Mapletree North Asia Commercial Trust - CGS-CIMB Research 2021-07-27: Challenging Quarter

MAPLETREE NORTH ASIA COMM TR (SGX:RW0U) | SGinvestors.io MAPLETREE NORTH ASIA COMM TR (SGX:RW0U)

Mapletree North Asia Commercial Trust - Challenging Quarter

  • Mapletree North Asia Commercial Trust's 1QFY22 gross revenue and NPI broadly in line at 25.8%/25.3% of our FY22 forecast.
  • Stable Japan and Seoul performance dragged by weaker FW and GW.
  • Reiterate ADD with a lower DDM-based target price of S$1.12.



MNACT's 1QFY22F business update highlights

  • In its 1QFY22 (Apr 2021 to Jun 2021) business update, Mapletree North Asia Commercial Trust (SGX:RW0U) reported gross revenue and NPI of S$103m/S$78.3m, +10%/+14.% y-o-y. The improvement was broadly in line with our expectations and reflects the impact of lower rental relief of S$4m (vs. S$17.9m in 1QFY3/21) and higher occupancy at IXINAL Monzen-nakacho Building in Japan. This was partly offset by lower rents at Festival Walk (FW) and Gateway Plaza (GW).
  • Portfolio occupancy ticked up slightly q-o-q to 97.4%.
  • Mapletree North Asia Commercial Trust’s leverage ratio stands at 41.8% at end-1Q with interest cover of 4x. With an optimal target gearing of up to 45%, Mapletree North Asia Commercial Trust has ample debt headroom to tap into inorganic growth opportunities.


Weak rental reversions at Festival Walk (FW) on cautious outlook and repair works

  • Gross revenue at Festival Walk (FW) grew by 18.4% y-o-y to S$51.5m, boosted by lower rent reliefs. Retail sales and shopper traffic at FW expanded 17.8%/29.8% in 1Q as HK SAR retail sales recovered due to the easing of restrictive measures. While occupancy remained fairly stable at 99.8%, leasing repair works and cautious retail environment. Mapletree North Asia Commercial Trust also plans to continue rejigging its tenant mix to increase the proportion of F&B offerings to boost shopper footfall and tenant sales in the mall.


Stable Japan and Seoul performance but weak performance at GW

  • Softer demand compounded by ample tenant to retain its expansion in the property.
  • In addition to small maiden contributions from the newly-acquired HP Japan building, the Japan and Seoul office portfolio maintained a high occupancy of 98.2%/95.7% while reversions were fairly stable.


Reiterate ADD rating






LOCK Mun Yee CGS-CIMB Research | EING Kar Mei CFA CGS-CIMB Research | https://www.cgs-cimb.com 2021-07-27
SGX Stock Analyst Report ADD MAINTAIN ADD 1.12 DOWN 1.150



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