Mapletree North Asia Commercial Trust (SGX: RW0U)'s 2Q19 DPU grew 0.6%
The annualised yield and price to book ratio are 6.1% and 0.89 respectively
Net property income and distributable income grew 1.3% to $83.7m. The increase was mainly boosted by the higher rental income from Festival Walk and stronger HKD and JPY. However, the weaker RMB has partially offset its income.
The REIT's portfolio is very concentrated in terms of gross revenue:
Festival Walk - 62%
Gateway Plaza - 20%
Sandhill Plaza - 6%
Japan properties - 12%
The annualised yield is 6.1%. Both the stock price and DPUs of the REIT has been increasing since 2012. The REIT has been delivering growing DPUs over the years.
Source: reitscompass's REITs Insider ratings
Portfolio occupancy maintained high at 98.9%, with 16.2% of gross rental income is up for renewal next year. The portfolio leverage is currently at the healthy side of 37.1%. The interest cost is 2.49%, the good news is downside risk is hedged with 89% of the loans are on fixed rates.
It is currently trading at a price to book ratio of 0.89.
3. Growth Catalyst
Mapletree NAC Trust operates in various countries including China, Hong Kong and Japan, With the different economic conditions, it has a mixed outlook depends on the countries that it operates in.
Festival Walk in Hong Kong, also its largest property in terms of gross income will face some headwinds in the near future. The Hong Kong protest has negatively impacted retail sales. While it maintains a full occupancy currently, we might potentially see some dropouts moving forward.
The slow down in China economy and the increase in office supply will put some pressure on its properties in Beijing. However, its business park in Shanghai is expected to remain stable, boosted by new tech and IT firms.
The Tokyo office market will continue to outperform with low vacancy rates and long leasing period.
With its growing DPUs and prudent management, Mapletree NAC Trust is one of the S-REIT that we like. However, with the current market condition, we would put it under the watchlist until it is more favourable.
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