Mapletree Pan Asia Commercial Trust (MPACT) has reported a distribution per unit (DPU) of 2.42 cents for the 3QFY2022/2023 ended Dec 31 2022, dampened by higher finance costs and unchanged from the year earlier period.
The year-to-date (YTD) DPU of 7.36 cents comprises the clean-up distribution of 3.04 cents per unit from Mapletree Commercial Trust (MCT) for the period from April 1 2022 to July 20 2022, paid on Aug 25 last year.
MPACT previously announced that it would be adopting a quarterly reporting framework starting with its results for the 3QFY2022/2023. Distributions to MPACT’s unitholders will also be on a quarterly basis from the 3QFY2022/2023 onwards.
The DPU of 2.42 cents will be paid on March 15.
During the 3QFY2022/2023, MPACT reported gross revenue of $239.5 million, up by 84.0% y-o-y, boosted by full quarter contribution from properties acquired through its merger with Mapletree North Asia Commercial Trust that was completed on July 21 2022 and increased contribution from its Singapore portfolio. Excluding the effect of the Merger, gross revenue was 5.9% or $7.6 million higher y-o-y.
Property operating expenses during the period increased by 109.4% y-o-y to $60.3 million from $28.8 million in 3QFY2021/2022, mainly due to the effect of the terger and higher expenses across all Singapore properties. MPACT also says that higher expenses were observed across all Singapore properties’ property operating expenses categories which moved in tandem with the increase in activities this year.
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Accordingly, 3QFY2022/2023 net property income (NPI) increased by 76.8% y-o-y to $179.4 million, with an NPI margin of 74.8%. Excluding the contribution from the merger, NPI increased by 2.1% y-o-y to $103.6 million.
For FY2022/2023 YTD, a total of close to 1.9 million square feet of net lettable area (NLA) was renewed or re-let. All markets except Greater China registered positive rental uplifts, with VivoCity and The Pinnacle Gangnam achieving respectable reversion rates of 7.9% and 14.2% respectively.
As at December 31 2022, the portfolio committed occupancy was 95.5%. The REIT’s weighted average lease expiry (WALE) for retail and office/business park leases was 2.1 years and 2.9 years respectively, translating into an overall portfolio WALE of 2.6 years.
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As at Sept 30, MPACT’s aggregate leverage stood at 40.2%. Its average term to maturity was 2.8 years.
“Global economic uncertainties have heightened and have affected overall leasing activities. Notwithstanding, we closed the quarter by locking in positive rental uplifts across all markets except Greater China, and achieved a healthy portfolio committed occupancy of 95.5%,” says Sharon Lim, CEO of the manager.
In Singapore, Lim says MPACT “demonstrated its strength” by delivering higher gross revenue and NPI during the quarter. “Our core asset, VivoCity, continued to ride on a positive momentum, registering 7.9% rental uplift on a YTD FY2022/2023 basis. Driven by strong festive
spending, 3QFY2022/2023 tenant sales reached $300.1 million, well surpassing pre-Covid levels.”
She adds that the asset enhancement initiatives (AEI) for Level 1 of VivoCity is on track for progressive opening from mid-2023, and will further enhance the shopping centre’s long-term competitiveness.
However, protracted Covid-19 restrictions in 2022 continued to affect MPACT’s properties in China and Hong Kong during the quarter. “Despite the challenges, our team pressed on with their rigorous leasing efforts and we successfully renewed the lease of our second largest tenant, BMW, for five years till 2028. At Festival Walk, 3QFY2022/2023 footfall and tenant sales continued to be impacted by the effects of shifts in Covid measures,” says Lim.
“Although headwinds remain in the near term, the vast lifting of Covid measures in Greater China and the long-awaited reopening of borders are expected to pave way for an eventual upturn,” she adds.
Lim says delivering long-term sustainable returns to MPACT’s unitholders remains her “utmost priority”. “Looking ahead, the operating environment is likely to remain rough with weaker global economic outlook, elevated energy prices and volatile interest rates. We will continue to forge ahead with our proactive asset management approach, implement measures to protect our financial well-being, and seize the right opportunities to achieve a balance of risks and costs.”
The REIT currently has total assets under management (AUM) of approximately $16.7 billion comprising 18 diversified and quality commercial assets across five key gateway markets of Asia.
Units in MPACT closed 1 cents lower or 0.55% down at $1.82 on Jan 31.