The manager of Mapletree North Asia Commercial Trust (MNACT) says its financial and operational performances have continued to be impacted by the ongoing Covid-19 outbreak, particularly in Hong Kong.
Earlier today, Hong Kong announced the ban of restaurant dine-ins, and gatherings of more than two people within the special administrative region (SAR).
Gross revenue fell 10.7% y-o-y to $93.7 million due to the $18.1 million of rental reliefs extended to its tenants. A bulk of it went mainly to the retail tenants at Festival Walk.
Finance costs in the quarter increased by $1.2 million mainly due to borrowings to partially fund the acquisitions of mBAY POINT Makuhari (MBP) and Omori Prime Building (Omori), which were acquired in February 2020.
Net profit income (NPI) consequently fell 19.5% y-o-y to $68.5 million.
The full-quarter contributions from MBP and Omori, buffered the decline in NPI, and further diversified MNACT’s income stream.
MNACT says the retail environment in Hong Kong for the quarter remained challenging due to the restrictive measures imposed due to the pandemic, and the consequent impact on the city’s economy.
MNACT’s office segment has also been affected by the weaker economic outlook from the continuing US-China geopolitical tensions and Covid in Beijing and Shanghai, while the Greater Tokyo market was partly affected by Covid-19 measures and work-from-home (WFH) arrangement, leading to slower leasing momentum.
As at June 30, the REIT’s occupancy level stood at 96.4%, with 43% of expiring leases by lettable area, renewed or re-let.
The manager says that it has adopted half-yearly announcement of financial statements since April 29, and has amended MNACT’s distribution policy to make distributions every half-yearly with effect from the beginning of FY20/21.
The next financial results and distribution will be for the six-month period ending September 30.
In its outlook statement, MNACT says in view of the uncertainties from Covid-19 and market volatilities, its performance for FY20/21 is expected to be lower than that of FY19/20. It says it will continue to explore accretive acquisitions in the North Asia market to grow and diversify its portfolio.
Units in MNACT closed 2 cents lower, or 2.2% down, at 88 cents.
