Higher DPU in Q4 for Mapletree Commercial Trust

Mapletree Commercial Trust's manager attributed the rise in gross revenue to positive contributions from VivoCity (right), office building Bank of America Merrill Lynch HarbourFront and integrated project PSA Building.
Mapletree Commercial Trust's manager attributed the rise in gross revenue to positive contributions from VivoCity (right), office building Bank of America Merrill Lynch HarbourFront and integrated project PSA Building.PHOTO: VIVOCITY

Stronger showing at VivoCity, office assets boost turnover, earnings

Mapletree Commercial Trust (MCT) delivered a higher distribution per unit (DPU) in the fourth quarter, as the stronger performance at VivoCity mall and some office assets boosted turnover and earnings.

DPU for the three months to March 31 rose 1 per cent to 2.02 cents, up from two cents in the same period last year, said trust manager Mapletree Commercial Trust Management yesterday.

Net property income came in at $55 million in the fourth quarter, up 3.5 per cent, while gross revenue climbed 2.8 per cent to $73 million.

The trust manager attributed the increase in gross revenue to positive contributions from VivoCity, office building Bank of America Merrill Lynch HarbourFront and integrated development PSA Building.

The higher contributions were partly offset by lower revenue from Mapletree Anson, a 19-storey office building in the Central Business District, it said.

The four properties, valued at $4.3 billion as of March 31, make up MCT's portfolio.

  • AT A GLANCE

  • GROSS REVENUE: $73 million (+2.8%)

    NET PROPERTY INCOME: $55 million (+3.5%)

    DISTRIBUTION PER UNIT: 2.02 cents (+1%)

Ms Sharon Lim, chief executive of the trust manager, said: "We are pleased to close the year with a set of steady results despite weak retail sentiments and office market."

In a Singapore Exchange filing yesterday, the trust manager said fourth-quarter revenue for VivoCity was $1.9 million higher than in the corresponding period a year ago, owing largely to higher income from positive rental reversion and "the effects of the step-up rents" in existing leases.

During the quarter, shopper traffic at VivoCity was up 7 per cent, while tenant sales rose 6 per cent against the previous year.

The trust manager said the mall achieved record tenant sales of $939 million - a 3.3 per cent increase over the preceding year - in the 2015-2016 financial year.

VivoCity is undergoing a second round of refurbishment works, aimed at enhancing its food and beverage offerings in basement two. The $6.1 million renovation is expected to be completed later this year.

The occupancy level for MCT's portfolio as of March 31 was 96.6 per cent, up from 95.7 per cent at the end of March last year.

Net asset value per unit rose to $1.30 as of March 31, from $1.24 a year earlier.

The trust manager said MCT posted a 4.3 per cent rise in net property income for the full year at $220.7 million, on gross revenue of $287.8 million, which was up 1.9 per cent.

Its gearing ratio was 35.1 per cent at the end of March, down from 36.4 per cent a year ago, after the upward revaluation of the portfolio assets. It added that 73.8 per cent of MCT's total debt has been fixed by way of fixed-rate debt or interest rate swaps.

Sluggish economic growth and challenges in the retail sector have weighed on demand for office and retail space. However, MCT's portfolio will likely remain resilient, the trust manager said.

"MCT's properties are located within commercial hubs that are expected to maintain their resilience. Barring any further downside risks, MCT's retail property - notably VivoCity - as well as its office properties are expected to remain relatively stable."

A version of this article appeared in the print edition of The Straits Times on April 27, 2016, with the headline 'Higher DPU in Q4 for Mapletree Commercial Trust'. Print Edition | Subscribe