Mapletree North Asia Commercial Trust : FY21/22 Financial Results - Financial Statements

(Constituted in the Republic of Singapore pursuant to a Trust Deed dated 14 February 2013 (as amended))

MAPLETREE NORTH ASIA COMMERCIAL TRUST UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SECOND HALF YEAR FROM 1 OCTOBER 2021 TO 31 MARCH 2022 AND FINANCIAL YEAR FROM 1 APRIL 2021 TO 31 MARCH 2022 AND DISTRIBUTION ANNOUNCEMENT

TABLE OF CONTENTS

Item No.	Description	Page No.
- - 1.1 1.2 1.3 1.4 1.5 2 3 4 5& 6 7& 8 9 10 11 12 & 13 14 15 16 17 & 18 19 20 21	Summary of Results of Mapletree North Asia Commercial Trust Group Introduction Consolidated Statement of Profit or Loss, Statement of Comprehensive Income and Distribution Statement Statements of Financial Position Consolidated Statement of Cash Flows Statements of Movements in Unitholders' Funds Details of Any change in Units Notes to the Condensed Interim Consolidated Financial Statements Total Number of Issued Units Sales, Transfers, Cancellation and/or Use of Treasury Units and Subsidiary Holdings Audit statement Changes in Accounting Policies Review of Performance Variance from Previous Forecast / Prospect Statement Outlook and Prospects Distributions General mandate relating to interested person transactions Confirmation pursuant to Rule 720(1) of the Listing Manual Confirmation pursuant to Rule 704(13) of the Listing Manual Breakdown of Revenue and Profits after tax Breakdown of Total Distributions Additional information required pursuant to Rule 706A of the Listing Manual Confirmation by the Board	2 3 5 8 10 12 15 16 25 25 25 25 26 31 32 33 33 33 34 34 34 35 35

1

Summary Results of Mapletree North Asia Commercial Trust ("MNACT") Group

FY21/22 1	FY20/21 2	Variance %	2H FY21/22 1	2H FY20/21 2	Variance %
Gross revenue (S$'000)	426,676	391,415	9.0	211,235	201,316	4.9
Net property income (S$'000)	321,941	292,040	10.2	160,062	152,300	5.1
Distributable income (S$'000)	239,219	210,150	13.8	119,686	113,318	5.6
Distribution per unit (cents) 3	6.819	6.175	10.4	3.393	3.299	2.8

Footnotes:

• 1) Financial year from 1 April 2021 to 31 March 2022 ("FY21/22") and period from 1 October 2021 to 31 March 2022 ("2H FY21/22")

• 2) Financial year from 1 April 2020 to 31 March 2021 ("FY20/21") and period from 1 October 2020 to 31 March 2021 ("2H FY20/21")

• 3) MNACT has amended its distribution policy to make distributions on a half-yearly basis starting from 1H FY20/21. Consequently, DPU for FY21/22 is calculated based on the income available for distribution for 1H and 2H FY21/22 over the number of units in issue as at the end of each period of 3,488,854,672 units and 3,527,974,156 units respectively. The number of units in issue as at the end of 2H FY21/22 does not include the payment of Manager's base fee and the property manager's management fees (collectively known as "Fees") in units of 11,591,728 for 2H FY21/22. The units for payment of Fees for 2H FY21/22, to be issued in April 2022, will be included in the computation of the DPU payable for the 1st half of the next financial year.

Introduction

Mapletree North Asia Commercial Trust1 ("MNACT") was constituted in the Republic of Singapore pursuant to a Trust Deed dated 14 February 2013 (as amended). MNACT was listed on Singapore Exchange Securities Trading Limited ("SGX-ST") on 7 March 2013 (the "Listing Date") as a real estate investment trust. The principal investment strategy of MNACT is to invest, directly or indirectly in the Greater China region, Japan and South Korea, in a diversified portfolio of income-producing real estate which is used primarily for commercial purposes (including real estate used predominantly for retail and/or offices), as well as real estate-related assets.

The current portfolio of MNACT comprises thirteen commercial properties in China, in Hong Kong SAR, Japan and South Korea, with a total lettable area of 5.9 million square feet. Their total book value2 is S$8,267.1 million as of 31 March 2022:

(a) Festival Walk, a landmark territorial retail mall and lifestyle destination with an office component in the Kowloon Tong area of Hong Kong. Festival Walk has been consistently ranked as one of the top ten shopping malls in Hong Kong (acquired on listing date);

(b) Gateway Plaza, a premier Grade-A office building with a retail podium located in the established and prime Lufthansa Area in Beijing, China (acquired on listing date);

(c) Sandhill Plaza, a premium quality business park development located at Zhangjiang Hi-tech Park, within the Pudong New Area, Shanghai, China (acquired on 17 June 2015);

• (d) Properties in Japan, with good-quality specifications (collectively, the "Japan Properties"):

  • - Six office buildings, comprising three office buildings in Tokyo (IXINAL Monzen-nakacho Building, Higashi-nihonbashi 1-chome Building, and TS Ikebukuro Building); an office building in Yokohama (ABAS Shin-Yokohama Building); and two office buildings in Chiba (SII Makuhari Building and Fujitsu Makuhari Building) (acquired on 25 May 2018);

  • - two office buildings, mBAY POINT Makuhari ("MBP") located in Chiba and Omori Prime Building ("Omori") located in Tokyo (acquired on 28 February 20203); and

  • - one office building, Hewlett-Packard Japan Headquarters Building ("HPB") located in Tokyo (acquired on 18 June 20216)

• (e) 50% interest in The Pinnacle Gangnam, a high quality office building located at Gangnam-gu in

Seoul, South Korea (acquired on 30 October 2020).4,5

All these properties enjoy excellent connectivity via convenient access to major roads, expressways and subway lines, with quality tenants operating across diversified trade sectors.

Mapletree North Asia Commercial Trust Management Ltd. ("MNACTM" or the "Manager") aims to deliver stable and steady DPU growth to Unitholders, through actively managing and enhancing the properties, acquiring good quality income-producing commercial assets aligned with MNACT's investment mandate, and having in place an active capital management strategy to manage both interest rate and foreign exchange volatility. The Manager monitors MNACT's cash flow position and working capital requirements to ensure adequate reserves and liquidity to meet its financial obligations. The Manager also actively refinances MNACT's financial obligations so as to manage the debt maturity profile.

• 1 Formerly known as Mapletree Greater China Commercial Trust.

• 2 Includes MNACT's 50.0% effective interest in The Pinnacle Gangnam.

• 3 Please refer to MNACT's SGX-ST Announcement dated 28 February 2020 titled "Issuance of Transaction Units to Sponsor's

Nominee, and Completion of Acquisition of Two Office Properties in Greater Tokyo and Use of Proceeds".

4 Please refer to MNACT's SGX-ST Announcement dated 25 September 2020 titled "Acquisition of 50.0% Interest In an Office Building Known As "The Pinnacle Gangnam" Located In Seoul, Korea; (B) Manager To Waive Entitlement To Performance Fees".

• 5 Please refer to MNACT's SGX-ST Announcement dated 25 September 2020 titled "Expansion of Investment Mandate".

• 6 Please refer to MNACT's SGX-ST Announcement dated 18 June 2021 titled "Completion of acquisition of an office property in greater Tokyo and use of proceeds".

Introduction (continued)

MNACT's distribution policy is to distribute at least 90.0% of its distributable income on a quarterly basis. Following the amendments to Rule 705 of the Listing Manual of the Singapore Exchange Securities Trading Limited on the quarterly reporting framework which took effect from 7 February 2020, MNACT has announced financial statements on a half-yearly basis with effect from the financial year from 1 April 2020 to 31 March 2021 ("FY20/21"). Consequently, MNACT has also amended its distribution policy to make distributions on a half-yearly basis.

Notwithstanding the above, the Manager will continue its proactive engagement with unitholders through various communication channels, including providing relevant and material updates between the announcements of half-yearly financial statements, through SGX announcements.

Distribution Reinvestment Plan ("DRP")

The Distribution Reinvestment Plan will be suspended from and including the 2H FY21/22 Distribution onwards. Unitholders will receive their 2H FY21/22 Distribution in cash.

Valuation of Investment Properties

Valuations of properties in MNACT's portfolio are conducted annually in accordance with the requirements under Appendix 6 of the Code on Collective investment Schemes ("Property Fund Appendix").

Accordingly, the investment properties in the balance sheet are stated at fair value based on the portfolio valuation as of 31 March 2022. The resultant net revaluation loss of S$215.4 million as of 31 March 2022 is recognised in the Statement of Profit and Loss (Please refer to Paragraph 9(a) for the gain/loss recorded for each investment property).

Proposed Merger with Mapletree Commerial Trust ("MCT") to Form Mapletree Pan Asia Commercial REIT ("MPACT")

Mapletree Commercial Trust Management Ltd., as manager of Mapletree Commercial Trust ("MCT" and as manager of MCT, the "MCT Manager"), and Mapletree North Asia Commercial Trust Management Ltd., ("MNACT" and as manager of MNACT, the "MNACT Manager"), jointly announced the proposed merger of MCT and MNACT (the "Merger") on 31 December 2021 and 21 March 2022 to create a flagship commercial REIT positioned to be the proxy to key gateway markets of Asia.

The Merger will be effected by a trust scheme of arrangement (the "Trust Scheme") with MNACT Unitholders entitled to elect to receive the Scheme Consideration in new units in MCT ("MCT Units"), a combination of cash and MCT Units or wholly in cash. Post-merger, MPACT will become one of Asia's ten largest REITs, with a market capitalisation of approximately S$10.5 billion1. With assets under management ("AUM") of approximately S$17.1 billion2, the diversified and high quality portfolio will comprise 18 commercial assets across Singapore, China, Hong Kong SAR, Japan and South Korea.

Subject to, among other things, approvals by MCT and MNACT unitholders and the Singapore Court, the Merger is currently expected to be completed around August 2022. More details on the Merger will be available in the Scheme Document to unitholders which will be despatched in due course.

• 1 Illustrative market capitalisation of the Merged Entity is calculated based on the Scheme Issue Price of S$2.0039 and the pro forma total number of units outstanding for the Merged Entity as at the Latest Practicable Date of 5,219.1 million, assuming all MNACT Unitholders (excluding the MIPL Entities) elect to receive the Cash-and-Scrip Consideration or the Cash-only Consideration. Assuming all MNACT Unitholders elect to receive the Scrip-Only Consideration, the market capitalisation for Merged Entity would be S$10.9 billion.

• 2 The AUM of MCT and MNACT are based on the valuations of MCT and MNACT as at 31 March 2022.

1.1 Consolidated Statement of Profit or Loss, Statement of Comprehensive Income and

Distribution Statement (MNACT Group)

Statement of Profit and Loss Gross revenue1 Property operating expenses Net property income Other income Interest income Other non-operating income - insurance proceeds2 Other gains Net foreign exchange gain Expenses Manager's management fees3 - Base fee - Performance fee Trustee's fee Other trust expenses Finance costs4 Share of profit of a joint venture5 Profit before net change in fair value of investment properties and financial derivatives Net change in fair value of investment properties6 Net change in fair value of financial derivatives Profit/(loss) before income tax Income tax expenses Profit/(loss) for the year/period	FY21/22 (S$'000)	FY20/21 (S$'000)	Variance Positive/ (Negative) (%)	2H FY21/22 (S$'000)	2H FY20/21 (S$'000)	Variance Positive/ (Negative) (%)
426,676 (104,735)	391,415 (99,375)	9.0 (5.4)	211,235 (51,173)	201,316 (49,016)	4.9 (4.4)
321,941 1,730 12,354 1,700 (23,922) - (826) (2,936) (66,106) 22,965	292,040 2,050 46,393 1,525 (21,591) - (821) (2,461) (71,595) 3,428	10.2 (15.6) (73.4) 11.5 (10.8) NM (0.6) (19.3) 7.7 NM	160,062 873 12,354 900 (11,675) - (413) (1,520) (32,866) 20,551	152,300 850 9,642 1,386 (11,626) - (403) (1,173) (33,676) 3,428	5.1 2.7 28.1 (35.1) (0.4) NM (2.5) (29.6) 2.4 NM
266,900 (215,399) 2,051	248,968 (480,957) 3,886	7.2 55.2 (47.2)	148,266 (215,399) 2,377	120,728 (176,067) (61)	22.8 (22.3) NM
53,552 (31,551)	(228,103) (36,459)	NM 13.5%	(64,756) (11,844)	(55,400) (18,651)	(16.9) 36.5
22,001	(264,562)	NM	(76,600)	(74,051)	(3.4)
Profit/(loss) attributable to: Unitholders Perpetual securities holders7 Non-controlling interests8 Earnings per unit (cents) - Basic and Diluted	16,759 5,049 193	(265,788) - 1,226	NM NM (84.3)	(79,382) 3,039 (257)	(74,396) - 345	(6.7) NM NM
22,001	(264,562)	NM	(76,600)	(74,051)	(3.4)
0.480	(7.857)	NM	(2.260)	(2.186)	(3.4)

Footnotes:

• 1 Revenue for Gateway Plaza and Sandhill Plaza in China excludes Value Added Tax. Revenue for the Japan Properties excludes consumption tax.

• 2 Relates to the receipt of final insurance payments for the year ended 31 March 2022 ("FY21/22") and interim insurance payments (as payment on account) for the year ended 31 March 2021 ("FY20/21") from the insurers, in connection with the insurance claims for property damage and revenue loss due to business interruption at Festival Walk.

• 3 Manager's base fee is calculated based on 10% of distributable income for the period. This includes the asset management fee payable to Mapletree Investments Japan Kabushiki Kaisha ("MIJ") in cash which is calculated based on 10% of distributable income from the Japan Properties.

• 4 Includes the interest expenses imputed to the lease liabilities under Singapore Financial Reporting Standards (International) ("SFRS(I)") 16 Leases.

• 5 Share of profit of joint venture refers to the 50% effective interest in The Pinnacle Gangnam, and it includes the share of post-tax fair value gain for FY21/22 and 2HFY21/22 of S$17.8 million (FY20/21 and 2H FY20/21: S$1.6 million). The acquisition of The Pinnacle Gangnam was completed on 30 October 2020.

• 6 Please refer to Note 2.4(c) on the valuation processes of MNACT Group with respect to investment properties.

• 7 MNACT has issued S$250,000,000 3.50% Perpetual Securities on 8 June 2021 to partially fund the acquisition of Hewlett Packard Japan Headquarters Building ("HPB"). Please refer to MNACT's SGX-ST Announcement dated 1 June 2021 titled "Issue of S$250,000,000 3.50% Perpetual Securities Pursuant to the US$1,500,000,000 Euro Medium Term Securities Programme".

• 8 Non-controlling interests refers to the 1.53% effective interest in the Japan Properties held by MIJ.