SINGAPORE (Apr 24): The manager of Mapletree Commercial Trust (MCT) reported 4Q18 DPU to 2.27 cents, 0.4% higher than the DPU of 2.26 cents declared in 4Q17.
This brings FY18 DPU to 9.04 cents, 4.9% higher than the 8.62 cents declared a year ago.
Gross revenue rose 1.3% to $108.9 million from $107.5 million a year ago mainly due to the higher contribution from VivoCity, Mapletree Business City (MBC I) and Merrill Lynch HarbourFront (MLHF) offset by lower contribution from Mapletree Anson and PSA Building.
Revenue for VivoCity and MBC I was $0.6 million and $0.7 million higher than 4Q17 respectively mainly due to effects of the step-up rents in existing leases.
Higher rental income for VivoCity was also contributed by the completed asset enhancement initiatives (AEI) on Level 1, partially offset by downtime due to the AEI to add a public library on Level 3 and to extend Basement 1.
Revenue for MLHF was $0.5 million higher than 4Q17 mainly due higher occupancy and rental rates achieved.
Revenue for Mapletree Anson and PSA Building was $0.3 million and $0.2 million lower respectively mainly due to lower occupancy in 4Q18, partially offset by effects of the step-up rents in existing leases.
Property operating expenses widened 1.3% to $24.6 million mainly due to higher marketing and promotion expenses, staff costs and property taxes, offset by lower utilities expense
Accordingly, net property income rose 1.2% to $64.8 million.
The higher net property income was offset by higher finance expenses, manager’s management fees as well as unrealised foreign exchange loss.
Income available for distribution of $64.8 million for 4Q18 was marginally higher compared to $64.6 million for 4Q17.
Overall NPI margin was 77.4%. As at March 31, the committed occupancy of the portfolio was 98.4%.
Mapletree Commercial Trust Management says the medium term outlook for rents in Singapore is positive given tapering future supply as new office developments in the immediate horizon garner healthy pre-commitments.
On the demand end, there are selective signs of improving business confidence including those from the banking and professional services sectors.
The technology sector and flexible space operators, which had been supporting new office demand over the past two to three years, continue to exhibit strong expansionary appetite.
However, it remains to be seen if and for how long the office market can continue to rely on them given recent consolidation and M&A activities.
Units in MCT closed flat at $1.60 on Tuesday.
