Mapletree Commercial Trust Continues To Deliver Strong Performance



Key Highlights:

  • Mapletree Commercial Trust's 3QFY20 DPU went up 5.6% to 2.46 cents

  • It is currently trading at 1.39 price to book ratio


1. Dividends


Net property income grew 17.6% to $103.3m. The increase was mainly due to:

  • Contribution from newly acquired MBC II in Nov 2019

  • Improved performance in existing properties


The REIT continues to deliver solid performance. However, the annualised yield remains at a historical low of 4.1%.

Source: reitscompass's REITs Insider ratings


2. Portfolio


Portfolio occupancy went up to 98.9%. The REIT enjoyed a 5% positive rental reversion in the last quarter. Its leverage inched up to 33.4%, with an overall interest cost of 2.96%.


It is currently trading at a high price to book ratio of 1.39.


3. Growth catalyst


Moving forward, Mapletree Commercial Trust expects to recognise a full quarter contribution from MBC II. Besides, the government's Greater Southern Waterfront growth plan will also benefit its core asset, VivoCity.

Its PSA lease at the PSA building is expiring on Aug 20. The good news is Mapletree Commercial Trust has secured a new lease with WeWork, which will take over 60% of the total space. The renovation works are expected to complete in Feb 2021. Hence, there will be a 6-month of downtime. Overall, the property has achieved a 90.6% pre-committed occupancy rate.

In Nov '19, Mapletree Commercial Trust is also added to the MSCI Singapore Index.


Summary


Mapletree Commercial Trust has always been one of our favourite REITs. However, the current price is trading at the high side. We would prefer to keep in in the watchlist for a better entry price in the future.


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