SINGAPORE (Oct 15): The manager of Mapletree Commercial Trust (MCT) has reported distribution per unit (DPU) of 2.32 cents for the 2Q19/20 ended September, some 2.2% higher than DPU of 2.27 cents in 2Q18/19.

This brings DPU for 1H19/20 to 4.63 cents, up 2.9% from 4.50 cents in 1H18/19.

2Q19/20 gross revenue rose 1.9% to $112.0 million, from $109.9 million a year ago.

This was on the back of higher contributions from the trust’s properties at VivoCity, Mapletree Business City 1 (MBC 1), PSA Building and Bank of America Merrill Lynch HarbourFront.

Revenue for VivoCity, in particular, saw robust growth in 2Q19/20, coming in at $2.7 million higher than a year ago. This was driven mainly by higher rental income from new and renewed leases, achieved together with the asset enhancement initiatives completed to-date, the effects of the step-up rents in existing leases and higher other revenue.

VivoCity saw higher shopper traffic and tenant sales, particularly from the opening of new stores in the Basement 2 and Level 1. The mall also benefitted from the commencement of operations at NTUC Fairprice’s revamped outlet, which saw full month contribution from August.

Property operating expenses was 2.8% higher at $24.3 million during the quarter, compared with $23.7 million a year ago, mainly due to higher staff costs, utilities expenses and property taxes.

Consequently, net property income (NPI) increased by 1.7% to $87.7 million for 2Q19/20

The higher net property income was offset by higher finance expenses and higher manager’s management fees.

As at end September, cash and cash equivalents stood at $36.4 million.

MCT on Tuesday also obtained unitholders’ approval for the proposed acquisition of Mapletree Business City (Phase 2) (MBC 2), along with the common premises.

“As a top-quality asset, [MBC 2] is an excellent fit with the existing portfolio,” says Sharon Lim, CEO of the manager. “It will also enlarge MCT’s asset size from $7.4 billion to $8.9 billion.”

The acquisition is expected to be NPI, DPU and NAV per unit accretive.

Lim opines that the move “reinforces MCT’s foothold in the Alexandra precinct, giving [MCT] greater economies of scale and flexibility in meeting tenant requirements”.

Units in MCT closed 1 cent lower at $2.34 on Tuesday, before the results announcement.