LONDON - Macau Property Opportunities Fund Limited (LSE:MPO), a Guernsey-registered investment company, has reported continued progress in its property divestment strategy despite a challenging real estate environment. The company disclosed in its H2 2024 update that it sold two villas at The Fountainside and five units at The Waterside, contributing to gross sales proceeds of around US$93 million since the divestment initiative began in mid-2022.
The sales have allowed MPO to reduce its loan-to-value ratio to 49.4%, with up to 85% of the proceeds allocated to debt reduction. As of September 30, 2024, the fund's market capitalization stood at £15.5 million, with a portfolio valuation of US$135.9 million, a slight 0.8% increase from June 30, 2024. However, the adjusted net asset value (NAV) per share decreased by 2.6% to US$1.04 or 83 pence, and the share price fell by 29.8% to 25 pence, resulting in a substantial discount to the adjusted NAV of 70%.
In Macau's broader real estate market, the removal of anti-speculation measures in early 2024 has started to show benefits, with transaction volume increasing by 6% year-on-year for the first three quarters of 2024. However, the luxury residential market, while seeing an initial increase in sales, experienced a 10% drop in activity between the second and third quarters, and prices reached a nine-year low despite an uptick in transactions.
Macau's economy has shown signs of recovery, with GDP expanding by 11.5% during the first nine months of 2024, approaching pre-pandemic levels. The tourism and gaming sectors have led this rebound, with visitor arrivals surpassing 30 million for the first time since the pandemic and gross gaming revenue for 2024 up 24% year-on-year.
Looking ahead, while the economic outlook for Macau remains positive with continued strength in tourism and gaming, the property market has yet to see significant benefits. MPO is committed to its divestment program and plans to continue reducing debt and returning capital to shareholders. The fund's interim results are expected to be published by late February.
This article is based on a press release statement from Macau Property Opportunities Fund Limited.
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