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Macau Property results reflect weak gambling market

Macau Property Opportunities Fund has published its results for the six month period ended 31 December 2015. MPO’s portfolio value declined 12.3% over the period to US$405.7 million amid the slowdown in Macau’s economy driven by a weak gambling market which affected the property market. The adjusted NAV was US$245.5 million, translating to a per share value of US$3.21 (218 pence), a decline of 19.1% since 30 June 2015. The IFRS NAV fell 25.7% during the period to US$115.5 million or US$1.51 per share. The discount (to Adjusted NAV) widened from 17% to 28%, based on the Fund’s share price of 157 pence at period end.

Cash balances stood at US$20.7 million at period end, of which US$3.2 million was pledged as collateral for MPO’s debt facilities. The Fund’s loan-to-value ratio was 39% as at 31 December 2015. Overall debt stood at US$165 million.

At The Waterside (luxury residential) the occupancy level dipped to 41% from 44% six months earlier (hitting a low of 33% in September), due mainly to leasing pressures in the luxury segment. As at period end, average monthly rental rates were HK$22.95 (US$2.90) per square foot.

At The Fountainside (low-density residential) they completed the handover for 26 pre-sold units. Total income generated from the sales, including parking lots, amounts to HK$224.5 million (US$28.9 million).

At their luxury private home, Estrada da Penha, work continued to reposition the site’s original two residential properties into a single luxury residence.

Lastly, at Senado Square (prime retail) they are awaiting the issuance of a new Urban Condition Plan. They say the protracted delay in securing planning has been unwelcome, but the site remains one of the best performing assets in the portfolio. They continue to believe that this property will yield high values based on increasing demand for modern retail facilities in Macau’s prime shopping district.

MPO : Macau Property results reflect weak gambling market

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