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Sunday, April 25, 2021

Mapletree North Asia Commercial Trust Review @ 25 April 2021

Basic Profile & Key Statistics

Mapletree North Asia Commercial Trust (MNACT) invests in Office and Retail properties and owns 12 properties across China, Hong Kong, Japan and South Korea. 

Performance Highlight

Gross revenue, NPI, DI and DPU increased YoY by 39.7%, 41.4%, 8.8% and 1.9% respectively. The increase in both gross revenue and NPI is due to no income from Festival Walk mall from 13 November 2019 to 15 January 2020 and its office tower from 13 to 25 November 2019. If we include the Festival Walk capital top-up of S$ 32.9 million (which was subsequently reimbursed by insurance), then the YoY increase would be 13.7% and 8.3% for gross revenue and NPI.
Rental reversion is negative for Festival Walk and Gateway Plaza but positive for Sandhill Plaza and Japan properties. 
Both footfall and retail sales have recovered a lot in February and March. 

Related Parties Shareholding

  • REIT sponsor's shareholding is high at 37.36%
  • REIT manager's shareholding is high at 5.02%
  • Directors of REIT manager's shareholding is high at 0.18%

Lease Profile

  • Occupancy is slightly high at 97%
  • Income in SGD/Major Currencies is low at 25.9%.
  • WALE is short at 2.3 years
  • Highest lease expiry within 5 years is moderate at 29.1% which falls in FY22/23
  • Weighted average land lease expiry is short at 39.06 years (to be updated after release of annual report)

Debt Profile

  • Gearing ratio is high at 41.5%
  • Cost of debt is low at 1.99%
  • Fixed rate debt % is moderate at 73%
  • Unsecured debt % is moderate at 75%
  • WADM is slightly long at 3.12 years
  • Highest debt maturity within 5 years is low at 24% which falls in FY23/24
  • Interest coverage ratio is moderate at 3.7 times

Diversification Profile

  • Top geographical contribution is low at 46.8%
  • Top property contribution is high at 46.8%
  • Top 5 properties contribution is high at 92.1%
  • Top tenant contribution is low at 8% 
  • Top 10 tenants contribution is moderate at 35.7% 

Key Financial Metrics

  • Property yield is low at 3.6%
  • Management fees over distribution is low at 10.3% in which unitholders receive S$ 9.71 for every dollar paid 
  • Distribution on capital is low at 2.7%
  • Distribution margin is high at 53.7%


  • Uptrend - NAV per Unit
  • Slight Downtrend - Distribution Margin 
  • Downtrend - DPU, Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

  • Dividend Yield - Past 4 quarters DPU @ 6.175 cents / average yield @ 6.65% = S$ 0.93
  • Price/NAV - NAV @ S$ 1.27 x average P/NAV @ 0.84 = S$ 1.06

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow Income in SGD/Major Currencies
High Sponsor's ShareholdingShort WALE
High Manager's ShareholdingShort Weighted Average Land Lease Expiry
High Directors of REIT Manager's ShareholdingHigh Gearing Ratio
Low Cost of DebtHigh Top Property & Top 5 Properties Contributions
Well Spread Debt MaturityLow Property Yield
Low Top Geographical ContributionLow Distribution on Capital
Low Top Tenant ContributionDPU Downtrend
Competitive Management FeesInterest Coverage Ratio Downtrend
High Distribution MarginProperty Yield Downtrend
NAV per Unit UptrendDistribution on Capital Downtrend

With the recovery of footfall and retail sales for Festival Walk (which amount to more than 45% of GRI), MNACT performance should recover in the coming quarters. However, due to the resurgence of COVID-19 cases in Japan, the quasi-state of emergency restrictions was in place for Tokyo from 12 April and for Saitama, Chiba and Kanagawa from 20 April. These restrictions will remain in place until 11 May. The Manager mentioned that they would focus on tenant retention to maintain a high level of occupancy for the Japan properties.

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.

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