Mapletree Commercial Trust fiscal 2Q net property income rises 2.2 percent

Kopitiam food court in Singapore VivoCity Mall; taken September 2018.Kopitiam food court in Singapore VivoCity Mall; taken September 2018.

Mapletree Commercial Trust reported its fiscal second quarter net property income rose 2.2 percent on-year to S$86.26 million on higher contributions from VivoCity, Mapletree Business City I and Bank of America Merrill Lynch HarbourFront (MLHF).

Gross revenue rose 2.5 percent on-year in the quarter ended 30 September, the trust’s manager, Mapletree Commercial Trust Management (MCTM), said in a filing to SGX after the market close on Wednesday.

Revenue from VivoCity rose by S$1.4 million on-year in the quarter mainly on higher rental income from new and renewed leases along with asset enhancement initiatives on level one and basement one, and step-up rents in existing leases, it said. Revenue from MBC I rose by S$1.3 million on-year, mainly on step-up rents in existing leases, it said. Revenue from MLHF was S$300,000 higher on-year in the quarter mainly on full occupancy, it said.

Income available for distribution rose 1.3 percent on-year in the quarter to S$65.56 million, it said.

Property operating expenses increased 3.8 percent on-year in the quarter to S$23.66 million, it said.

The distribution per unit (DPU) increased 1.3 percent on-year in the quarter to 2.27 Singapore cents from 2.24 Singapore cents in the year-ago quarter, MCTM said. The DPU ex-date will be 30 October, while the payment date will be 29 November, it said.

For the fiscal first half, net property income rose 2.1 percent on-year to S$172.20 million, while gross revenue increased 1.6 percent on-year to S$218.45 million, MCTM said. The DPU for the fiscal first half rose 0.7 percent on-year to 4.50 Singapore cents from 4.47 Singapore cents in the year-ago period, it said.

Committed occupancy at VivoCity was at 99.9 percent as of 30 September, the filing said. Occupancy at its office/business park assets ranged from 97.8 percent commitment at MBC 1 and Mapletree Anson to full occupancy at MLHF, it said.

Outlook

In its outlook, Mapletree Commercial Trust’s manager pointed to CBRE data indicating the medium-term retail rental outlook remained positive. It also said the Singapore office market environment appeared “largely positive” amid strong overall leasing activity in the third quarter of the year.

But it added that the performance of the business park market was relatively subdued in the quarter.

“MCT’s portfolio is expected to remain resilient given VivoCity’s relatively stable performance and supported by the manageable lease expiries in MCT’s office/business park properties,” it said in the filing.

At VivoCity, FairPrice will replace hypermarket VivoMart, which has occupied space on two levels of the mall, by the fiscal first half of next year, it said.

““We are delighted that FairPrice, one of Singapore’s most established grocers, will enter VivoCity with a new integrated concept,” Sharon Kim, CEO of MCTM, said in the statement.

“Specifically designed to cater to the varied needs of our shoppers, the new concept is expected to further enhance VivoCity’s retail offerings. On top of that, we can look forward to financial upside from the positive rental uplift of the new lease, as well as the conversion of some recovered space into higher yielding specialty shops,” she added.

Lim said MCTM was “eagerly anticipating” the opening of the public library on level three by the second half of the year.

“Overall, the library fits well into VivoCity’s positioning that focuses on families with children. We are confident that the addition will encourage repeated visitorship and strengthen VivoCity’s attractiveness as a destination mall,” she said.

Mapletree Commercial Trust’s portfolio has five assets: VivoCity, MBC I, PSA Building, Mapletree Anson and MLHF.

 

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