Mapletree North Asia Commercial Trust's Q3 net property income up 13.1%

MALL and office landlord Mapletree North Asia Commercial Trust (MNACT), the target of a proposed merger with Mapletree Commercial Trust, posted higher Q3 net property income (NPI) of S$85.6 million, rising 13.1 per cent from a year ago.

Gross revenue for the three months to Dec 31, 2021 increased 11.8 per cent to S$112.6 million. In addition to the full-quarter contribution from the Hewlett-Packard Japan Headquarters Building acquired on June 18, there was an absence of rental reliefs during the quarter. The year before, rental reliefs totalled S$8.7 million.

For the nine months ended Dec 31, NPI grew 14.9 per cent to S$247.4 million while gross revenue climbed 12.8 per cent to reach S$328 million. This was due to lower rental reliefs, and contribution from the Hewlett-Packard Japan Headquarters Building.

Portfolio occupancy rate stood at 97.5 per cent as at end-December.

Festival Walk recorded full occupancy. The mall's footfall increased 27.7 per cent and tenants' sales rose 20.9 per cent for the nine-month period. Consumption sentiment was positive amid an economic recovery in Hong Kong and the government's consumption voucher scheme to boost spending, said the manager.

Gross revenue was up 18.8 per cent and NPI increased 21.6 per cent, mainly due to lower rental reliefs but offset by a lower average retail rental rate.

Average rental reversion for retail leases at Festival Walk was -32 per cent. Average rental reversion at Gateway Plaza was also negative, at 25 per cent.

Gross revenue from Gateway Plaza rose 4.3 per cent while NPI rose 3.8 per cent. This was mainly due to a stronger yuan against the Singapore dollar, but this was also offset by a lower average rental rate.

MNACT's aggregate leverage ratio edged up to 42.1 per cent as at end-Dec from 41.4 per cent as at end-Sep, mainly due to lower portfolio value.

The average term to maturity of MNACT's debt was 2.76 years while the Reit's adjusted interest cover ratio was 4.2 times.

Festival Walk's average renewal or re-let rental rate is expected to be lower in FY2022 compared to the previous year. But "initiatives to strengthen the mall's appeal as a lifestyle hub, together with the continued focus in keeping the mall's occupancy high, will bolster the resilience of the mall," the manager said.

In November last year, the manager entered into a settlement agreement with insurers on the claims for property damage and revenue loss due to business interruption, in light of the protests in Hong Kong.

The amount of S$3.5 million, in excess of the distribution top-ups of S$32.9 million paid to unitholders in Q3 FY20 and Q4 FY20, will be distributed as part of the semi-annual distribution for the period from Oct 1, 2021 to Mar 31, 2022.

Units of MNACT ended trading at S$1.09 on Thursday (Jan 27), down S$0.01 or 0.91 per cent.