Mapletree Industrial Trust struggling to fill Credit Suisse's abandoned spot at The Signature

Loss of key tenants poses a major threat.

Mapletree Industrial Trust's The Signature is shaken by the loss of its key tenants Credit Suisse and Lucasfilm. Barclays noted that the vacancy of this business park building remains high as it only managed to backfill 20% of the space these two tenants have vacated since 2QFY14.

Here's more from Barclays:

MINT reported strong DPU of 2.51cts for 4QFY14 (+6% y/y, +0% q/q), bringing FY14 DPU to 9.92cts (+7% y/y), 7% above our FY14E forecast of 9.29cts, and slightly above Bloomberg consensus of 9.8cts.

Key positives: 1) it is recovering well from the exit of a major tenant in 2Q, on strong 9-22% rent reversions across all segments; 2) tenant retention rate was up sharply to 81.8% from 66.3% a quarter ago; and 3) leasing interest jumped for its completed AEI at Toa Payoh North 1.

The key negative in our view remains the vacancy at its business park building, The Signature, which remains high as it managed to only backfill 20% of the space Credit Suisse and Lucasfilm have vacated since 2QFY14.

Tenant retention improved significantly to 81.8% from 66.3% a quarter ago and average gross monthly rent increased to S$1.75 psf/mth from S$1.73 psf/mth. Occupancydeclined marginally to 91.3% from 92.5% a quarter ago, mainly due to an increase in leasable area from the newly completed AEI Tao Payoh North 1 Cluster.

The trend of double-digit positive rent reversions moderated: +16% for Hi-Tech, +22% for Stack-Up/Ramp-Up, +16% for Flatted factories and +9% for Business Parks.

The S$108mn BTS development for Equinix is on track for completion in 2H 2014, while the AEI at Toa Payoh North 1 is completed with 67% of new space committed, a jump from the 25% precommitted a quarter ago.

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