SINGAPORE (Apr 25): The manager of Mapletree Greater China Commercial Trust (MGCCT) has declared a distribution per unit (DPU) of 1.904 cents for 4Q18, down 2.8% from the DPU of 1.959 cents a year ago in 4Q17 on lower revenue caused by a reversal in VAT payable from the previous year.

This brings the available DPU for FY18 to 7.481 cents, which is 1.9% higher than the FY17 DPU of 7.341 cents.

Gross revenue over 4Q18 fell 5.5% to $89.6 million from $94.8 million a year ago, mainly due to a reversal in 4Q17 of VAT payable which was previously assumed at a higher rate for Gateway Plaza, in addition to a lower average rate of HKD against the SGD.

These were however offset in part by revenue growth from Festival Walk and Gateway Plaza as a result of higher rental rates.

Net property income (NPI) fell 6% to $72.9 million from $77.5 million a year ago.

Property operating expenses fell 3.5% to $16.7 million from $17.3 million over the quarter, mainly attributable to lower promotion and marketing costs at Festival Walk as well as the lower average rate of HKD against the SGD.

As at end Mar 2018, cash and cash equivalents stood at $178 million compared to $180.4 million a year ago.

In its filing on Wednesday, MGCCT’s manager says it has also fixed interest costs for about 78% of the trust’s debt, and hedged about 73% of the expected distributable income for 1H19 to SGD as of March 31.

Such is an example of the manager’s active capital management approach which has helped to mitigate the impact of interest rate increase and exchange rate volatility on DPU, says Cindy Chow, CEO of the manager.

“MGCCT has reported a positive set of results for FY17/18. Through our proactive portfolio management efforts, the portfolio remains resilient with a high portfolio occupancy rate of 98.5%, as well as a healthy average rental reversion3 for each asset,” says Chow.

Looking ahead, the manager’s CEO expects the recently-approved acquisition of the Japan portfolio to be DPU-accretive, and to contribute a diversified and stable income stream to MGCCT.

See: MGCCT acquiring six properties in Japan for $753 mil; to be renamed Mapletree North Asia Commercial Trust

MGCCT’s distribution policy has been to distribute at least 90% of its distributable income on a semi-annual basis. Unitholders can receive a distribution of 3.767 cents for the period from Oct 1 to Mar 31, or 2H18, on Friday, May 25.

Units in MGCCT closed 3 cents lower at $1.13 on Wednesday.