Mapletree North Asia Commercial Trust Q1 net property income up 4.1% to S$81.5m

MALL and office landlord Mapletree North Asia Commercial Trust (MNACT) on Thursday (Jul 21) said its net property income (NPI) for the first fiscal quarter ended June came in at S$81.5 million, up 4.1 per cent from the corresponding quarter last year. 

In a voluntary business update, MNACT said the improved NPI figure was due to the full-quarter contribution from Hewlett-Packard Japan Headquarters Building, which it acquired in June last year, as well as a lower quantum of rental relief granted for Festival Walk, a Hong Kong shopping strip, compared to the same period last year. 

The trust was granted S$0.2 million in rental relief for Q1 FY2022/23, versus S$4 million in Q1 FY2021/22. 

However, these were partially offset by lower average-rental rates at Festival Walk mall and Gateway Plaza in Beijing, as well as newly levied property tax at Sandhill Plaza in Shanghai. 

Gross revenue for the quarter inched up 1.6 per cent year on year to S$104.7 million from S$103 million, while NPI margin was up 1.9 percentage points to 77.9 per cent. 

A breakdown of the group’s key properties showed that Festival Walk’s shopper traffic fell 10 per cent in Q1 from the same quarter last year, and tenants’ sales fell 1.1 per cent. The trust said this was due to the tighter social-distancing measures and bans on dining-in imposed by the authorities to contain the spread of Covid-19 at the start of the year. The measures were relaxed progressively in late April and May. 

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Festival Walk’s gross revenue for Q1 was down 0.8 per cent year-on-year, while NPI inched up by 0.04 per cent. 

Over at Gateway Plaza, Q1 gross revenue and NPI were up 6.2 per cent and 11.1 per cent respectively on a year-on-year basis, due primarily to the stronger yen against the Singapore dollar, as well as a higher average occupancy rate. These were, however, partially mitigated by a lower average rental rate. 

Sandhill Plaza’s gross revenue and NPI were down by 3.7 per cent and 7.8 per cent respectively for Q1, due mainly to the newly levied property tax and lower average effective rents, offset by the stronger yen against the Singapore dollar. 

MNACT’s Japan Properties and The Pinnacle Gangnam in Seoul continued to deliver steady growth with higher revenue and NPI, the trust said.

As at end-June, MNACT had about S$8.1 billion in assets under management, and a net asset value per unit of S$1.186. The trust’s total gross debt stood at just over S$3.5 billion, and its aggregate leverage ratio was 42.1 per cent. 

The trust also said it has a “healthy liquidity position” with committed and uncommitted undrawn credit facilities of S$593.2 million, and cash and bank balances of S$178.3 million. 

Looking ahead, MNACT said global economic growth for 2022 is set to moderate from last year’s, with challenges posed by factors such as rising interest rates, global inflation, ongoing supply chain disruptions, geopolitical tensions and the evolving Covid-19 situation. 

For Hong Kong, the trust said the disbursement of consumption vouchers is expected to give a boost to domestic demand, although a full retail market recovery will have to rely on inbound tourism growth and growth in the local economy. 

In Beijing, the trust is expecting new office supply this year to remain low, which will keep vacancy rates from rising further. MNACT noted that there is office demand coming especially from financial and technology sectors for markets such as Lufthansa, with new supply completed in the Q1 this year. It is expecting prospective tenants to seek quality buildings with lower rental cost expectations.

For Seoul, with limited supply and solid leasing demand in the Gangnam Business District, vacancy is expected to remain low, it added.