2 major tenants to vacate MINT's The Signature building

Its factory assets will be on the rescue.

According to CIMB, major tenants Lucas Films and Credit Suisse are departing from Mapletree Industrial Trust's (MINT) The Signature building.

However, CIMB noted that its portfolio remains healthy pending the departure of these tenants at The Signature. Portfolio occupancy was at 95.4% (3Q: 95.2%), while rental reversions appeared stronger: flatted factories (+30%), business parks (+13%) and stack-up/ ramp-ups (+36%).

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This year, all eyes will be on The Signature, from which major tenants such as Credit Suisse and Lucas Films are departing. While there has been no formal lease take-ups, management is in advanced negotiations with several prospects.

We expect positive rental reversions on MINT’s flatted factory assets and asset enhancements to mitigate vacancy with its departing business-park tenants.

4QFY13 DPU was up 7% yoy, thanks to higher rents on a six-month lease extension by Credit Suisse at The Signature and positive rental reversions, offset partially by higher maintenance operating expense within its flatted factories. 

Asset leverage has been lowered to 35%, thanks to revaluation gains of 5% on the back of higher NPI and occupancy as cap rates remained stable. This should leave it sufficient debt headroom to fund its past AEIs and recently-announced data-centre BTS development.