Mapletree North Asia Commercial Trust (MNACT) has announced a 10.4% y-o-y rise in DPU to 6.819 cents for FY2022 for the 12 months to Mar 31 2021. Revenue rose 9% y-o-y to $426.7 million; NPI was 10.2% higher to $329.1 million, and distributable income rose 13.8% to $239.2 million.
The rise in DPU and NPI were helped by lower rental reliefs given to retail tenants at Festival Walk, contributions from acquisitions in Japan and South Korea, contributions from the Hewlett Packard Building acquired on June 18, 2021, as well as a stronger average rate of RMB compared to the Singapore dollar.
However, these positive factors were offset by lower average rental rates at Festival Walk and Gateway Plaza in Beijing, as well as lower average rates of HK dollar and Japanese Yen against the Singapore dollar. DPU was underpinned by the distribution of Festival Walk’s insurance proceeds in excess of the distribution top-ups in FY2020, and contribution from The Pinnacle Gangnam acquired on Oct 30 2020.
“We have seen a narrowing of Festival Walk’s average retail rental reversion, at negative 18% for 4QFY2022, compared to negative 32% for the first nine months of FY2022," says Cindy Chow, CEO of MNACT’s manager.
"However, the outbreak of the Omicron variant of COVID-19 from January 2022 resulted in the authorities imposing unprecedented restrictions on social activities to slow the spread of the virus," she adds.
In order to help tenants at Festival Walk mall tide through the challenging period, MNACT’s manager initiated a new round of rental reliefs, bringing the total rental reliefs granted in FY2022 to $14.7 million.
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Even then, this was lower than the rental reliefs extended to the retail tenants in FY2021, of $49.8 million, largely underpinned by the improved economic sentiments in Hong Kong and an increased vaccination rate against Covid-19 in 2021.
Mapletree Commercial Trust is in the midst of merging with MNACT. Terms of the deal, first announced late last year, were revised on March 21 to include an alternative option for the MNACT unitholders to receive $1.1949 per MNACT unit at NAV wholly in cash.
"This would provide additional optionality and enhanced flexibility to MNACT Unitholders who wish to fully realise their investment, giving higher certainty amidst prevailing market conditions," says Chow.
"MNACT unitholders can also choose to remain invested in a larger and more diversified platform that has a compelling growth strategy ahead through the scrip-only consideration and the cash-and-scrip consideration,” adds Chow.
