TIDMMPO
RNS Number : 9516H
Macau Property Opportunities Fund
30 March 2020
30 March 2020
Macau Property Opportunities Fund Limited
("MPO" or "the Company")
Update on the Impact of Coronavirus
Macau Property Opportunities Fund Limited announces the
following update on the impact of the Covid-19 coronavirus
subsequent to the announcement released in February.
Macau
On 20 February, the Macau government lifted its 15-day
suspension of casino operations. Whilst casino activity has
resumed, tight immigration restrictions remain in force, which
continue to impact the market. Visitor arrivals to Macau have
declined by 57% year on year (YoY) and gross gaming revenue (GGR)
has declined by 50% YoY during the first two months of this
year.
After nearly 40 days without new coronavirus infections, Macau
recorded its first new imported case in mid-March. Since then, the
government has tightened entry restrictions significantly. The
total number of confirmed cases in Macau stood at 33 as of 27 March
2020, with all of the most recent 23 cases being imported.
Meanwhile in mainland China, the first wave of the coronavirus
outbreak appears to be under control. Infection rates have reduced
and medical teams seconded to Hubei are returning to their home
cities. China is expected to lift outbound travel restrictions for
Wuhan from 8 April, after over two months of lockdown. Across China
authorities are cautiously starting to relax restrictions on
movement, whilst keeping a close eye on any new infection
outbreaks.
Macau Property Market
Residential property sales in Macau have dropped significantly
during the crisis, with only 21 transactions recorded during the
first half of February, compared to 154 transactions a year ago.
Average residential transaction prices have fallen approximately 7%
over the same period. As the virus situation stabilised,
transaction volumes improved, bringing the total number of
transactions to 208 for the entire month - down 25% YoY.
The occupancy rate at The Waterside currently stands at 47%,
down from 58% in our last report. This decline was entirely due to
the early termination of leases by tenants who were unable to
return from mainland China. Security deposits equivalent to
three-month rents have been forfeited in the Company's favour and
the apartments put back on the market for lease. Sentiment in the
leasing market has recently started to gradually improve with more
enquiries during March.
Financial Position
Macau's banking system remains robust and in response to the
crisis the authorities have lowered the base lending rate from 2%
to 0.86% to improve market liquidity. The reduction in the reserve
requirement ratio by the People's Bank of China (PBOC) has improved
liquidity for state-owned banks. Major banks in Macau have also
offered various emergency packages to support small and
medium-sized enterprises.
The US$11 million bank facility for The Fountainside that was
due to mature in early March, has been refinanced. Its term was
extended by four years and the interest rate was reduced by 20
basis points to 2.8% p.a. over 1, 2 or 3 month HIBOR. It also
included an additional US$0.9 million revolving facility to cover
potential costs related to alterations. The principal is to be
repaid in six semi-annual instalments, commencing 5 September
2021.
The Manager is also in advanced and constructive discussions
with banks in relation to the US$116 million credit facility for
The Waterside, with a view to refinancing principal repayments due
within 12 months. The outcome of these discussions will be
announced in due course.
MPO continues to adopt a prudent cash management strategy and
maintained approximately US$21 million aggregated cash balance as
of end of February. The Loan-to-value ratio (LTV) based on the 31
December 2019 valuation was 46%. The Manager and the Board closely
monitor the financial position of the Company to ensure sufficient
working capital as well as compliance with loan covenants.
Looking ahead
Market commentators were generally expecting local travel
restrictions to Macau to be eased in Q2 this year based on the
declining infection rates across Macau, Hong Kong and China. The
sudden increase in imported cases experienced since mid-March,
however, may delay any such relaxation. Only when infection rates
are believed to be under control in both Macau and China, will
restrictions likely be lifted, and only then will GGR start to
recover.
Macau's Health Bureau officials appear cautiously optimistic
about Macau infection rates, believing that new imported cases may
be peaking, and strict quarantine measures will help reduce
reinfection rates.
The Manager considers the health and safety of its employees and
their families to be of utmost priority. Its offices have been
operating normally with safe working practices in place through
these difficult times.
The Company will provide a further update when its Q1 Net Asset
Value announcement is issued.
- End -
About Macau Property Opportunities Fund
Premium listed on the London Stock Exchange, Macau Property
Opportunities Fund Limited is a closed-end investment company
registered in Guernsey and is the only quoted property fund
dedicated to investing in Macau, the world's largest gaming market
and the only city in China where gaming is legalised.
Launched in 2006, the Company targets strategic property
investment and development opportunities in Macau. Its current
portfolio comprises prime residential property assets.
The Company is managed by Sniper Capital Limited , an Asia-based
property investment manager with an established track record in
fund management and investment advisory.
Stock Code
London Stock Exchange: MPO
LEI
213800NOAO11OWIMLR72
For further information:
Manager
Sniper Capital Limited
Group Communications
Tel: +852 2292 6789
Email: info@snipercapital.com
Corporate Broker
Liberum Capital
Gillian Martin / Owen Matthews
Tel: +44 20 3100 2234
Company Secretary & Administrator
Estera International Fund Managers (Guernsey) Limited
Kevin Smith
Tel: +44 14 8174 2742
This information is provided by RNS, the news service of the
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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