Mapletree Commercial Trust Review @ 3 May 2021

Basic Profile & Key Statistics

Mapletree Commercial Trust (MCT) invests in both office and retail properties and currently owns 5 properties in Singapore. 

Performance Highlight

Gross revenue before grant, NPI and distributable amount before adjustment increased YoY by 0.6%, 1.8% and 6.5% respectively. The DPU before adjustment for 2H FY20/21 and 2H FY19/20 would be around 4.92 cents and 4.63 cents respectively, which increased by 6.3% YoY.

Portfolio rental reversion for FY20/21 is at -3.1% with the retail sector impacted most.

Comparing with 2019, tenant sales recovered to 86% despite shopper traffic recovered only to around 60%.

Related Parties Shareholding

• REIT sponsor's shareholding is high at 32.44%
• REIT manager's shareholding is high at 2.91%
• Directors of REIT manager's shareholding is high at 0.26%

Lease Profile

• Occupancy is slightly high at 97.1%
• WALE is short at 2.4 years
• Highest lease expiry within 5 years is slightly low at 25% which falls in FY22/23
• Weighted average land lease expiry is slightly long at 75.91 years (to be updated after release of annual report)

Debt Profile

• Gearing ratio is low at 33.9%
• Cost of debt is moderate at 2.48%
• Fixed rate debt % is moderate at 70.7%
• All debts are unsecured debts
• WADM is long at 4.2 years
• Highest debt maturity within 5 years is low at 24% which falls in FY24/25
• Interest coverage ratio is high at 4.4 times

Diversification Profile

• All of its properties are located in Singapore
• Top property contribution is high at 34%
• Top 5 properties contribution is high at 100%
• Top tenant contribution is moderate at 10.3% 
• Top 10 tenants contribution is low at 28.1% 

Key Financial Metrics

• Property yield is low at 4.3% 
• Management fees over distribution is low at 11.9% in which unitholders receive S$ 8.41 for every dollar paid 
• Distribution on capital is slightly high at 3.6%
• Distribution margin is high at 65.7%

Include retention, management fees over distribution, distribution on capital and distribution margin would be 11.4%, 3.8% and 69% respectively.

Trends

• Uptrend - NAV per Unit 
• Flat - DPU
• Slight Downtrend - Distribution Margin
• Downtrend - Interest Coverage Ratio, Property Yield, Distribution on Capital

Include retention, DPU is at a slight uptrend; distribution margin is flat.

Relative Valuation

• Dividend Yield - Past 4 quarters DPU @ 9.49 cents / average yield @ 5.02% = S$ 1.89. Include retention, DPU @ 9.96 which translate into S$ 1.98.
• Price/NAV - NAV @ S$ 1.72 x average P/NAV @ 1.15 = S$ 1.98

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Short WALE
High Sponsor's Shareholding	High Top Geographical Contribution
High Manager's Shareholding	High Top Property & Top 5 Properties Contributions
High Directors of REIT Manager's Shareholding	Low Property Yield
Low Gearing Ratio	Interest Coverage Ratio Downtrend
100% Unsecured Debt	Property Yield Downtrend
Long WADM	Distribution on Capital Downtrend
Well Spread Debt Maturity
High Interest Coverage Ratio
Low Top 10 Tenants Contribution
Competitive Management Fees
High Distribution on Capital (include retention)
High Distribution Margin
NAV per Unit Uptrend

From the above, MCT fundamentals and performance remain resilient, notwithstanding there is a remaining S$ 15.7 million retentions left. However, the new mall restrictions from May 1 to May 14 may impact VivoCity performance. Hopefully, the community cases would be reduced soon. 

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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REIT Investing Community - Facebook Group where members share and discuss REIT topic

*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.