facebook12 Things To Know About Mapletree Commercial Trust Before You Invest

21

shares

Advertisement

Seedly Mapletree Commercial Trust SGX: N2IU

12 Things To Know About Mapletree Commercial Trust Before You Invest

profileThe Fifth Person

Listed in July 2011, Mapletree Commercial Trust, or MCT (SGX: N2IU), owns a portfolio of Singapore retail and office properties including VivoCity and Mapletree Business Centre. As of 31 March 2019, its portfolio was valued at S$7.0 billion.

In this article, I’ll bring an update on MCT’s latest financial results, long-term performance, and valuation.

Here are 12 things to know about Mapletree Commercial Trust before you invest.

Disclaimer: This is not a sponsored post. Opinions expressed in the article should not be taken as investment advice. Please do your own due diligence.


Source: Mapletree Commercial Trust

1. VivoCity: Revenue increased 3.0% year-on-year to S$212.9 million in 2019, and net property income (NPI) increased by 3.6% to S$162.3 million.

This was mainly due to step-up rents in existing leases and securing new leases from Zara, Adidas, Fila, Popular Bookstores, Nike, and the National Library Board.

Source: Mapletree Commercial Trust Annual Report

2. Mapletree Business Centre 1 (MBC1): Revenue increased 0.9% year-on-year to S$127.1 million in 2019, and NPI increased 0.4% rising to S$104.2 million.

Since it was acquired for S$1.78 billion in August 2016, the business park has contributed steady revenues and income over the past two years.

Source: Mapletree Commercial Trust Annual Report

3. PSA Building: Revenue increased 3.3% year-on-year to S$50.5 million in 2019, and NPI increased 4.1% to S$38.5 million. The office tower has maintained a high occupancy rate and recorded a positive rental reversion from renewed leases.

Source: Mapletree Commercial Trust Annual Report

4. Mapletree Anson: Revenue and NPI remained flat at S$33.6 million and S$26.9 million respectively in 2019. Its financial performance has remained relatively stable over the last five years.

Source: Mapletree Commercial Trust Annual Report

5. Bank of America Merrill Lynch Harbourfront (MLHF): Revenue increased 7.6% year-on-year to S$19.7 million in 2019 and NPI increased 9.7% to S$15.8 million. The management renewed a long-term lease with an anchor tenant, Merrill Lynch Global Services Pte Ltd, for Levels 1 to 5 of MLHF in 2017 for six years until 2023.

The building also secured two new tenants for Level 6 in 2018 and has been fully occupied since.

Source: Mapletree Commercial Trust Annual Report

6. Overall, portfolio revenue increased 2.4% year-on-year to S$443.9 million in 2019 and distributable income increased 1.4% to S$264.0 million in 2019. This was mainly due to stable performances from MBC1 and Anson properties, and improved results from VivoCity, PSA and MLHF.

Distribution per unit (DPU) grew 1.1% to 9.14 cents and has risen every year since their IPO.

Source: Mapletree Commercial Trust Annual Report
Source: Mapletree Commercial Trust Annual Report

7. As of 31 March 2019, MCT has a gearing ratio of 33.1%, a slight drop from 34.5% in 2018. The REIT has a debt headroom of S$1.5 billion which it can use for acquisitions of properties or asset enhancement initiatives in the future. Average all-in cost of debt is 2.97% and 85% of MCT’s debt is at fixed interest rates.

The average term to maturity is 3.6 years and MCT has no more than 20% of debt due in a single year. MCT also has a credit rating of ‘Baa1’ with a stable outlook from Moody’s.

Source: Mapletree Commercial Trust 4Q 2019 Presentation

8. As of 31 March 2019, MCT has an overall occupancy rate of 98.1% for its portfolio, an improvement from 96.1% a year ago. This is mainly due to the securing of new leases for extended spaces at VivoCity and vacated spaces at Mapletree Anson. Weighted average lease of expiry (WALE) increased to 2.9 years in 2019, up from 2.7 years the year before. MCT’s top 10 tenants contributed 25.5% of gross rental revenue in 2019.

PropertyOccupancy Rate
(2018)
Occupancy Rate
(2019)
VivoCity93.1%99.4%
Mapletree Business Centre 199.4%97.8%
PSA Building96.1%96.4%
Mapletree Anson86.6%96.8%
Bank of America Merrill Lynch Harbourfront 100.0%100.0%

9. MCT is replacing VivoMart – which had occupied Level 1 and Basement 2 of VivoCity – with local supermarket operator NTUC FairPrice. Fit-out works for the integrated space measuring 91,000 square feet started in April 2019, and the new space will include new stores such as FairPrice Xtra, Unity Pharmacy, and even a Cheers convenience store.

Around 24,000 square feet of space was recovered from VivoMart and will be occupied by Uniqlo and food outlets such as Song Fish, Penang Culture, Nakhon Kitchen, and Wonderland Savour.

Source: Today Online

10. MCT’s sponsor, Mapletree Investments Pte Ltd, is presently the REIT’s largest unitholder with a 34.2% stake as of 31 May 2019. MCT has the rights of first refusal for seven Mapletree Investment properties. Combined, these properties have a total of 2.9 million square feet in net lettable area.

Source: Mapletree Commercial Trust 4Q 2019 Presentation

11. P/B ratio: As of 31 March 2019, MCT has net assets per unit of S$1.60. Based on MCT’s share price of S$2.07, its current P/B ratio is 1.29, the highest in the last seven years.

Source: Mapletree Commercial Trust 4Q 2019 Presentation

12. Distribution yield: In 2019, MCT paid 9.14 cents in DPU. Hence, its yield is currently 4.4%, the lowest in the last seven years.

Source: Mapletree Commercial Trust 4Q 2019 Presentation

The Fifth Perspective

Mapletree Commercial Trust has delivered steady growth in revenue, NPI, and DPU since its IPO.

However, its exceptional price run since the turn of the year – from S$1.68 to $2.07 – has seen the REIT reach record high valuations.

Just like many Singapore REITs at the moment, MCT looks expensive based on its historical averages.

Want More In-Depth Analysis And Discussion?

Why not check out Seedly’s QnA and participate in the lively discussion surrounding stocks like Mapletree Commercial Trust and many more!

Stock Discussion on Mapletree Comm Trust


Seedly Contributor: The Fifth Person

For our Stocks Analysis, the Seedly team worked closely with The Fifth Person, who is an expert in the field to curate unbiased, non-sponsored content to add value back to our readers.

The Fifth Person believes in spreading a message – that sound investment knowledge, financial literacy and intelligent money habits can help millions of people around the world achieve financial security, freedom, and lead better lives for themselves and their loved ones.

Their company and the knowledge shared was born from that vision and they hope to foster smarter, more profitable investment decisions for people and the world at large.

If you have any questions on the mentioned stocks, feel free to discuss them with the Seedly Community here.

Read other articles by The Fifth Person:

Advertisement

profile
About The Fifth Person
You can contribute your thoughts like The Fifth Person here.

🔥 What's Popular

    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles

Stay updated with the latest finance tips!

Receive bite-sized finance on Telegram here.
💬 Comments (0)
What are your thoughts?

No comments yet.
Be the first to share your thoughts!

🔥 What's Popular

    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles
    • Loading articles

Join our Community!

Discuss your thoughts with like-minded members in these community groups!

Stay updated with the latest finance tips!

Receive bite-sized finance on Telegram here.

Advertisement