Mapletree Industrial Trust

Mapletree Industrial Trust: Announced 2QFY14 results which were at the high end of estimates. DPU of 2.47cts (+2.0% y/y, +8.0% q/q), boosted by lower than expected operating costs which are non-recurring in nature. Revenue and NPI rose 7.6% and 11.6% YoY respectively, driven by positive reversions and higher occupancies in Flatted Factories and Stack-up/Ramp-up buildings Overall, passing rents rose 7%YoY to $1.70 but dipped slightly from $1.71 in 1Q. Operational trends remain firm, rental reversions continue to rise. Portfolio occupancy fell slightly q/q to 93.9% (vs. 95.5%), on the back of a decline in Business Park Buildings following the departure of a financial services tenant. Overall balance sheet remains firm; with net gearing increasing to 36.2% as of 2Q, due to draw downs for development projects. Funding costs declined slightly to 2.3%, with 81% of total debt hedged. While the domestic acquisition environment remains challenging, offshore opportunities could provide a pipeline for growth from year end. At current price, MIT trades at 6.8% yield and 1.2x P/B, versus industrial REITS average of 7.3% and 1.1x P/B. Ratings as follows: CIMB maintains Neutral with $1.48 TP Deutsche maintains Buy with $1.54 TP