Mapletree Industrial Trust

For Q2 FY25/26, MIT said net property income declined year on year due to lost income from the divestment of three Singapore industrial properties, weaker North American contributions from lease nonrenewals and U.S. dollar weakness, and higher JV borrowing costs; these were partly offset by contributions from recent acquisitions and completed fit-out works. Distribution to unitholders decreased 5.3% to $90.7 million, and DPU increased 5.6% to $0.0318. On a quarter-on-quarter basis, distribution to unitholders fell 2.7% to $90.7 million and DPU fell 2.8% to $0.0318. Total borrowings were reduced to $3.1 billion, aggregate leverage fell to 37.3%, and the interest rate hedge ratio increased to close to 93%; average borrowing cost was 3%. Management guided FY25/26 borrowing cost at around 3.1% to 3.2%, and FY26/27 at 3.3% to 3.4%.

Lily Ler emphasized operational resilience in Singapore and ongoing leasing traction in North America, saying occupancy was “relatively flattish” at 91.3% and that committed occupancy at Kallang Way improved to 64.4%. She pointed to forward renewals already signed for FY26/27, continued positive Singapore rental reversions, and said the portfolio remains in a transition phase as MIT recycles capital from divestments into future growth. Her tone was constructive but measured, with repeated focus on defending occupancy, backfilling vacancies, and staying flexible on acquisitions and divestments.

Khoo Geng Foong focused on the financial drivers: lower NPI from the Singapore industrial divestments, lower North American income, and lower JV distribution were partly offset by debt repayment and lower interest on unhedged floating loans. She said total borrowings fell to $3.1 billion, leverage to 37.3%, average borrowing cost to 3%, and the hedge ratio to close to 93%, though it should normalize closer to 80% by year-end as IRS mature. She also gave specific rate guidance: FY25/26 borrowing cost of about 3.1% to 3.2% and FY26/27 at 3.3% to 3.4%, with about $600 million of IRS due each year affecting costs.

Analysts focused on U.S. data center backfilling, lease expiries in FY26/27, divestment plans, funding, and the FX/interest-rate outlook. Management said 250 Williams is seeing some office-space backfill interest, AT&T is still being discussed with no clarity on any 5-month extension, and San Jose’s power study showed current capacity up to 7 MW with 20 MW possible only with significant extra capex and time. On acquisitions and divestments, MIT said it is pursuing a mixed approach to North American sales, targeting $500 million to $600 million over 1-2 years, and is open to equity fundraising depending on asset size and market conditions. On the sponsor’s 50% data center stake, management said it is about SGD 1 billion in valuation, has about 60% hyperscaler exposure, and occupancy is generally above 90% and near market.