Mapletree Commercial Trust’s 3Q DPU grows 9.7% to 2.28 cents

SINGAPORE (Jan 25): The manager of Mapletree Commercial Trust (MCT) has declared a distribution per unit (DPU) of 2.28 Singaporean cents for the 3Q17, a 9.6% increase from 2.08 cents a year ago and 6.5% higher than the forecast DPU of 2.14 cents.

Gross revenue grew 47.4% to S$108.76 million (RM341 million), compared with S$73.77 million a year ago, which was largely due to a S$31 million contribution by its accretive acquisition of Mapletree Business City I (MBC I).

Positive contributions to gross revenue also notably came from VivoCity, Mapletree Anson, and PSAB, which reported revenue growths of S$2.6 million, S$0.8 million and S$0.6 million respectively, in comparison to 3Q16 figures.

Property operating expenses for the quarter, however, were 42.2% higher at S$24.4 million, compared with S$17.2 million a year ago.

This was largely due to MBC I’s property operating expenses; higher property maintenance expenses; property taxes and property management fees incurred by the existing properties; as well as higher marketing and promotion expenses due to additional and bigger scale programmes organised to celebrate VivoCity’s 10th anniversary.

Finance expenses for 3Q17 were 54.1% higher at S$5.5 million.

As such, the trust’s net property income (NPI), which grew 49% to S$84.4 million for the quarter, was offset by higher finance expenses and management fees — in addition to higher unrealised foreign exchange loss arising from the translation of the Japanese yen medium term notes (JPY MTN) into Mapletree Commercial Trust Treasury Company’s functional currency in Singapore dollars .

As at Dec 31, MCT’s overall portfolio occupancy was higher at 99.0%, as compared to 98.8% as at Sept 30, 2016.

In its filing to the SGX on Wednesday, MCT’s manager observes “some encouraging signs” emerging for the office market in 2016, despite a “challenging start” to the year, opining that recovery in office rents may be possible by late 2017 given the recent trend of higher leasing volumes.

With regards to the business park market, it believes future supply remains limited with average annual new supply over the next three years at a historical low, but thinks business park rents will hold up despite downward pressures from the softening office market.

“MCT’s properties are expected to remain relatively resilient, supported by VivoCity’s healthy performance in a challenging wider retail market and manageable expiries in its office/business park portfolio in the next 12 months,” concludes the manager.

Units of MCT closed 1 Singaporean cent lower at S$1.48. — theedgemarkets.com.sg