Rent boosts MGCCT's Q4 earnings

MGCCT's recently acquired business park project in Shanghai, Sandhill Plaza, is fully occupied.
MGCCT's recently acquired business park project in Shanghai, Sandhill Plaza, is fully occupied.PHOTO: MAPLETREE GREATER CHINA COMMERCIAL TRUST

Mapletree Greater China Commercial Trust's net property income jumps 17% to $73 million

Mapletree Greater China Commercial Trust (MGCCT) delivered another quarter of strong earnings, thanks to higher revenue from its enlarged portfolio and positive rental reversions.

Distribution per unit (DPU) grew 10.4 per cent to 1.923 cents for the three months to March 31, up from 1.742 cents a year earlier, said its trust manager, Mapletree Greater China Commercial Trust Management, yesterday. Net property income jumped 17.3 per cent to $73 million, while gross revenue grew 15.2 per cent to $87.8 million.

The rise in turnover came on the back of the acquisition of Sandhill Plaza, strong rental uplifts from Festival Walk and Gateway Plaza, as well as the appreciation of the Hong Kong dollar against the local currency, the trust manager said.

The three commercial properties in Greater China - with a combined valuation of $5.9 billion as at March 31 - make up the MGCCT portfolio.

Demand for retail space at Festival Walk, a retail and office building in Hong Kong, remained resilient. The mall is fully occupied and had a high average rental uplift of 37 per cent for leases that expired during the 2015-16 financial year.

  • AT A GLANCE

  • GROSS REVENUE: $87.8 million (+15.2%)

    NET PROPERTY INCOME: $73 million (+17.3%)

    DISTRIBUTION PER UNIT: 1.923 cents (+10.4%)

It noted that Gateway Plaza, a Grade A office block with a retail atrium in Beijing, maintained a healthy occupancy rate of 96.8 per cent despite new office supply coming up in the vicinity. About 90 per cent of the leases set to expire in the financial year had been "renewed or re-let at an average rental uplift of 25 per cent".

Refurbishment works were completed at Gateway Plaza during the quarter, adding about 800 sq m of space for food and beverage outlets.

MGCCT's recently acquired business park project in Shanghai, Sandhill Plaza, is also fully occupied.

"Demand for MGCCT group's three high-quality and well-located properties is expected to remain resilient, adding much stability to the portfolio's rental income," said Ms Cindy Chow, chief executive of the trust manager.

Fourth-quarter property operating expenses rose 6.1 per cent to $14.8 million, owing partly to the addition of Sandhill Plaza, higher property and lease management fees, and foreign exchange effects.

Net asset value per unit was $1.239 as at March 31, up from $1.198 at the end of March last year.

MGCCT posted a 21 per cent jump in full year net property income to $277.5 million, as gross revenue rose 19.7 per cent to $336.6 million.

"We will continue to focus on driving the performance of the existing assets while exploring acquisition opportunities that would further enhance the growth of the portfolio," said Ms Chow in the statement.

The trust manager said investors will be receiving a DPU of 3.771 cents for the period from Oct 1 to March 31, being the second distribution for the 2015-16 financial year. It is derived based on the total distributable income for the period over the 2.76 billion issued units as at the end of March.

A version of this article appeared in the print edition of The Straits Times on April 28, 2016, with the headline 'Rent boosts MGCCT's Q4 earnings'. Print Edition | Subscribe