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MCT reports net property income of $291.3 mil for 9MFY2021, 5.6% up

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Units in MCT closed 1 cent higher or 0.55% up at $1.84 on Jan 26.

The manager of Mapletree Commercial Trust (MCT) has reported gross revenue of $374.0 million for the 9MFY2021 ended December, 7.3% higher than gross revenue of $348.7 million in the year before.

During the period, MCT’s net property income (NPI) increased 5.6% y-o-y to $291.3 million.

The growth for both figures was attributable to the lower rental rebates given to MCT’s tenants, as well as higher compensation received from lease pre-terminations.

In the 9MFY2021, MCT netted $249.0 million in profit for the financial period after tax before distribution, reversing from its loss of $15.8 million in the 9MFY2020.

In VivoCity, tenant sales improved by 3.7% y-o-y in the 3QFY2021, reaching almost 90% of pre-Covid-19 levels. The higher tenant sales were mostly driven by strong festive spending and some relaxation of measures in November 2021.

According to MCT, the mall’s recovery in tenant sales outpaced shopper traffic throughout 9MFY2021 as tenant sales grew 17.8% y-o-y during the period. Shopper traffic during the 9MFY2021 grew 10.2% y-o-y.

MCT’s office and business park assets saw gross revenue improve 3.3% y-o-y for the 9MFY2021, driven by higher y-o-y contribution from MBC, mTower and Bank of America Merrill Lynch HarbourFront.

NPI for its office and business park assets for the 9MFY2021 grew 2.1% y-o-y.

As at Dec 31, 2021, the REIT’s portfolio committed occupancy stood at 96.3% with a weighted average lease expiry (WALE) of 2.7 years.

Cash and cash equivalents as at Dec 31, 2021 stood at $48.8 million, almost four times lower than the $192.5 million posted the year before.

“On a year-to-date basis, we have rendered rental rebates amounting to approximately 1.1 month of fixed rents to eligible tenants and we stand ready to support them where warranted,” says Sharon Lim, CEO of the manager.

“Notwithstanding the emergence of the Omicron variant and fluidity of the Covid-19 situation, we remain hopeful of an imminent recovery given the country’s high vaccination rate and relaxation of work-from-home requirements since the start of 2022,” she adds. “We will continue to work towards further strengthening the portfolio’s performance, and seize opportunities to position MCT for the eventual upturn.”

Commenting on MCT’s proposed merger with Mapletree North Asia Commercial Trust (MNACT), Lim says the key to MCT’s long-term growth, is to “add a platform with scale and reach in Pan Asia”.

The proposed merger was announced on Dec 31, 2021.

“The merger is undoubtedly a big step, but a transformative one that will put MCT on the best path forward. Financially, MCT unitholders can immediately enjoy distribution per unit (DPU) and net asset value (NAV) accretion. Strategically, this is an exceptional opportunity to combine MCT’s strength and MNACT’s growth,” she continues.

Post-merger, Lim adds that the enlarged REIT’s immediate focus will be to harness the best of both teams to “capitalise on market recovery”.

“The enlarged scale and stronger financial muscles will enable MPACT to undertake capital recycling opportunities, take on value-enhancing asset enhancement and development initiatives, and pursue larger acquisitions in Asia’s key gateway markets. All these will be firmly rooted to a prudent capital management approach that prioritises resilience for the vehicle,” she says, remaining confident that MPACT will be more successful in driving DPU growth and delivering sustainable value and return for all unitholders.

Units in MCT closed 1 cent higher or 0.55% up at $1.84 on Jan 26.

Photo: MCT

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