For 1H19, MNACT’s NPI rose 12.3% to $160.4 million which made up 49.2% of OCBC’s FY19 forecast. DPU of 3.807 cents represented growth of 2.5%, accounting for 49.8% of OCBC’s full-year projection.
Operationally, MNACT’s overall portfolio occupancy remained at 99.6%, unchanged q-o-q with the slight dip at GP offset by an increase at SP. FW and its Japan portfolio continued to be 100% occupied.
As at Sept 30, rental reversions came in at 40% higher for FW’s retail component and +15% higher for the office component. Rental reversions for GP, SP and Japan were +8%, +15% and +6%, respectively.
FW’s footfall saw a slight decline of 1.9% y-o-y in 2Q19 to 10.2 million, but 1H19 figures still pointed to positive growth of 2.7% to 19.9 million. As for tenants’ sales, this came in at a 7% growth in 2Q19 to HK$1,298 million ($229 million).
In terms of risk management, MNACT has hedged 78% of its debt, while 80% of its estimated FY19 distributable income has been hedged into SGD.
In a Monday report, analyst Andy Wong says OCBC is retaining its forecasts given this set of in-line results. However, given the ongoing macroeconomic uncertainties, He has conservatively raised its cost of equity assumption from 7.3% to 7.6%.
“Correspondingly, our fair value estimate is lowered from $1.42 to $1.34,” says Wong, “MNACT is currently trading at an attractive FY19F distribution yield of 6.8%, based on the closing price of $1.13 on 26 Oct.”
Year to date, units of MNACT have fallen nearly 9% to $1.13.
