Mapletree Pan Asia Commercial Trust (MPACT) has reported a distribution per unit (DPU) of 4.94 cents for the 1HFY2022/2023 ended Sept 30, 12.5% higher y-o-y.
The half-year’s DPU comprises the clean-up distribution of 3.04 cents per unit from Mapletree Commercial Trust (MCT) for the period from April 1 to July 20 (paid on Aug 25) and the DPU of 1.90 cents from July 21 to Sept 30.
The DPU of 1.90 cents will be paid on Dec 7.
In its statement on Oct 27, the REIT manager announced that it will be adopting a quarterly reporting framework starting with its results for the 3QFY2022/2023 ending Dec 31. Distributions to MPACT’s unitholders will also be on a quarterly basis from the 3QFY2022/2023 onwards.
During the 1HFY2022/2023, MPACT reported gross revenue of $353.2 million, up by 44.9% y-o-y.
Property operating expenses during the six-month period increased by 44.8% y-o-y to $78.0 million.
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Consequently, 1HFY2022/2023 net property income (NPI) increased by 44.9% y-o-y to $275.2 million.
NPI margin stood at 77.9%.
The higher gross revenue and NPI were attributable to the contribution from the properties of Mapletree North Asia Commercial Trust (MNACT) that were acquired through the merger of MCT and MNACT. However, they do not include contribution from The Pinnacle Gangnam. MPACT will share profit after tax of The Pinnacle Gangnam based on its 50% interest.
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The higher figures were also thanks to higher contribution from MPACT’s core assets, VivoCity and Mapletree Business City (MBC).
The higher property operating expenses for the period were due to the contribution from properties acquired through the merger and higher expenses across all of the REIT’s properties in Singapore. The latter was in tandem with the increased activities during the period.
In the 1HFY2022/2023, a total of 1.1 million square feet of net lettable area (NLA). was renewed or re-let at an average 1.1% portfolio rental uplift. MBC, the REIT’s China properties and The Pinnacle Gangnam posted positive rental reversions ranging from 3.8% to 14.2%. The overall tenant retention rate during the quarter was 70.4%.
As at Sept 30, the REIT’s portfolio occupancy stood at 96.9%, down 0.3 percentage points q-o-q. The lower q-o-q was mainly dragged by MPACT’s China properties.
The REIT’s overall weighted average lease expiry (WALE) stood at 2.4 years by gross monthly income (GRI).
As at Sept 30, MPACT’s aggregate leverage stood at 40.1%. Its average term to maturity was 3.0 years.
“In spite of rising volatilities in the global economy and financial markets, positive indicators have been observed in our operating metrics. Notably, major leases at Bank of America HarbourFront (BOAHF), Gateway Plaza and Festival Walk were renewed ahead of expiry and higher commitments were recorded in most markets, driving the portfolio’s committed occupancy to 96.9%. Positive rental reversions were secured in the majority of markets,” says Sharon Lim, CEO of the manager. “We will remain proactive in working with our tenants to address their space requirements, aiming to maintain stability of the portfolio.”
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In Singapore, which is the REIT’s core market, the REIT’s portfolio continued to “chart a new post-Covid-19 path”, Lim adds. “In tandem with the country’s full reopening, VivoCity and MBC achieved all-rounded improvements – delivering higher revenue and NPI, as well as rental uplifts of 7.7% and 3.8% respectively. Together, approximately 63% of our gross revenue and NPI were derived from these two assets, further underscoring their status as crown jewels of MPACT.”
In the 2QFY2022/2023, VivoCity kept its recovery momentum with its tenant sales for the quarter continuing to surpass its pre-Covid-19 levels (which is around the 2QFY2019/2020).
“Notwithstanding its solid performance, proactive efforts to strengthen the mall continues. We are now embarking on an 80,000 square feet asset enhancement initiative (AEI) that includes converting part of TANGS’ Level 1 space into a 56,000 square feet new retail zone,” says Lim.
“This is the culmination of a project that has been in the works for several years, utilising the escalator node added in 2018 to activate an alternative shopper discharge channel. This is win-win for both TANGS and VivoCity as the former will be able to optimise its footprint on Level 1 and Level 2, while we seize the opportunity to introduce exciting food and beverage (F&B) and lifestyle options. A majority of the space has been committed and the new zone is expected to progressively open by mid-2023. We expect the entire AEI to deliver more than 10% of return on investment on a stabilised basis,” she adds.
In Hong Kong, Lim notes that the performance of Festival Mall saw higher footfall and tenant sales in the 2QFY2022/2023 due to the gradual easing of measures and government consumption vouchers, even as the mall continued to be impacted by strict Covid-19 protocols.
“The global economic environment has deteriorated due to prolonged political conflicts, rising energy prices and interest rates. In navigating the volatilities, we will press on with our proactive asset management approach. We will also focus on safeguarding the balance sheet, and seize suitable opportunities to achieve a balance of risks and costs,” she says.
During the half-year period, the electricity tender for MPACT’s Singapore properties was completed during the reporting period.
“In an environment that remains marred by geopolitical uncertainties, operational challenges from inflationary pressures, rising energy prices, the manager will remain focused on maintaining healthy portfolio occupancy and steady rental incomes, while managing costs in a sustainable manner,” says the REIT manager via its Oct 27 statement.
The REIT currently has total assets under management (AUM) of approximately $16.9 billion comprising 18 diversified and quality commercial assets across five key gateway markets of Asia.
Units in MPACT closed 2 cents higher or 1.22% up at $1.66 on Oct 27.
