Thursday, October 23, 2014

Comparison of Industrial Reits Part 2

I will be comparing Mapletree and Ascendas Reit in this post.


Both are bigger reits with government-linked heritage.



Capital management

Both have prudent refinancing schedule stretch over more than 6 years. With the exception of FY19/20 (27%) for Mapletree, both have less than 20% of bank borrowing scheduled for refinancing for any one year.

Portfolio management 

Both reits managed positive rental renewal across all property segments. Average rental reversion is 6.3% compared to a year ago for ascendas, but data not available for Mapletree. As for new leases, light industrial new leases rate is 21% lower than 1 year ago for ascendas. Again, no data available for comparion with Mapletree.

In terms of occupancy rates, Ascendas did better in Business Park Segment and Hi Tech/ Hi Spec industrial segment, but lost out to Mapletree in light industrial segment.

In terms of lease expiry, Ascendas has better profile, with  maximum of 20.3% of NPI due for renewal at 2016/7, whereas for the next 3 years, Mapletree has 20.3%, 23.8%, and 27.9% of NPI due for renewal.

Growth management

Ascendas's Aperia is only completed in 15 August, and it is only 49.6% committed, with 15% under negotiation, and has yet taken physical possession.

DBS phase 2 of 7081 sqm already committed.

That will be 51071 sqm of space, 1.7% of Ascendas's GFA

Maple tree has 2 BTS projected that are 100% committed and will 772200 sft of space, 7.2% of Mapletree's GFA.


In conclusion:

Both are prudent in their capital management and while Mapletree face more risk in terms of renewal of lease expiry, exodus of tenants is highly unlikely. Mapletree also has better growth visibility, and offer better yield.

Hmm... ...




12 comments:

  1. Let me help you finish off after "hmmm"

    Buy more of both when there is correction haha,

    ReplyDelete
    Replies
    1. Hmm...

      Solace, I sniper lei, I do not have an AK71 machine gun... LOL!!!!

      if I spray at multiple industrial reits, I will have over concentration on both reits and industrial...

      Years later maybe....

      Hmm... mine not even sniper, just a revolver, no spare rounds...

      I think at the rate AK is going, he will bring out artillery fire when market goes bear to slay the bear...LOL

      you??? What weapon you using?

      Delete
    2. Me?

      I only have 5.56mm rounds for now. lol

      Been trying hard to upgrade to 7.62mm caliber round for GPMG by implementing " Good Fiscal and financial policy" in my daily life.

      Maybe, a magic number can appears in my dreams that allows me to strike lottery. Then i will have artillery rounds like AK.

      Yah, dream on! LOL

      Delete
    3. Solace, when u make it to GPMG, you will be very successful now.

      GPMG =

      Great Potential in Making of Giant

      I use revolver, and sometimes it will IA. Or fire blanks.

      I am going on financial diet too.

      Delete
  2. I agree with Solace. It doesn't have to be Either...Or. Why not invest in both stocks, if you think both companies' quality is good? :)

    ReplyDelete
    Replies
    1. S-reit investor,

      as I tell solace, I use revolver, I do not have heavy ammunition or weapon system...

      Maybe I can blog about your favourite weapon...

      What is your weapon and what is in your cross-hair now?? Or it is season closed for you? Waiting for open season after Fed raise interest rate??

      Delete
    2. i mean blog about favorite weapon

      Delete
  3. Mapletree Industrial do not have warehouse in their portfolio as warehouse fall under Mapletree logistic.
    IMO, Industrial REITs main disadvantage is the short term lease of land. So is important to know who their boss is, :)
    Ascendas is under Ascendas group, which is under JTC
    Mapletree is under Mapltree group, which is under Temasek Holding

    ReplyDelete
    Replies
    1. Yup yup,

      Big sponsor with high stake ensure they can mop up rights issue when there is a crisis, get the vehicle intact.

      They also have a stronger pipeline and hence the renewal of assets which is particular important to industrial reit with shorter leases, as you pointed out, become even more important.

      The smaller reits used to command much higher yield in excess of 8.5%, but have since narrowed, and hence the attractiveness is lowered too.

      I have not study Viva, I know it used to have very high yield due to some financial engineering, not sure about it now...

      Delete
  4. Have you on the look-out on AIMSAMP?....although it is part business trust part reit, but it had been resilience with Oct bear.

    ReplyDelete
    Replies
    1. Hmm ... I never look at that, had enough of industrial reits, but think management has been competent and rewarding for early investors

      On my right, there is a ASSI blog, he hold quite a bit of Aimsamp, go to his blog and search.

      Delete
    2. lol.....me too holding AIMSAMP!

      Delete