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Mapletree Greater China Commercial Trust Q4 DPU dips 2.8% to 1.904 Singapore cents

MAPLETREE Greater China Commercial Trust (MGCCT)'s distribution income in its fourth quarter ended March 31 dipped 1.7 per cent to S$53.8 million from the year-ago period.

This came as distribution per unit slipped to 1.904 Singapore cents from 1.959 Singapore cents.

MGCCT also announced that starting from its first quarter ending June 30, 2018, it will make distributions on a quarterly, rather than on a semi-annual basis. It will make its final semi-annual distribution for the period between Oct 1 and March 31 before starting with the quarterly distributions.

Net property income in the fourth quarter dropped 6 per cent to S$72.9 million from the preceding year, while gross revenue sank 5.5 per cent to S$89.5 million from the year-ago period.

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One reason was a reversal in the value-added tax (VAT) payable in the year-ago period. The VAT regime for the Chinese real estate industry was implemented on May 1, 2016. The group had assumed a higher VAT rate for the Gateway Plaza office with a retail podium in Beijing from the first to third quarter of the previous financial year, until it obtained clarification in March 2017 of the applicable VAT rate and implementation process from local authorities.

Another reason was the lower average rate of the Hong Kong dollar against the Singapore dollar. However, the Festival Walk mall and office in Hong Kong and Gateway Plaza saw higher rent rates which translated into revenue growth.

For the full year ended March 2018, distribution per unit increased to 7.481 Singapore cents from 7.341 Singapore cents in the previous year.

This came as Q4 income available for distribution increased 3.1 per cent to S$210.9 million.

Gross revenue rose 1.3 per cent to S$355 million from the previous year, as Festival Walk and Gateway Plaza's higher rental rates helped revenues rise. However, MGCCT also faced lower average rates of the Hong Kong dollar and yuan against the Singapore dollar. Net property income edged up 0.5 per cent to S$287.1 million.

Besides Festival Walk and Gateway Plaza, MGCCT also has the Sandhill Plaza business park development in Shanghai in its portfolio.

Portfolio occupancy as at end-March 2018 was 98.5 per cent for the three developments, which all booked positive rental reversions.

Upon completion of its acquisition of six freehold commercial properties in Tokyo, Chiba and Yokohama - which was approved by unitholders on April 24 - it will be renamed Mapletree North Asia Commercial Trust.

MGCCT units closed S$0.03 or 2.6 per cent lower at S$1.13 on Wednesday.