MNACT's H1 DPU falls 26 per cent to 2.88 Singapore cents

MAPLETREE North Asia Commercial Trust (MNACT) on Thursday reported that its distribution per unit (DPU) for the first half ended Sept 30 fell 26 per cent to 2.876 Singapore cents, down from 3.887 cents a year ago.

Additionally, its distributable income also fell 21.8 per cent year-on-year (y-o-y) to S$96.8 million.

Gross revenue for the real estate investment trust (Reit) declined 9.6 per cent y-o-y to S$190.1 million, while net property income (NPI) slumped a greater 17.7 per cent y-o-y to S$139.7 million.

The fall was mainly attributed to rental reliefs granted to tenants at its Festival Walk mall in Hong Kong of S$34.9 million due to the Covid-19 impact, as well as lower average rental rates at Festival Walk and Gateway Plaza, which is located in China.

However, the declines were partially offset by the half-year contribution from the acquisitions of Japan's mBay Point Makuhari Building and Omori Prime Building on Feb 28, along with higher average rates of the Hong Kong dollar, yen and yuan against the Singapore dollar.

Cindy Chow, chief executive of the Reit's manager, said that despite a "challenging" first half, the strategy of "enhancing MNACT's resilience through continued diversification via yield-accretive acquisitions and protecting the occupancy levels of our properties, have mitigated to some extent the impact from the Covid-19 and the slowing economy."

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In H1 FY21, MNACT also received interim payments of S$36.8 million from insurers, on account of the estimated insurance claims for property damage and revenue loss due to business interruption at Festival Walk, which had been damaged during the city's protests and was closed from last November to January this year.

The insurance proceeds are non-distributable income and are recorded as non-operating income in the financial statements.

"Our retail tenants continue to navigate through a volatile and weak retail environment, impacted by the social distancing measures," said Ms Chow.

However, she added, the manager will continue to focus on maintaining a high occupancy rate at the mall, which stood at 99 per cent as at end September, while exploring more initiatives to boost sales and traffic.

Overall, committed occupancy levels across MNACT's portfolio stood at 96.6 per cent as at end September. Its property operating expenses for H1 had increased 24 per cent y-o-y to S$50.4 million.

Ms Chow said that in view of the Covid-19 situation and market volatilities, MNACT's performance in FY21 is expected to be lower than that in FY20.

She added: "We will continue to drive operational efficiency through reducing operating expenses and non-essential capital expenditure. At the same time, acquisition opportunities will be actively sought to further diversify the portfolio and expand MNACT's income stream."

Unitholders of MNACT will receive their H1 distribution on Dec 28. The books closure date is on Nov 6 at 5pm.

Units of MNACT closed down S$0.02 or 2.21 per cent to S$0.885 on Thursday, prior to the announcement,