Mapletree Greater China Commercial Q4 NPI down 6% to $72.86m

Revenue fell due to the reversal in VAT for Gateway Plaza.

Mapletree Greater China Commercial Trust's (MGCCT) net property income (NPI) slipped 6% YoY from $77.48m to $72.86m in the fourth quarter of 2017.

According to its financial statement, gross revenue dipped 5.5% to $89.55m due to the reversal in Q4 last year of VAT payable previously assumed at a higher rate for Gateway Plaza. "The reversal followed from the clarification obtained in March 2017 from the local tax authorities on the applicable VAT rate and implementation process," MGCCT explained.

Revenue was also weighed down by the lower rate of the HKD against the SGD. However, it was offset by revenue growth from Festival Walk and Gateway Plaza as a result of higher rent rates.

Distributable income (DI) fell 1.7% YoY from $54.76m to $53.82m, whilst distribution per unit (DPU) slid down 2.8% from 1.95 cents to 1.9 cents.

For the full year, revenue rose 1.3% to $355.03m whilst NPI edged up 0.5% to $287.15m. Property operating expenses rose by 4.4% to $67.9m due to higher property tax incurred at Gateway Plaza as a result of the change in the basis of assessment of property tax, increase in property tax due to higher revenue, and higher property and lease management fee in line with the growth in revenue.

MGCCT acquired six freehold commercial properties located in Tokyo, Chiba, and Yokohama, located in well-established commercial hubs and have good building specifications. "At a high average occupancy rate of 99.9%, the Japan Portfolio is underpinned by leases with a long WALE of 5.8 years and a quality tenant base of 21 tenants," the trust added.

It also noted that the enlarged portfolio is expected to benefit from tenant, sector, and geographical diversification.

Subject to and upon completion of the proposed acquisition, MGCCT will be renamed “Mapletree North Asia Commercial Trust.”

“The manager will continue to focus on active asset management of the enlarged portfolio and proactive capital management, as well as the pursuit of accretive acquisitions to deliver sustainable returns to our Unitholders,” MGCCT concluded.