Mapletree NPI rose 14.3% to S$78.3m in Q1 FY21/22
This is attributed to the lower rental reliefs to retail tenants at Festival Walk and higher average occupancy from IXINAL Monzen-nakacho Building.
The net property income (NPI) of Mapletree North Asia Commercial Trust (MNACT) rose by 14.3% to S$78.3m from April to June, the first quarter of the fiscal year 2021/2022 (FY21/22).
Mapletree said the higher NPI can be traced to lower rental reliefs of S$4m granted to retail tenants at Festival Walk during the period, compared to the S$17.9m granted in the same period last year, according to MNACT Management Ltd.
This is due to the higher average occupancy from the IXINAL Monzen-nakacho Building. There was also a “maiden contribution” from Hewlett-Packard Japan Headquarters following MNACT’s acquisition on 18 June.
However, the increase was partly offset by lower average rental rates at Festival Walk and Gateway Plaza.
Gross revenue during the period reached S$103m, 10% higher than the S$93.7m in the same period last year.
Cindy Chow, CEO of the Manager, said the acquisition of Hewlett-Packard Japan is “expected to provide a stable income stream for MNACT and will enhance the resilience of MNACT’s portfolio.”
Chow also said they saw improving footfall and retail sales at the Festival Walk Mall as restrictive measures ease in Hong Kong due to the decline of infections, which resulted in lower rental reliefs granted during the first quarter.
“The repair works, arising from the damage incurred during the social incidents in Hong Kong SAR in November 2019, are continuing at the mall. We have extended rental reliefs to tenants affected by the repair works,” she said, adding that with rental reliefs granted and its impact on the revenue is expected to be reduced with the improvement of the COVID-19 situation and repair works targeted completion by end-2021.
“We also continued to have high occupancy levels across our office properties, notwithstanding the restrictive measures due to COVID-19,” she added.
Mapletree said the average renewal or re-let rental rate at Festival Walk mall is expected to be lower in FY 21/22 compared to the previous year due to the prolonged impact of the pandemic and the ongoing repair works. However, its impact on MNACT’s revenue is “expected to be moderated” by lower rental reliefs when the situation improves and the completion of the repairs.
“We will focus on keeping the mall’s occupancy high with the right mix of viable tenants so that Festival Walk is well-positioned for growth when the impact of COVID-19 recedes and the Hong Kong SAR economy recovers,” it said.
Meanwhile, the weak business outlook in Beijing affecting demand for office space and influx of supply from new office buildings are expected to continue to affect the performance of Gateway Plaza. Office properties in Shanghai, Greater Tokyo, and Seoul are expected to be resilient.
The company will target demand from growth industries and from sectors less affected by the pandemic such as technology, media and telecommunications, information technology, financial services, and bio-medical sectors.