I’m Buying Mapletree Industrial Trust, Here’s Why? (SGX:ME8U)
Last Updated on 4 weeks ago by Antony C.
Mapletree Industrial Trust (MIT) is listed in SGX with the ticker symbol ME8U.SI, it is currently has a share price of SGD$1.910. It is a highly popular REIT where Singapore investors love.
At this price, MIT is valued at a price-to-book ratio of 1.050 and a trailing distribution yield of 7.10%.
With the current valuation, would I invest in it?
Let’s go through it using my 7 steps REITS dividend investing assessment and see if it is a dividend stock that is worth considering.
- Portfolio Occupancy Performance
- Diversified Tenant Base
- Dividend Yield
- Gearing Ratio or Aggregate Leverage Ratio
- Weighted Average Lease Expiry (WALE)
- Return of Equity (ROE)
- Price-to-Book Ratio
…and extra step, MOAT assessment.
Disclaimer: I may or may not have invest in any of the stocks/REITs/ETFs, what’s listed here is only for entertainment purpose only and it should never be used as any form of investment advice. Past performance ≠ future results. While I’ve been investing for +15 years, I am still learning, this is my stock investment diary, and I wish to share what I learn during my investment journey so you may learn from both my success and mistakes. Enjoy!
Business Background
Mapletree Industrial Trust (MIT) is a Singapore real estate investment trust (“REIT”) managed by Mapletree Industrial Trust Management Ltd. and sponsored by Mapletree Investments Pte Ltd.
Its principal investment strategy is to invest in a diversified portfolio of income-producing real estate used primarily for industrial purposes in Singapore and income-producing real estate used primarily as data centres worldwide beyond Singapore, as well as real estate-related assets.
Key Information
S$9.1 Billion
AUM
141
Properties Globally
91.6%
Occupancy Rate
Property Segments
1. Portfolio Occupancy Performance
Check for: More than 90% Occupancy Rate
Looking at the latest financial report. Mapletree Industrial Trust (MIT) is currently at 91.6% for overall occupancy across the all the regions.
- Singapore: 92.9% occupancy rate
- North America: 88.2% occupancy rate
- Japan: 100% occupancy rate
Looking at the occupancy rate, I am really happy with what it is standing right now, as it have an overall occupancy rate of more than 90%.
While there is a slight decrease when compare to the previous quarter, the difference is not significant of less than 1%.
My Opinion: Pass
2. Diversified Tenant Base
Check for: No tenant is more than 10% of gross rental income
Time to time, tenant leave or may face financial difficulties that may impact the income of our REITs, thus ensuring that no tenant is more than 10% of gross rental income is important.
Having a large and diversified tenant based ensure that the REIT is stable and will not be too greatly impacted by any one of it’s tenant.
Looking at the latest financial report. Mapletree Industrial Trust (MIT) have the following numbers:
- Number of Tenants: over 2,000 tenants
- Largest Tenant: 6% of the gross rental income
- Top 10 Tenants: 29.5% of portfolio gross rental income
Looking at how diversified the list of tenant, I am really happy with it, and not having any 1 tenant that is over 10% of gross rental income is a great sign of a good REIT management team.
My Opinion: Pass
3. Dividend Yield
Check for: More than a 4.5% dividend yield
Researching the data with financial tools for SGX listed securities and stocks. Mapletree Industrial Trust (MIT) is offering:
- Dividend yield: 7.10%
- 5 year average dividend yield: 4.82%.
| Year | Dividend (TTM) SGD |
|---|---|
| 2025 (ongoing) | 0.068 |
| 2024 | 0.135 |
| 2023 | 0.134 |
| 2022 | 0.138 |
| 2021 | 0.134 |
| 2020 | 0.122 |
| 2019 | 0.121 |
| 2018 | NA |
| 2017 | 0.086 |
| 2016 | 0.113 |
| 2015 | 0.108 |
| 2014 | 0.101 |
Calculating the dividend growth rate for 10 years, we can see that Mapletree Industrial Trust (MIT) is doing pretty well. For dividend investing, I’ll prefer if they will pay a stable dividend that is growing.
- 10 Years Dividend Yield Growth: 33.66% for the past 10 years.
Looking at the distribution history, the dividend payment is quite stable, and the main reason why it seems not growing between the year 2021 to 2023 is probably due to the pandemic.
My Opinion: Pass
4. Gearing Ratio or Aggregate Leverage Ratio
Check for: Gearing ratio of less than 45%
Gearing ratio or aggregate leverage ratio determines if the REIT is currently over-leverage. An over leverage REIT will not be able to buy more assets and grow their portfolio. This is one of the key metrics for a healthy balance sheet for REITs.
A quick check on the financials for Mapletree Industrial Trust (MIT) let’s take a look at it’s gearing ratio and weighted average tenor of debt.
- Gearing ratio: 39.8%
- Weighted average tenor of debt: 3.1 years.
Looking at the gearing ratio, I can see that it is pretty healthy, and with a low gearing ratio, it can have the option to grow it’s assets when opportunity comes in the future.
My Opinion: Pass
5. Weighted Average Lease Expiry (WALE)
Check for: Acceptable WALE of over 2.5 years
Weighted Average Lease Expiry (WALE) is the key metric if we want to look at REITs stability. Higher WALE means higher predictability of the future rental income of the REITs.
A quick check on the financials for Mapletree Industrial Trust (MIT) shows that it is showing a healthy WALE of 4.4 years.
Looking at the WALE, I can see that it is pretty healthy, while for Singapore is on the low side, the overall is pretty health which I am happy with it.
My Opinion: Pass
6. High Return Of Equity (ROE)
Check for: More than 5% ROE
Return on Equity (ROE) is often used to measure the management’s ability to make money. However, the ROE for REIT is generally low when compared with other stocks, as REITs are expected to be stable assets thus it’s ROE generally stays in the range of 2% to 5%.
Using the financial tool for SGX listed stocks, I got these values for Mapletree Industrial Trust (MIT):
- Current ROE: 6.41%
| Year | Return on Equity (ROE) |
|---|---|
| 2023 | 6.409% |
| 2022 | 2.083% |
| 2021 | 5.287% |
| 2020 | 9.392% |
| 2019 | 4.413% |
I really like it’s ROE and it meets my requirements of 5% for REITs stocks. There is even a year where it reaches 9% which is pretty amazing.
My Opinion: Pass
7. Price-To-Book Ratio
Check for: a P/B Ratio of less than 1.2
Price to book ratio helps to tell us if a stock is over prices. While it is not a good metrics to assess all stocks, it is a great way to give a brief insights for REITs and can play a good role in determining if the REIT is worthwhile.
However, it is good to note it should not be the key factor when deciding if the REIT is cheap or expensive.
Looking at the current P/B ratio for Mapletree Industrial Trust (MIT)
- Price to Book Ratio: 1.050
I think it is consider fairly valued.
My Opinion: Pass
Extra: MOAT Assessment
Check for: Not just having a MOAT, but a great MOAT
MOAT for a REIT is rather hard to determine, or rather, what we should look into is the industry that it is in and the geographical region where the REIT’s properties are located.
Mapletree Industrial Trust (MIT) have a strong history of sustainable growing returns for investors which is always a good sign of a great MOAT.
More importantly, it is the property sectors that it is currently serving. Mapletree Industrial Trust (MIT) is actively expanding their data centers which is key for a more digitalized world. The sectors it have it’s foot into are:
- Data Centres
- Flatted Factories
- High-Tech Building
- Stack-up/Ramp-Up Building
- Business Park Buildings
- Light Industrial Building
Mapletree Industrial Trust (MIT)‘s Top Competitors
- Ascendas REIT
- Keppel DC REIT
- CapitaLand Investment
In terms of MOAT, Mapletree Industrial Trust (MIT) has a strong ” Cost MOAT”.
As Mapletree Industrial Trust (MIT) have a massive backing and able to reduce it’s operation cost by it’s sheer volume. There is also a high switching costs if any of it’s tenant decided to stop renting which make it a good business.
In my opinion, Mapletree Industrial Trust (MIT)‘s MOAT is very strong.
My Opinion: Pass (Great!)
REITs Scorecard Verdict: Mapletree Industrial Trust (MIT)
Below is how I’ve scored Mapletree Industrial Trust (MIT).
| Metric | Weightage | Score |
|---|---|---|
| Portfolio Occupancy Performance | High (2) | 2 |
| Diversified Tenant Base | Low (1) | 1 |
| Dividend Yield | Low (1) | 1 |
| Gearing Ratio or Aggregate Leverage Ratio | Low (1) | 1 |
| Weighted Average Lease Expiry (WALE) | Low (1) | 1 |
| Return of Equity (ROE) | Low (1) | 1 |
| Acceptable Price-to-Book Ratio | Low (1) | 1 |
| Extra: MOAT | High (2) | 1 |
| Total Score | NA | 9 |
Overall Score: 9/10
Why do I find some metrics more important than others?
There are 3 attributes in a company that Warren Buffett wants in particular:
- Wonderful Company at Fair Price
- Stable & Understandable Business
- Vigilant Leadership in Risk Management
This translate to the following 3 metrics I have on my list:
- Price-to-Book Ratio
- Debt-To-Equity Ratio or Gearing Ratio for REITs
- MOAT
Thus, for these metrics, I will put a higher weightage on my scoring.
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Antony C. is a Singaporean dividend investor focused on building passive income through REITs, ETFs, and Dividend Stocks. With 15+ years of experience investing in Singapore, Hong Kong, and China markets, he founded IncomeBuddies.com to share practical wealth-building strategies tested in his own portfolio since 2008. His expertise has been featured in Yahoo Finance, Nasdaq, and NFAA, and he’s the published book author of "Start Small, Dream Big".