Higher rents boost Mapletree Commercial's Q3

Singapore

RETAIL landlord Mapletree Commercial Trust (MCT) on Wednesday posted a 1.3 per cent increase in income available for distribution to S$66.5 million for its third quarter ended Dec 31, 2017.

Distribution per unit (DPU) also rose to 2.3 Singapore cents, up from 2.28 Singapore cents a year ago. This will be paid on Feb 28; the books closure date is Feb 1.

Revenue for the quarter rose 0.8 per cent to S$109.7 million, while net property income rose 1.9 per cent to S$86 million, mainly due to higher contributions from VivoCity and Mapletree Business City I, thanks to step-up rents in their existing leases, as well as higher rental income following the completed renovations at VivoCity.

Revenue for PSA Building and Mapletree Anson fell slightly, mainly due to lower occupancy rates in the quarter, despite step-up rents in existing leases as well. Committed occupancies at PSA Building and Mapletree Anson were at 97.4 per cent and 92.9 per cent at end-2017, compared to 96.2 per cent and 100 per cent a year ago.

The latest distribution brings the nine-month FY18 DPU to 6.77 Singapore cents, a 6.4 per cent growth from the corresponding year-ago period.

In terms of the property performance at its highest-contributing asset, the trust said that VivoCity saw a 1.2 per cent decline in shopper traffic year-to-date to 41.4 million. But tenant sales inched up by 1.2 per cent to S$726.7 million.

As a result, gross revenue and net property income both grew due to higher rental income from new and renewed leases as well as completed refurbishments. As at end-2017, the committed occupancy for VivoCity remained high at 99.7 per cent.

Overall, the trust achieved a 1.2 per cent portfolio rental reversion for the first nine months. It cited data from consultancy CBRE as saying that retail macro indicators seemed to have held up relatively well into the end of 2017.

However, while the retail sector looked poised to recover, there was no significant uptick in rents as the retail market continues to "find its footing". Still, the modest supply situation over the next three years could also lend some support to a stronger rental performance, CBRE said.

Units of the trust added one cent to close at S$1.66 on Wednesday.