Mapletree North Asia Commercial Trust FY21 DPU down 13.3% to 6.175 Singapore cts

Distribution per unit was lower for FY21 due to higher rental reliefs granted to retail tenants at Festival Walk mall.
Distribution per unit was lower for FY21 due to higher rental reliefs granted to retail tenants at Festival Walk mall.PHOTO: MGCCT

SINGAPORE (THE BUSINESS TIMES) - Mapletree North Asia Commercial Trust (MNACT) on Thursday posted a distribution per unit (DPU) of 6.175 Singapore cents for the year ending March 31, down 13.3 per cent from the previous year.

Distributable income was down 7.8 per cent at S$210.2 million. The manager of the real estate investment trust (Reit) attributed the decrease to the Covid-19 pandemic, but said it was cushioned by acquisitions in Japan and South Korea.

Net property income for the year rose 5.2 per cent to S$292 million; gross revenue was up 10.4 per cent to S$391.4 million.

DPU was lower for FY21 due to higher rental reliefs granted to retail tenants at its Festival Walk mall in Hong Kong and lower average rental rates at Festival Walk and Gateway Plaza in Beijing, the manager said.

DPU for the second half of FY21 stood at 3.299 Singapore cents. MNACT has amended its policy to make distributions on a half-yearly basis, starting from H1 FY21.

The growth in gross revenue and net property income was mainly due to the full-year contributions from mBAY POINT Makuhari and Omori Prime Building, two Japanese properties acquired in February 2020, as well as a low base effect as no rentals were collected due to a temporary closure of Festival Walk in the second half of FY20.

Finance costs in FY21 were S$3.3 million lower than in the preceding year, mainly due to lower benchmark interest rates and lower rates from the refinancing of borrowings, the manager said.

MNACT holds 12 properties in Beijing, Hong Kong, Japan, Seoul and Shanghai.

As of March 31, 2021, the Reit's assets under management stood at S$7.9 billion, with a total portfolio occupancy of 97 per cent and weighted average lease expiry of 2.3 years.

Net asset value per unit was S$1.274, down from S$1.306 at end-December 2020.

Total gross debt stood at S$3.44 billion. Its interest coverage ratio was 3.7 times on a trailing 12-month basis, while aggregate leverage ratio stood at 41.5 per cent.

The manager said in its outlook that while a global economic recovery is underway, its pace depends on the progress of vaccination, a decline in global infection rates as well as geopolitical developments.

It expects low consumption demand to continue to weigh on retail sales in Hong Kong, and rental rates to drop further. Demand is expected to remain sluggish in Beijing; in Shanghai and Tokyo, office tenants and corporations remain cost sensitive.

Seoul's office market, however, could be facing growing demand from the IT, gaming, biotech and pharmaceutical industries. Full-year contribution from The Pinnacle Gangnam, also acquired last year, is expected to increase the Reit's income stream going forward.

Units of MNACT ended Thursday S$0.01 or 0.94 per cent higher at S$1.07.