Mapletree North Asia Commercial Trust (SGX: RW0U) or MNACT is a Singapore-based commercial real estate investment trust (REIT) with nine properties in China, Hong Kong, and Japan. There are two things to know about the REIT right now: its latest financial performance and valuation.
Here is a table showing important items from MNACT’s financial performance for the financial year ending 31 March 2019 (FY18/19).
Source: MNACT Result Presentation
The above is a table from MNACT latest earnings update.
Overall, all metrics improved on a year-on-year basis. The strong performance was due to new acquisitions, higher occupancy rates and positive rental reversions.
Cindy Chow, chief executive of the REIT’s Manager, said:
“The Manager’s proactive asset and capital management of the portfolio, together with the addition of the Japan Properties, have contributed to a steady year-on-year DPU growth for FY18/19. We are mindful of potential uncertainties in the year ahead, with the ongoing trade tensions and a slowing global economy. Nevertheless, we remain committed to do our best to weather these conditions and deliver sustainable value for the Unitholders.”
As of 31 March 2019, the REIT’s gearing and committed occupancy rate stood at 36.6% and 99%, respectively.
There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.
The table below shows MNACT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 39 REITs that are in Singapore’s stock market.
Source: Source: Yahoo Finance, OCBC Weekly S-REITs Tracker
We can see that MNACT’s valuation is at a premium to the market average due to its low distribution yield. Meanwhile, its PB ratio is comparable to the market average.
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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.