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10 Quick Things Investors Should Know About Mapletree Greater China Commercial Trust’s Latest Earnings

Last week, Mapletree Greater China Commercial Trust (SGX: RW0U) — or MGCCT — released its 2017/18 fourth quarter (4Q FY17/18) earnings update.

As a quick introduction, MGCCT has properties in China and Hong Kong. It currently has three properties in its portfolio, namely Festival Walk, Gateway Plaza, and Sandhill Plaza.

Here are nine things investors should know about MGCCT’s latest results:

  1. Gross revenue for the reporting quarter declined 5.5% to S$89.6 million while net property income was down by 6% at S$72.9 million.
  2. The REIT’s distribution per unit (DPU) was down by 2.8% year-on-year to 1.904 cents.
  3. Based on MGCCT’s 2017/18 full year DPU of 7.481 and its closing unit price of S$1.15 as of 27 April 2018, the REIT has a trailing distribution yield of 6.5%.
  4. As of 31 March 2017, the REIT’s gearing stood at 36.2%, which is a safe distance from the regulatory ceiling of 45%.
  5. The REIT’s portfolio had a committed occupancy rate of 98.5% at end of the quarter.
  6. The weighted average lease expiry (by gross rental income) was at 2.6 years as of 31 March 2018. 49.6% of the leases will expire by FY19/20, 28.8% of the leases will expire in the following two years whilst the rest will expire after FY22/23.
  7. Festival Walk’s footfall was up by 3.2% in FY17/18 as compared to FY16/17. Similarly, tenant sales was up by 7.4% in FY17/18 as compared to FY16/17.
  8. The average rental reversion in FY17/18 were up for all three properties with Festival Walk, Gateway Plaza and Sandhill Plaza reported positive reversion of 11%, 8%, and 15%, respectively, as compared to FY16/17.
  9. The acquisition of the Japan Portfolio (valued at S$782.8 million) was approved at the Extraordinary General Meeting held on 24 April 2018.
  10. Here are the comments from the REIT about its outlook:

Festival Walk:

“For Festival Walk, gross revenues in HKD are expected to grow moderately, in line with the improvement in the overall Hong Kong retail sales market. The average rental reversion for those leases expiring in FY2018/2019 is expected to grow at a moderate pace.”

Gateway Plaza:

“……in the Lufthansa Area, where Gateway Plaza is located, there are few new office buildings and occupancy levels remain relatively high. Average rental reversion for leases expiring in FY2018/2019 at Gateway Plaza is expected to grow modestly.”

Sandhill Plaza:

“Demand for business park office space in Shanghai is driven by the technology and finance sectors. In view of the stable demand for business park space in Shanghai, Sandhill Plaza is expected to continue to benefit from a healthy rental reversion for its leases expiring in FY2018/2019.”

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.