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Mapletree Commercial Trust posts 23% higher NPI of $96.9 mil for 1QFY21/22

Atiqah Mokhtar
Atiqah Mokhtar7/23/2021 07:26 PM GMT+08  • 3 min read
Mapletree Commercial Trust posts 23% higher NPI of  $96.9 mil for 1QFY21/22
MCT says its performance was impacted by Covid-19 measures, though at a less severe magnitude compared to last year.
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Mapletree Commercial Trust (MCT) has reported a net property income (NPI) of $96.9 million for the 1QFY2021/2022 ended June, up 22.9% y-o-y from $78.9 million previously.

The higher NPI is in line with the trust’s higher gross revenue of $124.1 million for the quarter, up 23.7% from $100.3 million the previous year.

MCT’s manager attributes the higher revenue and NPI to lower rental rebates compared to a year ago, as well as compensation received from a pre-terminated lease at mTower.

“Our performance in 1QFY2021/2022 was dampened by the re-imposition of Covid-19 measures in Singapore, including a five-week cessation of dining-in at all F&B establishments. Thankfully, the impact was less severe than a year ago,” says the manager’s CEO, Sharon Lim.

Lim highlights that MCT gave out rebates amounting to approximately 0.6 months of fixed rents to eligible retail tenants during the quarter, which contributed to property expenses of $27.2 million for the quarter, up 26.8% y-o-y. NPI margin amounted to 78.1%, easing from 78.6% the previous year.

According to the manager, all properties recorded higher y-o-y contributions except for MBC, which posted a slight decline. Portfolio occupancy stood at 95.4% as at June 30.

For VivoCity, MCT reported a y-o-y increase in gross revenue and NPI by 77.6% and 80.7% respectively, driven by shopper traffic and tenant sales which were up by 114.1% and 111.7% y-o-y respectively.

While the tightened Covid-19 measures which were in place from May to June impacted recovery momentum, following the easing of restrictions in the latter half of June, the manager says average daily shopper traffic reached about half of pre-Covid levels, resulting in lower rental rebates compared to a year ago.

VivoCity occupancy stood at 99.4% as of June 30.

For its office and business park portfolio, gross revenue and NPI were up 7.6% and 7.7% y-o-y respectively, mainly due to the compensation received from a pre-terminated lease at mTower.

The office and business park portfolio has an actual occupancy of 92.6% as at June 30, including 100% occupancy at Bank of America Merrill Lynch HarbourFront. mTower had the lowest occupancy at 72.3%.

As at June 30, MCT has aggregate leverage of 34.3%, with more than $400 million of cash and undrawn facilities. It has no more than 24% of its total debt of some $3 billion due in the financial year.

Looking ahead, the manager is cautious, noting that secondary outbreaks could pose disruptions to full market recovery for the rest of 2021.

The retail market is expected to continue facing pressure as work-from-home remains the default and borders stay closed, though with a smaller magnitude of rental decline.

For its office portfolio, the manager notes that there are still potential risks on the demand side, but the tapering supply pipeline bodes well for the market. “The market remains two-tiered in the medium term – the outlook for Grade A market looks positive, but recovery for Grade B market is likely to lag behind,” it says.

For business parks, the manager believes demand remains resilient. Rental growth is likely to stem from the city fringe submarket given limited upcoming supply and strong demand. However, upcoming supply within the Rest of Island submarket is likely to put further downward pressure on rents.

Units in MCT closed 1 cent or 0.47% lower at $2.14 on July 23.

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