MGCCT’s net property income surges 21% to $277.5m in FY16

Thanks to Festival Walk, Gateway Plaza’s solid rental uplifts.

Mapletree Greater China Commercial Trust (MGCCT)’s FY16 net property income climbed 21% YoY to $277.5m, thanks to robust rental uplifts from Festival Walk (FW) and Gateway Plaza (GP).

According to a report by OCBC, MGCCT also enjoyed additional income contribution from Sandhill Plaza (SP), and the appreciation of HKD and RMB against SGD. However, the increases were partially offset by higher finance costs and management fees.

MGCCT’s FY16 DPU jumped 10.8% to 7.248 S cents while gross revenue accelerated 19.7% to $336.6m. For Q4, DPU surged 10.4% YoY to 1.923 S cents on back of a 15.2% spike in gross revenue to $87.8m.

Further, MGCCT posted strong rental reversions of 37% at Festival Walk’s retail segment and 25% for Gateway Plaza’s office segment in Q1. 

Of its three properties, FW and SP are fully occupied, while GP’s occupancy was high at 96.8%. This put overall portfolio occupancy at 98.6%, which OCBC asserts is relatively stable from end Dec 2015’s 98.7%.

Meanwhile, tenant sales and shopper traffic at FW fell 5.3% and 3.3% to HK$5.3b and HK$40.4m for FY16, respectively. Besides industry headwinds, this decline can be attributed to ongoing renovation by a new cinema operator at the mall, with operations slated to begin June this year. 

Moreover, a combination of lower total borrowings and increased total assets on a sequential basis, MGCCT’s aggregate leverage ratio eased 41.4% as at 31 December 2015 to 39.5%.

“Looking ahead, MGCCT has already hedged more than 70% of its expected distributable income for 1HFY17 (comprising both HKD and RMB), a reflection of management’s prudent approach,” reports OCBC.