Mapletree North Asia Commercial Trust Q1 net property income up 14.3% with help from new Tokyo building

MALL and office landlord Mapletree North Asia Commercial Trust (MNACT) saw its first-quarter net property income lifted by contributions from a new asset in Japan, the manager said in an update on Monday.

Net property income grew 14.3 per cent year on year, to S$78.3 million for the three months to June 30. Gross revenue was up by 10.0 per cent to S$103.0 million.

MNACT highlighted the performance of its Japan assets in its bourse filing, with higher average occupancy at Ixinal Monzen-nakacho Building in Tokyo, as well as revenue contributions from Hewlett-Packard Japan headquarters, which the trust acquired in mid-June.

Said Cindy Chow, chief executive of the manager: "The property, which is on a long-term lease to Hewlett-Packard Japan, is expected to provide a stable income stream for MNACT and will enhance the resilience of MNACT's portfolio."

Net property income also rose on lower rental reliefs for retail tenants at Festival Walk in Hong Kong, as footfall and sales improved on the back of a better Covid-19 situation in that city.

Ms Chow said that "we expect the quantum of rental reliefs to be granted and the impact on MNACT's revenue to be further reduced", especially as repairs to Festival Walk - damaged by the civil unrest in late 2019 - are set to be completed by end-2021.

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Meanwhile, the manager will "target demand from growth industries and from sectors less affected by Covid-19" in the office segment, such as technology, media and telecommunications, information technology, finance and the biomedical industry.

Weak rents and occupancies in Beijing could pick up from 2022, while MNACT expects its office properties in Shanghai, Greater Tokyo and Seoul to stay resilient.

Portfolio committed occupancy stood at 97.4 per cent as at end-June, while weighted average lease to expiry by gross rental income was 2.5 years. Meanwhile, aggregate leverage stood at 41.8 per cent, with an average term to maturity of 3.03 years for debt.

The real estate investment trust, which holds 13 properties across mainland China, Hong Kong, Japan and South Korea, makes distributions on a half-yearly basis.

Units closed flat on Monday at S$1.03, before the results were out.