SINGAPORE (Aug 1): Mapletree North Asia Commercial Trust (MNACT), formerly known as Mapletree Greater China Commercial Trust, delivered 1Q19 DPU of 1.881 cents, up 1.6% y-o-y. This represents 25% of DBS’s FY19F DPU and is in line with the latter’s expectations.
Mapletree North Asia Commercial Trust reports 1.6% higher 1Q DPU of 1.881 cents
DPU was higher despite the depreciation of the HKD versus SGD, largely on the back of maiden contribution from the recently acquired Japan office portfolio as well as growth in income from Gateway Plaza and SandHill Plaza. These factors also resulted in 1Q19 revenue and NPI jumping 6.2%% and 6.7% y-o-y respectively.
On the back of a weaker HKD, 1Q19 revenue and NPI for MNACT’s core property, Festival Walk in Hongkong, fell 1.5% and 1.1% y-o-y respectively. However, underlying performance for the mall was robust. 1Q19 revenue and NPI in HKD terms rose 3.5% and 4.1% y-o-y respectively, largely due to the impact of prior positive rental reversions.
As a consequence of the appreciation of the RMB versus SGD, Gateway Plaza and Sandhill Plaza had a strong quarter with their respective NPI increasing by 6.0% and 7.3% y-o-y respectively. Excluding the currency tailwind, Gateway Plaza and Sandhill Plaza still reported a healthy 2.8% and 4.0% y-o-y increase in NPI in RMB terms respectively.
While the office market in Japan is stable, MNACT reported 6% positive rental reversions at its Japan portfolio, delivering on the initial investment thesis that the portfolio bought was generally under rented.
“We maintain our ‘buy’ call with target price of $1.45 given MNACT trades at 13% discount to book value and offers an attractive 6.6% yield,” says DBS analyst Mervin Song in a Tuesday report.
“Furthermore, with an improvement in rental reversions and tenant sales compared to FY18, we believe this bodes well for stronger earnings and DPU ahead,” it adds.
As at 3.36pm, units in MNACT are trading 1 cent lower at $1.14.