MCT's revenue and net property income down in its nine-months year-to-date results

IN A business update, Mapletree Commercial Trust (MCT) said on Wednesday after trading hours that its year-to-date gross revenue and net property income (NPI) for FY20/21 are down 1.9 per cent and 1.2 per cent respectively on the back of Covid-19 rental rebates for eligible tenants.

Year-to-date FY20/21 gross revenue stood at S$348.7 million, while NPI stood at S$275.9 million. Property operating expenses was also down 4.4 per cent to S$72.8 million in the year to date.

As at Dec 31, 2020, the committed occupancy of the portfolio was 98.1 per cent, up from 95.3 per cent a quarter ago.

MCT's manager said that both shopper traffic and tenant sales have recovered progressively since Phase Two of the reopening from June 19. The rebound in tenant sales continues to outpace that for shopper traffic.

VivoCity, one of MCT's assets, recorded S$232.2 million in tenant sales in the third quarter on the back of festivities - this was about 85.9 per cent of the sales from the same period a year ago.

As for its office and business park assets, year-to-date FY20/21 gross revenue and NPI were up 21.8 per cent and 22.6 per cent.

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This was mainly due to the full-period contribution from Mapletree Business City II in year-to-date FY20/21, as well as higher contribution from Mapletree Anson, on the back of higher occupancy and the effects of step-up rents in existing leases.

As at Dec 31, 2020, the manager said that it has put in place sufficient facilities to refinance all borrowings due in FY21/22, with more than S$500 million of cash and undrawn committed facilities to meet working capital and financial obligations.

The average term to maturity was 4.4 years and the gearing ratio, at 34 per cent. The weighted average all-in cost of debt was 2.51 per cent per annum and the interest coverage on a 12-month trailing basis was about 4.2 times.

About 71.4 per cent of the total debt of S$3 billion was fixed by way of fixed-rate debt or interest-rate swaps.

In its outlook, MCT's manager noted that while the economy is stabilising and Phase 3 of re-opening will lend some positivity to the retail sector in 2021, hiring sentiments remain cautious, given lingering uncertainty on how the global pandemic will pan out.

"The sector will continue to remain under pressure and market recovery could be long and uneven," it said.

MCT expects office demand to remain subdued in H1 2021. However, spots of demand could come from Chinese technology companies and non-bank financial services firms, it said.

But with the rolling out of Covid-19 vaccine and limited supply of Grade A office space in 2021, there are prospects for rents to turn upwards by the second half of 2021, said the manager.

Demand for business parks is likely to remain steady, driven by continued support by high-tech industries, said the manager.

With many uncertainties still on the horizon, the manager said that MCT's focus remains to maintain a healthy portfolio occupancy and sustainable rental income by working closely with tenants.

Units of MCT closed at S$2.10, down 2 Singapore cents or 0.94 per cent at the prior to the release of the results.