MPO Fund trades over 200,000 shares in March

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The London Stock Exchange saw an upset in the form of 43,379 shares of Macau Property Opportunities Fund (MOP) traded last Friday, the third largest trade this month, following a 3rd March high when 136,570 shares were traded; the next day over 60,000 MPO shares exchanged hands.
This comes at a low point for the real estate developer – claiming on its website to be ‘positioned for growth’ – which has suffered a 52 per cent drop in share prices on the London Stock Exchange listings since a unit high of £2.63 (MOP30.1) in July 2014.
Macau Property Opportunities Fund is a U.K. based fund that develops ‘high quality properties’ in Macau and the Pearl River Delta region.
The current share price as of Friday was £1.24 (MOP14.2) per unit and reflects a continuance of the drop reflected in February’s figures – bottoming out at £1.16 at the end of the month. Return on equity, the amount of net income returned as a percentage of shareholders equity, was negative by 27.8 per cent at the end of the same month, according to the FTSE monthly report.
The report also reflected a negative price to earning’s ratio, measuring current share price relative to per earnings share, at -2.4. Macau Property Opportunities has over 76 million issued shares, with four ‘existing principal properties’ in their portfolio.
Properties
The four properties are divided between two active properties: The Waterside – 59 luxury-lease apartments in One Central for a total commitment of US$109 million (MOP871 million) and The Fountainside – 38 apartments and four villas for a total commitment of US$23 million.
Two as-yet-completed projects are still under development; namely, a luxury private home on Estrada da Penha equalling a total commitment of US$28 million, whose status is ‘renovation completed’ and a stopped project in Senado Square for a seven-story 65,000 square foot retail development acquired for US$16 million with a projected development cost of US$21 million.
Occupancy rate for The Waterside properties, according to data from the fourth quarter of 2015, stood at 39 per cent, with MPO pushing their sales campaign on The Fountainside properties, due to ‘potential buyers […] holding back on their purchasing decision until the economy shows signs of improvement’. The company secured a US$36 million loan for ‘its properties in One Central residences’, claiming a loan-to-value ratio of 36.8 per cent. During the fourth quarter of 2015 rents decreased 16 per cent to HK$22.95 per square foot compared to the previous quarter.
Continued uncertainty
A ‘challenging environment in which to sell units’ plagues the Fountainside, which has sold 27 of its 42 units for a total of HK$202.6 million. Demand for the sale of parking spaces in the property ‘will remain strong’, with a total of HK$21.9 million in sales as of December.
The Estrada da Penha project is pending with an architect contracted to ‘produce detailed layout plans’ and ‘internal renderings’.
The Senado Square project, the land for which was acquired in October 2007, is pending as MPO awaits ‘the issuance of a new Urban Condition Plan’. The document stipulates height and plot ratio for the development of the land and has ‘been slow in coming,’ says the developer. The group expects to submit the ‘detailed planning application’ in the third quarter of 2016 and has proceeded with the architectural planning submission with the intention of expediting the entire planning approval process with the government agencies.
MPO was unavailable for comment at the time of publication.