Mapletree Commercial Trust slashes Q4 payout for prudence's sake

Singapore

MAPLETREE Commercial Trust has declared a distribution per unit (DPU) of 0.91 Singapore cent for the fourth quarter ended March 31, down sharply from 2.31 Singapore cents in the year-ago period, despite a 10.5 per cent rise in distributable income.

This is in the interest of exercising prudence amid an uncertain Covid-19 situation, said the real estate investment trust's manager on Wednesday after market close.

Gross revenue for the quarter was up 12.8 per cent at S$127.3 million, while net property income rose 12.6 per cent to S$98.6 million.

These rises were driven mainly by Mapletree Business City (MBC) II, acquired on Nov 1, 2019, and achieved despite rental rebates granted to retail tenants affected by Covid-19.

The Reit has retained S$43.7 million of the original S$73.9 million distributable amount by way of capital allowance claims and capital distribution retention, leaving S$30.1 million available for distribution.

Noting that measures taken to combat Covid-19 have hit retail footfall and sales, with uncertainty over when normalcy can return, the chief executive officer of the Reit's manager Sharon Lim said: "While we remain well-capitalised with ample financial flexibility, we must continue to exercise prudence."

At VivoCity, one of the Reit's five assets, full-year shopper traffic and tenant sales dipped by 6.8 per cent and 3.4 per cent respectively, which the manager said was largely due to the impact of Covid-19 in the fourth quarter.

With the current circuit breaker, Mapletree Commercial Trust will be waiving the April fixed rent for eligible retail tenants. "We hope that this, as well as the S$29 million of assistance implemented for our retail tenants previously, can give them some helpful relief," said Ms Lim.

With a new law granting temporary relief amid the outbreak, "some tenants can also be expected to defer lease payments", noted the Reit manager. As the situation is still evolving, the full impact of the pandemic on performance for the current financial year "cannot be ascertained".

The fourth quarter DPU will be paid on May 29, with books closure on April 30. This takes total DPU for the year to eight Singapore cents, down from 9.14 Singapore cents the year before.

For the full year, gross revenue was up 8.8 per cent at S$482.8 million, and net property income was up 8.7 per cent at S$377.9 million.

As at March 31, the committed occupancy of the Reit's portfolio was 98.7 per cent. Its total investment properties were valued at S$8.9 billion, up 26.7 per cent with the acquisition of MBC II.

Units in the Reit closed down three cents or 1.67 per cent at S$1.77 on Wednesday before the release of the results.