Mapletree Industrial Trust

Good morning. Thanks for joining us this morning for MIT's second quarter and first half financial year 2024-2025 results briefing. MIT has released its second quarter and first half financial year 2024-2025 results yesterday evening. We have the management team to present the key highlights of the results. Ms. Le Lily, CEO, Ms. Khoo Geng Fong, CFO, Mr. Peter Tan, Head of Investment, Ms. Serene Tam, Head of Asset Management, and Ms. Chen Shokim, Head of Marketing.

So just to start off in terms of the key highlights, if you are flipping to these slides, you'll be looking at slide five. I think for this quarter, it has been, I would say, quite non-eventful business very much as usual. We do report a higher net property income. I think whether do you compare quarter on quarter or year on year, Osaka Data Center is a key contributor. I think for the final details, you will probably hear it from Ging Fong later. So I think in terms of DPU, we are quite happy to be able to deliver a 3.3 cents DPU. I think this, if you look at it on a year-on-year basis, is a 1.5% increase. Of course, on a quarter-on-quarter basis, I have highlighted last quarter. I think in terms of the MPI margin, etc., it's a little bit on the high side last quarter. So I think this quarter is a bit more but it also means that I think in terms of the DPU, we do see a slight decline. Operationally, oh yeah, and maybe it's also good for me to just highlight at this point that for this quarter, we have finalized the extension with AT&T. So I think the extension is for a 17-month period. I think in terms of rental, I reckon this would be a question that you all will ask, so I'll just address first. The rental rates, I would say, is lower close to what they have signed on initially. If you remember, this is the second extension. So the first extension was at the premium. I think in consideration of For all practical reasons, we think that just accepting the extension is a better move for us. I guess the other side of it, if we do not accept the extension or we hold for even higher rental rates, is the fact that you will have some downtime in trying to fill up the building. During this period, it is probably a zero-income type of situation. So I think the extension of AT&T is actually a good development for us. It gives us more breathing space for a good 17 months. But nonetheless, it's really kicking the can down the road and we will continue to work on marketing, exploring the various options that we can work with for San Diego. Going on to the operational performance, the average overall portfolio occupancy has actually increased I would say quite well from 91.9% to 92.2%, largely due to the Vanderbilt lease recommencing. But I think just like to remind that this Vanderbilt lease comes with a one-year rent-free. So at this point, we are still during the rent-free period, so there will be no DPU impact arising from this. Okay. The other point to highlight is the rental revision. We are happy to report that we have achieved a 10.7% across all property segments. This is something that we are quite happy to be able to achieve. But nonetheless, I think we also have to bear in mind that the rental revision, a large part of it comes about because we do have leases that were signed on during the COVID period. So those were at relatively lower rents. So I think going forward, we would expect that the rental revision rates to milk down a bit. So probably near the single mid-digit. The third point that we have here is really the acquisition of the property that we have recently announced in Tokyo. So we have just... completed it yesterday. In fact, it was like halfway through our board meeting that we actually completed. And the last point is really on the distribution reinvestment plan. We are quite thankful to these unit holders for taking up the option, for taking up the options to order elections to receive units. So we are able to retain about close to 17 million. So that actually helps to mitigate some of the effects towards our leverage. Okay, next I will pass on.

Okay, I'll go to the financial performance as well as the capital management update. Year-on-year comparing the second quarter, net property income increased by 4.6% to $134.5 million, largely due to contributions from the Osaka Data Centre which we acquired in September last year, as well as new and renewal leases across the various property clusters. These were partially offset by the non-renewal of leases from the North American portfolio and loss of income from the town hall divestments. We also incur higher property taxes, marketing costs, and higher property maintenance costs. On the borrowing costs, this increased by 3%, largely due to the higher borrowing costs in relation to the Osaka data center, partially offset by effects from the repayment of loans with the proceeds from town hall divestments. The distribution declared by the JV decreased due to higher borrowing costs from replacements of interest rate hedges. So overall, our DPU increased by 1.5% or 0.05 cents to 3.37 cents. Okay, quarter on quarter, our net property income increased due to higher revenue from the full quarter impact from the Vanderbilt lease. We also completed phase three of the Osaka Data Center in June and June 24, hence the higher revenue from Osaka Data Center for this quarter. This was partially offset by higher property taxes and property maintenance. Our borrowing costs increased due to higher interest costs from non-replacement of interest rate hedges upon expiry. Overall, our DP, Sorry, before that, let me clarify in terms of the NPI. Stripping out the rental amortization, our NPI is flat. Hence, if you look at the DPU, overall, it's a drop by 1.7% or 0.06 cents to 3.37 cents. Our NAV per unit decreased by 4 cents to 1.72 cents. mainly due to decline in the valuation of financial derivatives as well as weaker US dollar. Next. Our total debt decreased by 48 million to 3 billion, mainly due to lower net translated borrowings from a weaker US dollar. Our aggregate leverage ratio stands at 39.1% as of 30th September. Post completion of Tokyo acquisition, the aggregate leverage is about 40%. As Lily has mentioned, we retain 16.6 million of cash from the DRP which we have used to pay down loans. So as a gauge for every 10 million of cash retained, we will be able to reduce our gearing by 0.1%. So for this girl, we continue to apply DRP. In terms of debt maturity profile, it is well staggered with average debt duration of 3.4 years with no refinancing risk. So we have about 50 million of IRS due this quarter, which was not replaced, hence the lower hedge ratio to 80.4%. And our average hedge tenure reduced slightly to 3.4 years. Our average borrowing cost is at 3.2%. I think Lily will continue with the operational performance, right?