Mapletree North Asia Commercial Trust posts fiscal 3Q net property income rose 13 percent

The Hewlett-Packard Japan Headquarters Building, in Tokyo, Japan, is part of Mapletree North Asia Commercial Trust's portfolio. Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust agreed in December 2021 to merge to form Mapletree Pan-Asia Commercial Trust. Credit: Mapletree North Asia Commercial TrustThe Hewlett-Packard Japan Headquarters Building, in Tokyo, Japan, is part of Mapletree North Asia Commercial Trust's portfolio. Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust agreed in December 2021 to merge to form Mapletree Pan-Asia Commercial Trust. Credit: Mapletree North Asia Commercial Trust

Mapletree North Asia Commercial Trust (MNACT) reported Thursday its fiscal third quarter net property income increased 13.1 percent on-year to S$85.57 million on the full quarter contribution from the acquisition of the Hewlett-Packard Japan Headquarters Building (HPB) and the absence of rental relief. 

The HPB property was acquired in June 2021

Gross revenue for the October-to-December period grew 11.8 percent on-year to S$112.58 million, the REIT said. 

Portfolio occupancy was at 97.5 percent at end-December, MNACT said.

For the first nine months of the fiscal year, MNACT reported net property income rose 14.9 percent on-year to S$247.45 million on gross revenue of S$328.02 million, up 12.8 percent on-year.

The full-year earnings growth was on lower rental relief of S$4.7 million granted to retail tenants at the Festival Walk property, compared with S$43.9 million a year earlier, and on the contribution from the HPB property, the trust said.

Festival Walk

At the Festival Walk property in Hong Kong, the mall has been adopting new initiatives to reposition itself, including shifting from apparel to lifestyle and family-related offerings, such as Twinkle Dance Co. and Jumpin Gym, said Cindy Chow, CEO of MNACT’s manager, adding the mall also held promotional events around the Christmas season.

“These initiatives, along with the government’s consumption voucher scheme and the completion of repair works at the mall, have led to an improvement in retail sales and footfall for YTD FY21/22. Full occupancy level was also achieved as at the end of December 2021,” Chow said.

Over the April-to-December period, Festival Walk posted footfall and tenants’ sales grew 27.7 percent and 20.9 percent on-year, respectively, amid an economic recovery in Hong Kong and from the government’s consumption voucher program to boost spending, MNACT said.

Outlook

In the outlook, Chow was cautious.

“The emergence of the Omicron variant and potentially other new variants may temper the recovery momentum of the various markets in which we operate. Nevertheless, we remain focused on safeguarding the long-term value for unitholders through proactive asset management, effective cost control and prudent capital management,” she said in the statement.

The trust noted the Christmas and New Year’s holidays, along with the consumption voucher program, boosted the Hong Kong retail sector, but Omicron’s emergence in Hong Kong at the beginning of January triggered short-term tightening measures to contain the virus’ spread. 

MNACT said the average renewal or re-let rental rates at Festival Walk mall are expected to be lower this year than last. 

Read more about MNACT’s financial results and about the proposed merger with Mapletree Commercial Trust.