross revenue and NPI advanced 6.2% and 8.6% respectively to $82.7m and $61.0m, due mainly to the contribution from the build-to-suit project for Equinix Singapore, as well as higher occupancies and higher rental rates achieved, while property expenses remained flat.

Average portfolio passing rent increased to $1.88 psf/month from $1.86 in the preceding quarter, mainly due to new leases secured in the Hi-Tech Buildings and Business Park Buildings segments which raised the overall portfolio occupancy and passing rental rat.

Going forward, MIT will embark on its next AEI to optimise the use of available GFA at the Kallang Basin 4 Cluster through the development of a new high-specification industrial building, while improving the existing buildings in the cluster. The AEI is slated for completion in 4Q17 and is expected to be DPU accretive.

Aggregate leverage stood at 29.7% with average debt cost of 2.3% and tenor of 3.8 years. Portfolio occupancy inched up 0.3% q/q to 93.8%.

Going forward, Colliers International expects rents for prime multi-user conventional industrial space to ease further in 4Q15, while business park rents could experience a slight dip. However, rents of independent high-specs industrial premises could remain stable for the rest of the year on the back of limited supply.

At the current price, MIT trades at an annualized 7.4% yield and 1.14x P/B.