SINGAPORE (Nov 25): November threw up some surprises for followers of real estate in vestment trusts. The outperformer month-to-date is Sasseur REIT, which had traded at or below its IPO price of 80 cents for most of the time since its listing in March last year. In 3QFY2019, its distributable income rose 7.2% y-o-y to $19.6 million, and distribution per unit increased 6.4% y-o-y to 1.64 cents. Its net asset value is 84.99 cents, 6.2% higher since IPO. Sasseur REIT has been trading at 80 cents since April this year, but moved above this level at end October.
Sasseur REIT owns four outlet malls, one each in Chongqing, Bishan, Hefei and Kunming. Anthony Ang, CEO of Sasseur REIT’s manager, says sales for the three months to Sept 30 picked up, owing to anniversary sales at one of the malls. “With the year-end holiday season and schedule of sales events that have been lined up, we look forward to even stronger sales for the last quarter of 2019. Our outlets in China have not been impacted by external trade factors, as sales are largely fuelled by domestic consumption.”
The worst performer so far this month is Mapletree North Asia Commercial Trust. Festival Walk, a mall in Hong Kong, is MNACT’s largest asset, contributing 62% to net property income and accounting for 62% of the trust’s portfolio value of $7.7 billion. In 1HFY2020, the six months to Sept 30, MNACT reported NPI of $169.8 million, up 5.8% yo--y, distributable income of $123.8 million (up 5.3% y-o-y) and DPU of 3.887 cents (up 2.1% y-oy).
On Nov 12, Festival Walk was affected by Hong Kong’s protests and had to be closed for repairs. “Due to the extensive damage incurred, recovery works, including the clean ing up of debris and the assessment of repair works required, are ongoing. Festival Walk remains closed until further notice, and the manager will provide further updates in due course,” MNACT’s manager says in an announcement. “We are assisting and working closely with our tenants, as the mall is not operational,” it adds.
On Nov 21, Moody’s Investors Service announced that it had changed its Baa1 rating outlook on MNACT to negative from stable. “The change in outlook to negative reflects the uncertainty surrounding the earnings and operating performance of MNACT’s largest asset, Festival Walk, which has been closed, following extensive damage caused by protests in Hong Kong,” says Jacintha Poh, a Moody’s vice-president and senior credit officer. While Festival Walk is covered by insurance for damage and loss of income, uncertainty exists around the extent of coverage and the operating performance of the mall after reopening, she adds.
