Mapletree North Asia Commercial Trust

Units in Mapletree North Asia Commercial Trust (MNACT) fell 8.7% in the first half of the week to close at $1.16 on Nov 13, as its anchor asset Festival Walk shopping mall found itself caught in the middle of escalating violence in Hong Kong.

In 2QFY2020, the mall accounted for some 62% of the REIT’s total net property income.

Festival Mall was forced to close early on Nov 10, following skirmishes between Hong Kong protestors and police at the mall, which resulted in some injuries. The mall also closed early on Nov 11 and 12.

Festival Walk remained closed on Nov 13, after suffering “extensive damage” as protestors torched the office lobby and a Christmas tree in the mall on the night of Nov 12. Groups of protestors had also smashed the glass panels at entrances to the property and balustrades on various levels of the mall.

“We note that when the Hong Kong protests began in June, Festival Walk had been relatively unscathed from the various skirmishes across the city, which were largely confined to the streets,” says DBS Group Research lead analyst Derek Tan in a Nov 11 report, noting that Festival Walk has been the source of strong growth in cash flows for MNACT.

Following up on the report, Tan notes that investors have generally stayed cautious on MNACT.

“Given this fresh news, the stock will remain sideways for now. Value hunters may only come in towards the 7% yield handle, which is close to current levels,” says Tan in an email to The Edge Singapore on Nov 13. —