UPDATE: Mapletree NAC Trust posts fiscal 2H net property income rose around 5 percent

The Festival Walk property located in Hong Kong. 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 Festival Walk property located in Hong Kong. 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

This item was originally published on Tuesday, 19 April 2022 at 23:07 SGT; it has since been updated to include forecasts from Daiwa.

Mapletree North Asia Commercial Trust, or MNACT, reported Tuesday its fiscal second half net property income rose 5.1 percent on-year to S$160.06 million, in part on contributions from the Hewlett-Packard Japan Headquarters Building (HPB) and lower rent relief at Festival Walk. 

The result beat a forecast from Daiwa.

A stronger Chinese yuan against the Singapore dollar also helped to bolster earnings, the trust said in a filing to SGX.

“The increase was partially offset by lower average rental rates at Festival Walk mall and Gateway Plaza as well as lower average rates of the Hong Kong dollar and Japanese yen against the Singapore dollar,” MNACT said.

Rental reliefs for the six-month period were S$10 million, compared with S$14.9 million in the year-ago period, the filing said.

Gross revenue for the six months ended 31 March increased 4.9 percent on-year to S$211.24 million, MNACT said in a filing to SGX. 

The figures for net property income and gross revenue excluded contributions from The Pinnacle Gangnam, acquired on 30 October 2020, as the trust will share the profit after tax based on its 50 percent interest, the filing said. 

The distribution per unit (DPU) for the fiscal second half came in at 3.393 Singapore cents, up 2.8 percent from 3.299 Singapore cents in the year-ago period, the filing said. 

Daiwa had forecast MNACT would post fiscal second half net property income of S$152.9 million on revenue of S$186.9 million, with DPU of 3.01 Singapore cents.

“We have continued to maintain high occupancy levels across our properties through proactive leasing, and delivered on our strategy to diversify MNACT’s income streams through the acquisitions of HPB in Tokyo and The Pinnacle Gangnam in Seoul,” Cindy Chow, CEO of the REIT’s manager, said in the statement. The HPB property was acquired in June 2021

She noted the negative rental reversion rates at the Festival Walk property narrowed to negative 18 percent for the fiscal fourth quarter, from negative 32 percent for the first nine months of the fiscal year.

“With the easing of the restrictive measures to take effect from 21 April 2022 as announced by the authorities, we remain cautiously optimistic that as the impact of Covid-19 recedes, consumer sentiment would improve and our tenants could expect to see some return to normalcy in their businesses,” she said. 

For the full fiscal year, net property income increased 10.2 percent on-year to S$321.94 million on gross revenue of S$426.68 million, up 9.0 percent on-year, MNACT said.

The DPU for the full year came in at 6.819 Singapore cents, up 10.4 percent from 6.175 Singapore cents in the previous fiscal year, bolstered by distribution of Festival Walk’s insurance proceeds and from the contributions from The Pinnacle Gangnam, the filing said.

The committed occupancy level of the portfolio was at 97.4 percent as of end-March, with the Festival Walk property at 99.6 percent, MNACT said.

Read more details of MNACT’s financial results.