Know Your REITs Series: Mapletree Industrial Trust (MIT) vs Mapletree Logistics Trust (MLT) (Part 1)

by: Dean Goh for ProButterfly.comTM

All examples and stocks quoted here in this article and on the ProButterflyTM and REITScreenerTM site are for learning purposes; it does NOT constitute financial advice or a Buy/Sell recommendation. Contents are reflective of personal views and readers are responsible for their own investments and are advised to perform their own independent due diligence and take into account their own financial situation. If in any doubt about the investment action you should take, you should consult a professional certified financial adviser.

Mega real estate developers like Mapletree Investments and CapitaLand Limited own a gamut of properties worldwide. As a result, there are many SGX-listed REITs whose stock names contain the Mapletree or CapitaLand brand names.

This could be confusing for investors, who find it tough distinguishing such REITs. This is even more so when 2 different REITs with the same developers operate in the same industry (e.g. Mapletree North Asia Commercial Trust and Mapletree Commercial Trust).

Hence, in this series “Know Your REITs”, ProButterfly will shed some light on the differences between some similarly named REITs. In the first part of this series, we take a look at the two Mapletree-branded Industrial REITs - Mapletree Industrial Trust (“MIT”) and Mapletree Logistics Trust (“MLT”).

In Part 2 of MIT vs MLT, we take a look at the latest financial performances of MIT and MLT.

Here is Part 1 of MIT vs MLT, we take a look at the differences in the properties owned by these 2 REITs and the implications following the different set of properties they own:

Property Portfolio


MIT’s portfolio of properties spans 5 industrial property types, while MLT solely operates the Logistics industrial property type. The table below shows the breakdown of the different industrial properties found owned by MIT and MLT:

Fig. 1: Breakdown in property type of MIT and MLT (as at 31 December 2018)

Source: MIT’s 3Q FY18/19 quarterly reportMLT’s 3Q FY18/19 quarterly report

The different industrial property types are hardly understood by the common man so here are some brief descriptions of them:

  • Hi-Tech Buildings - mainly catered to tenants in technology and knowledge-intensive sectors. Most of MIT’s Hi-Tech buildings are occupied by anchor tenants like MNCs involved in light industrial activities like precision engineering and data centre operations.
  • Business Park Buildings - High-rise multi-tenanted buildings which serve as regional headquarters for MNCs and spaces for R&D and knowledge-intensive enterprises.
  • Stack-up/Ramp-up Buildings - As the name suggests, stack-up buildings are standard factories “stacked” on top of each other with its own loading and parking area.
  • Flatted Factories - Usually high-rise multi-tenanted buildings with common facilities such as passenger and cargo lifts, loading/unloading bays and car parks.
  • Light Industrials - mainly medium to high rise properties which house mostly light manufacturing activities rather than office content.
  • Logistics - mostly warehouses and distribution centres. Warehouses are used for storing products while Distribution centres redistributes the products from the supplier to its retailers or wholesalers or directly to consumers.


Around 90% of MIT’s portfolio of properties (by asset value) are located in Singapore. The rest are located in the USA.

On the other hand, MLT’s portfolio of properties is more geographically diverse. While a majority of MLT’s properties (by asset value) are located in Singapore, MLT’s properties can also be found quite significantly in Hong Kong and Japan.

So Heaven is fair - where MLT lacks in diversity in their industrial properties, it is made up for with the geographic diversification of its properties!

Fig. 2: Portfolio by geography of MIT and MLT (as at 31 December 2018)

Source: MIT’s 3Q FY18/19 quarterly reportMLT’s 3Q FY18/19 quarterly report

*Only the top 5 countries where MLT has the largest property asset value in were listed in the table.


Let’s take a quick look at the tenant profiles and trade sectors occupying the properties of MIT and MLT.

Fig. 3: Tenant Mix of MIT and MLT (as of 31 Dec 2018)

Source: MIT’s 3Q FY18/19 quarterly reportMLT’s 3Q FY18/19 quarterly report

From the above tenant base statistics, MIT seems to have a more diversified tenant base than MLT. This is only natural as MIT operates across a wider range of activities in the supply chain that can fit the varying operations of companies from different industries.

But quantity does not equate to quality. So while MIT has a diversified tenant base, can its tenants pay their rental income on time or do they default on their payments?

Since we can’t scrutinize every tenant of MIT, let’s just take a look at their largest tenants. MIT’s largest tenants belong to huge MNCs like HP, AT & T, Equinix, Dell, et cetera. These are huge MNCs who don’t look like going bust anytime soon. It would have been a different picture for MIT if its largest tenants were SMEs!

Fig. 4: Tenant Profile of MIT’s largest tenants

Source: MIT’s 3Q FY18/19 quarterly report

MLT’s largest tenants are made up of comparatively smaller companies like CWT and Coles Group. They operate across various industries and are mostly end users so they sign longer leases than 3rd party logistics providers.

Fig. 5: Tenant Profile of MLT’s largest tenants

Source: MLT’s 3Q FY18/19 quarterly report

Which industries?

Almost 40% of MIT’s gross rental income comes from the manufacturing trade sector - of which 55% is made up by the Precision Engineering, Machinery and Transportation Products trade sector.

Wholesale and Retail Trade make up another 20% of MIT’s gross rental income. This trade sector mainly covers the business-to-business trading of goods such as agricultural materials, machinery and merchandise.

Other significant trade sectors include Information and Communications (19%); and Financial and Business Services (12%)

Fig. 6: Trade Sectors operating in MIT

Source: MIT’s 3Q FY18/19 quarterly report

Thus, the breadth of industrial properties owned by MIT allows it to conduct a diverse range of industrial and office activities in its properties worldwide.

However, as MLT operates only Logistics industrial properties comprising Distribution Centres and Warehouses, the range of activities conducted in MLT’s properties is much more limited.

The top 3 trade sectors (by gross revenue) operating in MLT’s properties are in F&B (20%), Consumer Durables (12%) and Electronics & IT (11%). The “Others” component of MLT’s tenant contribute to 15% of MLT’s gross revenue.

Fig. 7: Trade Sectors operating in MLT
Source: MLT’s 3Q FY18/19 quarterly report

So what does all these data mean for MIT and MLT?

1. Trend of Rental Rates of Industrial properties

Singapore Industrial property market

The main source of a REIT’s revenue is the rental income it receives. Thus, it is a good sign if the REIT’s properties can command higher rental rates. Not all industrial properties command the same rental rate industry-wide.

As mentioned above, Business Parks and Hi Specs Buildings operate more knowledge and capital intensive activities while factories and Logistics space cater mostly for storage facilities or are involved mainly in the production of consumer goods

Hence, Business Parks and Hi-Specs Buildings require more sophisticated infrastructure to support their higher value added activities. This also means that the they command higher rental rates than factories and warehouses.

The table below shows the trend of average industrial rents commanded by various types of industrial spaces in Singapore.

Fig. 8: Average Industrial Rents in Singapore
Source: ESR REIT Presentation Slides FY 4Q 2018

The rental rates of warehouses and factory spaces have been falling since at least 1Q 2013 till 3Q 2018. This came about as the supply of industrial space in the Singapore property market outstripped demand for it.

Curiously, the rental rates of Business Parks and Hi-Specs Industrials hardly fell and remained stable. These positive trends in rental rates of Business Parks and Hi-Specs Industrials are expected to continue.

2018 is the year where full-year net new demand for Industrial leases outpaced net new supply for the first time since 2011. Business Parks and Hi-Specs Industrials are expected to reap the most benefits from this encouraging trend in the industrial property market.

Fig. 9: All industrial new supply, demand and occupancy rate in Singapore

Source: Colliers International

The table below shows the year-on-year (y-o-y) increase in monthly rental rates for Business Parks and Hi-Specs, while the y-o-y decrease in monthly rental rates for factories and warehouses.

Fig. 10: Average monthly rent by different types of industrial types
Source: Colliers International

This could be due to the rising demand of tenants for newly completed and refurbished buildings with better specifications and good locations. Business Parks and Hi-Specs are also more limited in supply.

Further, with higher office content in their properties, Business Parks and Hi-Specs can also benefit from the spillover effect from a strong office rent recovery in 2018 and further office rental upside in 2019.

Rental rates for factories and Logistics properties are expected to be under more pressure, though Logistics rents is expected to recover 1-2% towards the end of 2019.

Hence, with Business Parks and Hi-Specs making up 52% of MIT’s Industrial properties (by asset value), MIT is expected to benefit from the increase in rental rates in upcoming years.

Compared to MIT, MLT is expected to be more sluggish in this aspect since it owns solely Logistics properties.

Hong Kong Industrial Property Market

But remember, Hong Kong (HK) logistics properties also take up a rather significant stake (30%) in MLT’s gross rental income. The Q4 2018 study published by Colliers on Hong Kong’s industrial property market revealed that industrial leasing in HK remains strong despite decelerating external trade figures.

In fact, warehouse rents in HK rose 1.3% quarter-on-quarter (q-o-q) and 7.4% y-o-y. This was due to the growth of e-commerce in HK and the increase in sales of Fast Moving Consumer Goods, leading to the increased demand for industrial space. Unlike Singapore, supply of industrial spaces in HK remained tight too.

Hence, the downturn in Logistics rental rates in Singapore will be softened by the uptick in Logistics rental rates in HK for MLT.

This is why geographic diversification is important. Different economies behave and perform differently from one another (though it would be naive to conclude they are independent of one another in this globalised world). MLT’s properties spread across the world and this means its performance is not reliant on one single economy.

2. Performance of the Sub-Sectors MIT and MLT Operate In

Singapore’s manufacturing PMI, an indicator of manufacturing activity, has been on a downward trend since 2018. This was partly attributed to external factors like US-Sino trade tensions and the fading technology boom that have weighed down manufacturing and trade activities in key Asian economies like Singapore’s.

Precision engineering declined by 15.7% y-o-y while the machinery and systems segment fell by 20.8% y-o-y Printing fell by 11.5% y-o-y. This is negative news to MIT, whose rental income comes mainly from tenants carrying out such activities.

So, will this downward trend in manufacturing activity persist? Quoting Maybank economist Lee Ju Ye, “2019 will be a year of two halves. We are pencilling a brief manufacturing downturn in the first half, including a negative first quarter. The second half may see some rebound in manufacturing after a trade deal."

For MLT, sentiments are more positive due to the growing e-commerce market in Singapore and HK. A study by Google and Temasek predicts that Singapore’s e-commerce market could grow by more than 5 times from 2015 to 2025. This increasing expansion of online shopping would inevitably see the increased demand for warehouse space.

For MLT to ride on this trend towards e-commerce, its ability to source for modern warehouses is important. Are these warehouses organised to permit new technologies to be optimised? What about meeting local usage regulations and being strategically located to different suppliers?


MIT’s ownership of a wide range of industrial properties is a plus point, especially with a huge proportion of it coming from Business Parks and Hi-Specs. These 2 types of Industrial properties are poised to benefit from the Singapore government’s push towards “Industry 4.0”, which seeks for technological advancements in Singapore’s manufacturing sector.

Yet, it lacks the geographic diversification MLT’s portfolio of properties offers. As a result, MIT suffers the full brunt of depressed rents of its factory space. MLT, on the other hand, has the HK economy to cushion the downward pressure in rents coming from Logistics properties in Singapore.

In anticipating how the different sub sectors of industrial properties of MIT and MLT will perform, we need to keep a close eye on the respective domestic economies these properties are located and be mindful of global trends like the e-commerce boom, technological changes and US-China trade tensions.

In the next part of this series, we delve deeper into the financials of MIT and MLT. The financial performances of the REITs are the best indicator in assessing how well MIT and MLT have performed.

And what better way to do so than to analyse their financial reports! Stay tuned!

Positioning to Ride the Recovery

Opportunities and Risk Post-COVID-19 Pandemic in the various S-REIT Sectors

The COVID-19 crisis has brought about an unprecedented economic shock to many sectors, and yet it has also generated opportunities in others.

The tech sector has been a major beneficiary and along with that, S-REITs exposed to the Data Centre sector such as Keppel DC REIT and Mapletree Industrial Trust gained phenomenally.

But are the investment opportunities in REITs now gone? Personally, we do not think so. There are still many REITs below their pre-COVID-19 levels poise to recover strongly in the coming quarters – and now it is the best time to prepare to capture the post-COVID recovery.

Join us as we discuss the opportunities and risk in the S-REIT space sector-by-sector as we try to uncover recovery opportunities for FY2021 and beyond. Real estate sectors that we will be covering include the Retail, Hospitality, Offices, Healthcare, Industrial and Data Centres.

Our speaker Tam Ging Wien will be sharing his knowledge and experience including:

  • Part 1: A Survey of the REITs Landscape Around The World
  • Part 2: Key Metrics in Identifying Strong REITs
  • Part 3: Real Estate Sector Review Amidst the COVID Crisis
  • Part 4: Screening for Opportunities
  • Part 5: Q&A

Some key highlights that will be covered includes:

  • Real estate sector-by-sector review on COVID-19 impact and recovery opportunities. Sectors covered include the Retail, Hospitality, Offices, Healthcare, Industrial and Data Centres.
  • Opinion on which sector will continue to stay resilient and which are poised to recover quickly post-pandemic
  • The right metric to use when screening for high quality REITs
  • Case studies of REITs which are considered high quality
  • Step-by-step demo of how to screen for high quality REITs on your own

During the sharing session, various Singapore-listed REIT examples will be used.

There will also be a Q&A so that members of the investing community may engage in open dialog and discussions in order to deepen their understanding of REITs. Do prepare your writing materials for note taking.

Please note that the duration of the on-site seminar is 7pm to 9:45pm Singapore Time (GMT +8).

The details of the event are as follows:

  • Seminar: Positioning To Ride The Recovery
  • Date: 5th May 2021 (Wed)
  • Time: 7:00pm to 9:45pm
  • Venue: RNN Conference Centre - Kyoto Training Room (Level 4), 137 Cecil Street, Cecil Building #04-01, Singapore 069537
  • Fees: S$10.00
  • Sign-up Link:

To learn more about REITs, we recommend the article: What are REITs?


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