Mapletree Commercial Trust property, ARC, in Singapore (Photo: REITsWeek)Mapletree Commercial Trust property, ARC, in Singapore (Photo: REITsWeek)

Singapore-listed retail and office REIT, Mapletree Commercial Trust (SGX:N2IU), announced on 21 October that it has achieved gross revenue and net property income (NPI) of SGD71.2 million and SGD54.8 million respectively for its 2Q 15/16.

This represents a rise of 1.9% and 5.1 respectively compared to the corresponding period in the previous financial year. Accordingly distribution per unit (DPU) for the quarter rose by 2.5% to 2.02 Singapore cents.

“Operating expenses came in at 7.6% lower than the same period last year as the benefits of our efforts in cost management and improving operational efficiency continued into this financial year”, said Sharon Lim, CEO of the REIT’s manager.

“VivoCity closed the quarter with strong tenant sales and improved shopper traffic, affirming its position as the largest destination mall in Singapore”, she added. Shopper traffic at the property grew 3.1% in the quarter while tenant sales grew 5.5% on a year-on-year basis.

The REIT’s gearing as at 30 September is at 36.4% which is unchanged from the previous quarter while aggregate portfolio occupancy improved slightly to 96.6% from 95.7% previously.

Occupancy at PSA Building however dipped slightly to 93.4% from 95.4% previously. “Compared to the close to 100% occupancy in the same period last year, the resultant transitional vacancy from the expiring leases in the two office assets resulted in a decline in the office portfolio NPI in 1H FY15/16 by about 2.0%”, said the REIT in reference to both PSA Building and Mapletree Anson.

Portfolio weighted average lease expiry (WALE) is at 2.3 years.

“On the back of a slowing economy that narrowly avoided a technical recession, office demand eased considerably quarter-on-quarter to register a negative net absorption level that was last seen in Q4 2012”, said the REIT in a presentation on the quarter’s results. The REIT also cited data from CBRE which that indicate a growing vacancy of retail spaces in Singapore.

Unitholders Mapletree Commercial Trust can expect to receive the distribution on Friday, 4 December 2015 while closure of transfer books and register of unitholders has been set at 5.00 pm on Thursday, 29 October 2015. Units of the REIT last traded on the Singapore Exchange at SGD1.32.

By Ridzwan Rahmat

Ridzwan has been analysing REITs and business trusts since 2008, and personally manages a portfolio comprising mainly of SGX-listed REITs. He founded REITsWeek in 2013.