Industrial S-Reits report NPI growth, but managers are cautious on outlook
SINGAPORE real estate investment trusts (S-Reits) with exposure to the industrial sub-segment have mostly reported growth in net property income (NPI) in the quarter ended March.
The resilient operating performance comes as industrial S-Reits report stable occupancies and positive rental reversions in the most recent quarter. However, the Reit managers are more cautious on the outlook – with greater emphasis on tenant retention and cost management – given the challenging macroeconomic environment affected by global tariffs and trade uncertainty.
Of the seven S-Reits that focus on the industrial sub-sector, three reported full-year results in the latest earnings season, while the others provided updates on their first-quarter performance.
Mapletree Industrial Trust 's (MINT) distribution per unit (DPU) for FY25 ended March, rose 1 per cent to S$0.1357, on the back of higher gross revenue and NPI. The growth was driven by revenue contributions from the Osaka Data Centre and an acquisition in Tokyo, in addition to new leases and lease renewals of Singapore properties.
However, MINT's manager said that higher property operating expenses and elevated borrowing costs may continue to exert pressure on distributions. It will adopt cost-mitigating measures and focus on tenant retention to maintain a stable portfolio occupancy level.
Mapletree Logistics Trust (MLT) reported stable operating performance with 96.2 per cent occupancy and 5.1 per cent positive rental reversions in its fourth quarter. However, NPI slipped 1.6 per cent amid lower revenue contributions from China, absence of contributions from divested properties and a weakening of regional currencies against the Singapore dollar.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
MLT's manager expects tenants to take a cautious approach to leasing and expansion amid global trade tensions, and its top priorities include ensuring tenant retention, portfolio resilience and cost management. It estimates that around 15 per cent of portfolio revenue comes from tenants that are engaged in export businesses.
Elsewhere, Aims Apac Reit also reported stable portfolio occupancy and 20 per cent positive rental reversions for FY25. DPU grew 2.6 per cent to S$0.096 for the full year.
The manager noted that the trust's healthy balance sheet with gearing of 28.9 per cent provides ample headroom to fund future growth initiatives and new acquisitions.
Similarly, ESR Reit posted S$82.5 million in NPI for Q1 2025, a 31.3 per cent increase on year, mainly due to full-quarter contributions from acquired properties, completion of asset enhancement initiatives (AEIs) and higher contributions from existing properties.
Distributable income (DI) increased 7 per cent on year to S$44.2 million in Q1 2025. The manager expects NPI and DI to increase in FY25, given full-year contributions from completed acquisitions and AEIs, and positive rental reversions.
Sabana Industrial Reit reported 15.3 per cent positive rental reversion in Q1, continuing on four successive years of double-digit positive rental reversion. NPI rose 22 per cent to S$16 million, led by higher gross revenue. The Reit's manager noted that performance is expected to be challenged by disruptions in global trade and significant cost pressures from the potential imposition of US tariffs, and it remains focused on optimising portfolio occupancy.
Daiwa House Logistics Trust (DHLT) reported a 2.7 per cent increase in NPI for its overall portfolio in Singapore dollar terms during Q1, mainly due to the acquisition of D Project Tan Duc 2, partially offset by weaker Japanese yen and lower contribution from Japan.
DHLT's manager noted that trade tariffs have resulted in economic uncertainty globally, and it is monitoring the potential impact. Less than 10 per cent of DHLT's Japan tenants by gross rental income are involved in exporting of goods, while the property in Vietnam is anchored on a long 20-year lease that expires in 2043.
Phillip Securities analysts noted last month that S-Reits in the industrial sub-sector may face a medium impact from higher tariffs, as manufacturing may decline, especially for tenants with cross-border activities. However, they added that reshoring or near shoring could boost local industrial demand.
The analysts remain overweight on S-Reits as the sector is relatively resilient in a downturn, given that tenants are contractually required to pay rent. They noted that the sector could start benefiting from interest rate savings in 2025 and 2026. SGX RESEARCH
The writer is a research analyst at SGX. For more research and information on Singapore's Reit sector, visit sgx.com/research-education/sectors for the monthly S-Reits & Property Trusts Chartbook.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
an hour ago
- Business Times
Vietnam's exports and FDI pledges continue on robust growth track in May
[HO CHI MINH CITY] Vietnam's trade and foreign direct investment (FDI) continued to chart strong growth in May, driven by front-loading demand following the temporary suspension of 'Liberation Day' tariffs from the US, Vietnam's largest export market. Estimates from the government's statistics agency (NSO) on Friday (June 6) showed that exports rose by 17 per cent year on year to US$39.6 billion, down slightly from the on-year 19.8 per cent rate for April. Imports rose year on year by 14.1 per cent to US$39.04 billion, also by less than April 22.9 per cent rise on year. On a monthly basis, exports and imports grew by 5.7 per cent and 5.9 per cent, respectively. The electronics sector led exports, with a 5.2 per cent monthly increase and a 52.4 per cent year-on-year rise to US$9.2 billion. In contrast, footwear and textiles – key exports to the US – grew more modestly, by 1.9 per cent and 9.2 per cent, respectively, down from double-digit figures in April. For the January-to-May period, Vietnam recorded a trade surplus of US$4.67 billion, narrowing from US$8.71 billion in the same period of 2024, when exports and imports rose by 14 per cent and 17.4 per cent, respectively. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up Analysts expect front-loading to persist through the second quarter of 2025, with the momentum likely to ease once the US' 90-day tariff suspension expires in early July. Vietnam's industrial production remained healthy, with a 9.4 per cent year-on-year increase in May, though it eased slightly from a 9.6 per cent growth in April. Despite marking the fourth consecutive month of expansion, it was the softest gain since a contraction in January. Soft data also indicated a contraction in factory activity. The S&P Global Vietnam Purchasing Managers' Index (PMI) for May recorded its second consecutive month below the 50 threshold, reflecting a slowdown driven by declining new orders amid reduced foreign demand linked to US tariff uncertainties. Adam Ahmad Samdin, economist at Oxford Economics, also highlighted increasing downside risks to the think tank's 6.3 per cent year-on-year GDP growth forecast for the country this year. 'The authorities may not be able to come to a deal with the US due to Vietnam's inherent reliance on Chinese inputs, potentially bringing tariffs back to 46 per cent,' he said. Reliance on Chinese input In April, President Donald Trump imposed a 46 per cent 'reciprocal' tariff on Vietnam, among the highest among US trading partners. These import taxes have been temporarily reduced to 10 per cent, with a Jul 9 deadline to reach a trade deal. Reuters reported this week that Washington has sent Hanoi tough requests for tariff discussions, including demands that the South-east Asian country reduce its reliance on materials and components from China. US Secretary of Commerce Howard Lutnick said on Wednesday that there is still room for talks if Vietnam curtails imports from China and reduces its trade deficit with the US, which amounted to US$123 billion last year. However, driven by the front-loading surge in the first five months of this year, the South-east Asian country recorded a growing trade surplus with the US – US$49.9 billion, marking a 28.5 per cent year-on-year increase. Meanwhile, China continued to be the primary source of its imports, comprising 39.5 per cent of the total. This swelled Vietnam's trade deficit with China to US$45.9 billion, a 40.3 per cent increase from the year-ago period. Strong FDI from China and Singapore Realised FDI in Vietnam rose 7.9 per cent year on year to US$8.90 billion from January to May 2025, the highest in the same period in the past five years. FDI pledges hit US$18.39 billion, marking a 51.2 per cent surge from last year's figure. Singapore topped the investor list with over US$4.38 billion in registered FDI, accounting for 23.8 per cent of total foreign inflows; this was 30.1 per cent more than the year before. South Korea followed with more than US$2.93 billion, making up nearly 16 per cent of the total and marking a 2.47-time rise from the year before. In terms of new projects, mainland China remained the largest contributor, with 453 projects, up 30 per cent month on month and 2.5 times higher year on year. The value of these projects in the first five months was US$1.81 billion. Room to support growth In the domestic sector, Vietnam's retail sales advanced by 10.2 per cent year on year in May, easing from an almost two-year high of 11.1 per cent in the preceding month. Headline inflation rose by 3.2 per cent, up from 3.1 per cent in April, still below the 4.75 per cent cap imposed by the State Bank of Vietnam (SBV) . Samdin said: 'This should allow the SBV room for greater monetary easing later in the year, to achieve the ambitious 8 per cent growth target.' Meanwhile, economists at HSBC Global Research highlighted Vietnam's fiscal room to support growth, as the South-east Asian country has public debt-to-GDP ratio at around 40 per cent, the lowest in Asean. They also observed renewed commitment from the authorities to accelerating project implementation and ensuring timely completion, alongside a push to fast-track new transport and energy mega-projects. They wrote in a May 12 note: 'Vietnam is keen to continue with its old playbook of pushing for infrastructure development. (This is able to) kill two birds with one stone by supporting growth while improving infrastructure connectivity.'
Straits Times
13 hours ago
- Straits Times
US stocks slump as Tesla shares tank on Trump-Musk row
Traders working on the floor of the New York Stock Exchange, in New York City, on June 5. PHOTO: REUTERS US stocks slump as Tesla shares tank on Trump-Musk row WASHINGTON - Wall Street stocks tumbled on June 5 as a row between US President Donald Trump and Tesla boss Elon Musk erupted – with the electric vehicle firm's share price tumbling around 14 per cent. The Dow Jones Industrial Average slumped 0.3 per cent to 42,319.74 and the broad-based S&P 500 Index lost 0.5 per cent to 5,939.30. The tech-heavy Nasdaq Composite Index fell 0.8 per cent to 19,298.45. The relationship between Mr Trump and Mr Musk imploded in public view, with the US president expressing disappointment with his billionaire former aide's criticisms. Mr Musk, who had slammed the Republican president's proposed massive spending Bill, hit back in real time on social media. Tesla shares plunged by more than 14 per cent, losing over US$100 billion (S$130 billion) in market capitalisation, as Mr Trump said he had asked 'crazy' Mr Musk to leave his administration. He also threatened to take away the tech tycoon's government contracts. Mr Patrick O'Hare of said Tesla had weighed 'heavily on the broader market,' particularly the consumer discretionary sector. 'But all in all, the market itself is holding up reasonably well, given the scope of that decline,' he added. Investors also digested the outcome of a long-awaited phone call between Mr Trump and Chinese President Xi Jinping, looking for signs that both leaders could open doors to a longer-lasting truce in trade tensions. 'There were no new negative developments,' Mr O'Hare said, adding that markets appreciated the mutual approach of allowing more time to work things out. Looking ahead, investors will be eyeing official employment data due June 6, to gauge the health of the US economy as Mr Trump's tariffs ripple through various sectors. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
13 hours ago
- Business Times
US: Stocks slump as Tesla shares tank on Trump-Musk row
[WASHINGTON] Wall Street stocks tumbled on Thursday as a row between US President Donald Trump and Tesla boss Elon Musk erupted - with the electric vehicle firm's share price tumbling around 14 per cent. The Dow Jones Industrial Average slumped 0.3 per cent to 42,319.74 and the broad-based S&P 500 Index lost 0.5 per cent to 5,939.30. The tech-heavy Nasdaq Composite Index fell 0.8 per cent to 19,298.45. The relationship between Trump and Musk imploded in public view, with the US president expressing disappointment with his billionaire former aide's criticisms. Musk, who had slammed the Republican president's proposed massive spending bill, hit back in real time on social media. Tesla shares plunged by more than 14 per cent, losing over US$100 billion in market capitalization, as Trump said he had asked 'crazy' Musk to leave his administration. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up He also threatened to take away the tech tycoon's government contracts. Patrick O'Hare of said Tesla had weighed 'heavily on the broader market,' particularly the consumer discretionary sector. 'But all in all, the market itself is holding up reasonably well, given the scope of that decline,' he added. Investors also digested the outcome of a long-awaited phone call between Trump and Chinese President Xi Jinping, looking for signs that both leaders could open doors to a longer-lasting truce in trade tensions. 'There were no new negative developments,' O'Hare said, adding that markets appreciated the mutual approach of allowing more time to work things out. Looking ahead, investors will be eyeing official employment data due on Friday, to gauge the health of the US economy as Trump's tariffs ripple through various sectors. AFP
