SINGAPORE (Oct 24): Mapletree Greater China Commercial Trust (MGCCT) on Monday announced 1H17 DPU increased 2.9% to 3.714 cents.
The improvement was driven by higher rents at Festival Walk (FW), lower accrued revenue for Gateway Plaza (GP) owing to uncertainty in VAT rate applicable in previous quarter and stronger HKD against SGD, causing gross revenue in 1H17 to increase 5.4% to $177 million.
See: Mapletree Greater China Commercial Trust posts 2.9% rise in 1H DPU of 3.714 cents
In a Tuesday report, OCBC is maintaining its “buy” call on MGCCT with a target price of $1.28.
Analyst Andy Wong Teck Ching says that the REIT portfolio of properties continued to show resilience and positive rental reversions.
Positive rental reversions were also achieved across all three assets, coming in at 11% for FW (retail component), 10% for GP and 14% for Sandhill Plaza (SP).
On the other hand, CIMB is downgrading the REIT to “hold” from “add” with a higher target price of $1.20.
Analyst Lock Mun Yee says, “With improved consumer sentiment and retail sales in HK, we anticipate FW to enjoy positive rental performance for its upcoming renewals.”
However, gross proift for GW has been hit by softer office demand due from foreign companies and rising new supply in Beijing.
Hence, Lock expects any rental growth for GW to be anaemic.
Meanwhile, outlook for Sandhill Plaza (SP) remains upbeat as it has gained a 14% uplift in renewals YTD and restoration in occupancy back to 100%.
However, the analyst says MGCCT’s near term outperformance may be limited as there are limited acquisition prospects and moderate organic rental growth outlook.
As at 11.05am, units in MGCCT are trading 1 cent higher at $1.22.
