Mapletree’s VivoCity bucks sluggish retail trends with stellar shopper traffic growth in 2Q

Mapletree CT’s revenues climb 7%.

Despite declines in the country’s overall retail sales index, Mapletree Commercial Trust still recorded impressive results in the period from April-June 2014, with a 1Q15 revenue of S$69m (+7% y-o-y) and Net Profits Interest of S$52m (+10%).

According to a report by DBS, this was driven mostly by higher rent from VivoCity as the mall’s performance continues to defy retail trends with a 5% yoy growth in shopper traffic and a 4.9% growth in tenant sales.

“The Manager continued to refresh the mall’s tenant mix, bringing in the likes of Muji, Factorie, TYPO and Sacoor Brothers, and relocating existing tenants that subsequently took up smaller spaces. The Manager has indicated that tenants within the mall have been affected by the labour shortage and rising labour costs, however we believe that given the mall’s location and the landlord’s ability to keep the mall fresh and drive tenant sales, Vivocity should continue to see healthy leasing demand,” noted the report.

Here’s more from DBS:

MCT reported 1Q15 revenue of S$69m (+7% y-o-y) and NPI of S$52m (+10%). Income was attributable to higher rent from Vivocity and PSAB as positive reversions achieved in previous quarters began to flow through.

NPI margins also improved on the back of lower utilities costs and cost saving measures, translating to overall distribution income of S$41m (+13%) and DPU of 1.95Scts (+11%).

Reversions moderate, but tenant sales and traffic up. Of the total leases expiring in FY15, the Trust has committed 32% of leases at reversion rates of 16.2% for retail leases and 11.2% for office leases.

We understand that the bulk of these were from Vivocity and PSAB. For Vivocity, although reversions have moderated compared to previous quarters, the mall’s performance continues to defy retail trends – shopper traffic grew 5% and tenant sales grew 4.9% y-o-y, demonstrating the mall’s resilience even amid tepid growth in the overall retail sales index (RSI).

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