Mapletree Greater China Commercial Trust ("MGCCT") has just released their full year results for the FY15/16.
The main take away from the results is that there has been a record 10.8% DPU growth, resulting in the full Distribution per Unit (“DPU”) of 7.248 cents for FY15/16. This gives an approximate yield of 7.6% (Based on the closing price of $0.955 - on 31-MAR).
FY15/16 gross revenue grew 19.7% to S$336.6 million compared to FY14/15, while net property income (“NPI”) rose 21.0% to S$277.5 million compared to FY14/15. The year-on-year growth in revenue and NPI was mainly due to strong rental uplifts from both Festival Walk and Gateway Plaza, additional income contribution from Sandhill Plaza.
So here are the take-aways:
Mapletree Greater China Trust has grown its net property income (NPI) from $229.3 million in FY2014 to $277.5 million in FY2015. Distributions per unit (DPU) have grown in tandem over the same period from 6.543 cents to 7.248 cents.
The acquisition of Sandhill Plaza (Office) in June 2015 has helped to increase Unitholders value, provide diversity of income source and reduce concentration risk within the retail business segment. Its favourable location within the Shanghai Free Trade Zone and the Chinese government's intention to boost technology and innovation, will also help to drive and sustain demand for its tenancy.
Occupancy rates in all 3 properties continue to remain high, amid the challenging landscape of the retail industry, underlined by the modest growth in China.
Another point to note is that the Portfolio has a Weight Average Lease Expiry (WALE) of about 2.6 Years by Gross Rental Income. With both China and Hong Kong's economy expected to grow, albeit at a slower pace, we can expect that rental revisions and growth to also moderate.
Following the portfolio revaluation, MGCCT’s aggregate leverage improved from 41.4% as of 31 December 2015 to 39.5% as at 31 March 2016. Faced with the uncertainty of rising Interest Rates, Interest costs on 77% of MGCCT’s debt had been fixed, limiting the impact of increases in interest rates on DPU.
The average all-in cost of debt was 2.83% as at 31 March 2016, an increase from 2.67% as at 31 December 2015. The increase in cost of debt is a point that Unitholders should monitor closely, especially since the leverage for MGCCT is relatively high at close to 40%.
FY15/16 gross revenue grew 19.7% to S$336.6 million compared to FY14/15, while net property income (“NPI”) rose 21.0% to S$277.5 million compared to FY14/15. The year-on-year growth in revenue and NPI was mainly due to strong rental uplifts from both Festival Walk and Gateway Plaza, additional income contribution from Sandhill Plaza.
So here are the take-aways:
1. Steady growth in NPI and DPU
Mapletree Greater China Trust has grown its net property income (NPI) from $229.3 million in FY2014 to $277.5 million in FY2015. Distributions per unit (DPU) have grown in tandem over the same period from 6.543 cents to 7.248 cents.
2. Yield Accretive Acquisitions
The acquisition of Sandhill Plaza (Office) in June 2015 has helped to increase Unitholders value, provide diversity of income source and reduce concentration risk within the retail business segment. Its favourable location within the Shanghai Free Trade Zone and the Chinese government's intention to boost technology and innovation, will also help to drive and sustain demand for its tenancy.
3. High Occupancy Rates
Occupancy rates in all 3 properties continue to remain high, amid the challenging landscape of the retail industry, underlined by the modest growth in China.
Another point to note is that the Portfolio has a Weight Average Lease Expiry (WALE) of about 2.6 Years by Gross Rental Income. With both China and Hong Kong's economy expected to grow, albeit at a slower pace, we can expect that rental revisions and growth to also moderate.
4. Debt
Following the portfolio revaluation, MGCCT’s aggregate leverage improved from 41.4% as of 31 December 2015 to 39.5% as at 31 March 2016. Faced with the uncertainty of rising Interest Rates, Interest costs on 77% of MGCCT’s debt had been fixed, limiting the impact of increases in interest rates on DPU.
The average all-in cost of debt was 2.83% as at 31 March 2016, an increase from 2.67% as at 31 December 2015. The increase in cost of debt is a point that Unitholders should monitor closely, especially since the leverage for MGCCT is relatively high at close to 40%.
Summary
Net Asset Value ("NAV") Per Unit as at 31-MAR-16 stands at $1.239, an increase of 3.4% Y-o-Y.
With the announcement of the results, MGCCT has declared a total of 3.771 cents:
(a) distribution out of tax-exempt income (the “tax-exempt income component”) of 3.096 cents (SGD); and
(b) distribution out of capital (the “capital component”) of 0.675 cents (SGD).
(a) distribution out of tax-exempt income (the “tax-exempt income component”) of 3.096 cents (SGD); and
(b) distribution out of capital (the “capital component”) of 0.675 cents (SGD).
Unitholders will qualify for the distribution as long as they hope the share till 5PM, 5 May 2016. Distributions will then be paid on Friday, 27 May 2016.
My REIT portfolio consists of 35,000 shares in MGCCT, which will translate to a healthy dividend of SGD $1319.85. I look forward to receiving dividends from this counter!
Yours,
