Mapletree North Asia Commercial Trust DPU Fell 13.3%

Mapletree North Asia Commercial Trust DPU Fell 13.3%

Mapletree North Asia Commercial Trust has announced their 3QFY19/20 financial results on 17th January 2020. As expected, gross revenue fell 36.3% to S$67.3m as compared to S$105.6m in 3QFY18/19. Net Property Income also fell 40% to S$50.8m. Distribution fell 13.3% to 1.671 cents. The DPU already included the distribution top up due to Festival Walk closure. Without the top up, the DPU can be worst.

Due to the damages from the riots, Festival Walk has been closed since 13 November 2019. With the mall closure, rental was not collected from the retail tenants. The mall has re-opened and collection of rental resume on 16th January 2020.

3QFY19/20 Financial Results

3QFY19/20
(S$’000)
3QFY18/19
(S$’000)
Change
Gross Revenue 67,277 105,626 (36.3)%
Net Property Income 50,776 84,592 (40.0)%
Distributable Income 53,379 61,006 (12.5)%
Distribution Per Unit (“DPU”) (cents) 1.671 1.927 (13.3)%

Occupancy Rates

Mapletree North Asia Commercial Trust DPU Fell 13.3%

As of 31st December 2019, overall portfolio occupancy stood at 96.3%. What surprises me was that occupancy for Festival Walk stood at 100% even though the mall was damaged by the riots.

Debt

Aggregate leverage stood at 37.1%.

Distribution Per Unit

Mapletree North Asia Commercial Trust DPU Fell 13.3%

It is extremely hard to forecast the distribution yield due to the distruption of DPU in 3QFY19/20. Based on the closing price of S$1.24 on 21st January 2020 and an estimated FY19/20 annualized DPU of 7.229 cents (1.95+1.937+1.671+1.671), this translate to a dividend yield of 5.83%.

Summary

At the current price of S$1.24, my opinion is that it is too risky to enter given my estimated dividend yield of 5.83%. Nobody knows but things can get worst or better. If you have not noticed, given the weak occupancy at Gateway Plaza, Sandhill Plaza and its recently acquired Japan properties, I do not think its advisable to jump onto the wagon right now just because news of Hong Kong riots have pushed the share price down.

I currently do not own any shares of Mapletree North Asia Commercial Trust. However, my preferred entry price will be S$1.16 and below for an estimated dividend yield of at least 6.20%.

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