Mapletree Commercial Trust (MCT) was listed on the SGX on 27 April 2011 with an initial portfolio of 3 properties. Since then, it had completed 2 major acquisitions and thus, enlarging its portfolio to 5 properties valued at S$ 6.68 billion as at 31 March 2018. Here, I’ll share 9 key things you need to know on MCT before you invest.
#1: Stock Symbol
Ticker Symbol: SGX: N2IU
Market Capitalization: S$ 4.46 billion (26 June 2018)
Share Price: S$ 1.55 (26 June 2018)
#2: The Portfolio
MCT owns and derives income from the following properties:
Located at the Harbourfront Precinct, it is the biggest shopping mall in Singapore. The leases are typically structured with 3-years tenures comprising of base rents, service charges, advertising and promotion charges, and turnover rents. As of 31 March 2018, it reported a 99.8% in committed occupancy rate with key tenants such as Tangs, H&M, VivoMart, Golden Village and Kopitiam. In 2018, VivoCity has made S$ 206.6 million in gross revenue and thus, is the biggest contributor of revenues to MCT.
- Mapletree Business City 1 (MBC1)
MCT had acquired MBC 1 for S$ 1.78 billion on 25 August 2016. It is an integrated development consisting of one 18-storey office tower & three business park blocks. As of 31 March 2018, MBC 1 had reported a 99.4% in occupancy rate with key tenants such as HSBC, SAP ASIA Pte Ltd, and Samsung Asia Pte Ltd. In 2018, MBC 1 had generated S$ 126.0 million in gross revenue and hence, is the second largest source of revenues to MCT.
- PSA Building
It is a development that integrates one 40-storey office building with a 3-storey retail centre. As of 31 March 2018, PSA Building reported a 98.7% occupancy rate with key tenants such as PSA Corporation Ltd, Casino Regulatory Authority, Bank of Singapore Ltd, and Mapletree Investments Pte Ltd. In 2018, PSA Building has made S$ 48.9 million in gross revenue and hence, is MCT’s third largest source of revenues.
- Mapletree Anson
It is a 19-storey Grade-A office building in Tanjong Pagar, Singapore. As at 31 March 2018, Mapletree Anson has secured 100% committed occupancy with tenants such as Yahoo! Southeast Asia, Allied World Assurance Co. Ltd, Sumitomo Corporation Asia Pte Ltd, and J. Aron & Company (Singapore) Pte Ltd. In 2018, Mapletree Anson reported S$ 33.7 million in gross revenue and thus, is MCT’s fourth key source of revenues to MCT.
- Bank of America Merrill Lynch Harbourfront (MHLF)
It is a 6-storey office building leased to Merrill Lynch Global Services Pte Ltd. The lease was renewed in November 2017 for 6 years till the year 2023. It is the smallest revenue contributor to MCT as it has made S$ 18.3 million in gross revenue in 2018.
#3: The Financial
Overall, MCT has reported a steady increase in gross revenue and distributable income. Gross revenues have grown from S$ 177.3 million in 2012 to S$ 433.5 million in 2018. This, in turn, had resulted in growth in distributable income from S$ 98.2 million in 2012 to S$ 260.4 million in 2018. Its distributions per unit (DPU) has increased from 5.27 cents in 2012 to 9.04 cents in 2018.
Source: Annual Report 2017 of MCT
#4: Balance Sheet Strength
As at 31 March 2018, MCT has reported total debt outstanding amounting to S$ 2.33 billion. Its gearing ratio is 34.5%, its all-in cost of debt is 2.75% a year, and its proportion of debt with the fixed interest rate is 78.9%.
#5: Lease Expiry
As at 31 March 2018, MCT has a weighted average lease term (WALE) of 2.7 years for its portfolio. 60.6% of MCT’s lease agreements would expire in the year 2020 and beyond.
Source: Financial Results Presentation Q4 2018 of MCT
#6: Asset Enhancement Initiatives (AEI)
In 2018, MCT has completed AEI works on VivoCity which involved:
- Conversion of 9,200 sq. ft. of lower to higher yielding spaces on Level 1 & 2. This resulted in the addition of retail spaces for its existing tenants such as Coach, The Diamond Atelier, Aldo and Pazzion. The AEI has brought in a new-to-mall brand: Calvin Klein Jeans.
- Improved line of sight for Basement 2 food kiosks.
Currently, MCT is undertaking AEI works on VivoCity which involves:
- Conversion part of Level 3 to a 3,000 sq. m. of Public Library.
- Extension of Basement 1 that would increase over 24,000 sq. ft. of contiguous retail spaces. It will feature tenants such as Adidas, Mi, Fila, Popular Bookstores, New Era, Spectacle Hut and Weston Corp.
- Expansion of Timezone by 80% in size to become its flagship gaming arcade in Singapore.
- Expansion of Zara from 16,000 sq. ft. to 32,000 sq. ft. to become the largest Zara outlet in Singapore.
#7: Rights of First Refusal Properties (ROFR) Properties
MCT has a pipeline of ROFR properties for future acquisitions. They are:
- 100% interest in Harbourfront Centre
- 100% interest in Mapletree Lighthouse
- 100% interest in St James Power Station
- 100% interest in the Comtech
- 100% interest in Mapletree Anson
- 100% interest in PSA Vista
- 61% interest in Harbourfront Tower One
- 61% interest in Harbourfront Tower Two
- 30% interest in Keppel Bay Tower
As I write, MCT is trading at S$ 1.55 a unit.
As at 31 March 2018, MCT has reported having S$ 1.49 in net asset value a unit. Thus, its current P/NAV works out to be 1.04, the lowest in the 5-year period.
MCT adopts a distribution policy to declare and pay out a minimum 90% of its distributable income on a quarterly basis. In 2018, MCT has paid out 9.04 cents in DPU. If MCT maintains its DPU at 9.04 cents, its expected dividend yield is 5.83%, close to the higher end of its 5-year range of 5.00% – 6.04%.
Calculated based on Figures Presented in Annual Reports of MCT
#9: Investor Relations
For further enquiries or to request for additional investment information on MCT’s Investors Relation matters, you may contact:
Ms. Teng Yi Leng
Vice President, Investor Relations
Telephone: +65 6377 6836
#10: Major Shareholders
Temasek Holdings (Private) Ltd is the largest unitholder of MCT with 34.0% unitholdings held through:
- The Harbourfront Pte Ltd
- Harbourfront Place Pte Ltd
- Harbourfront Eight Pte Ltd
- Sienna Pte Ltd
- Mapletree Commercial Trust Management Ltd
MCT has delivered stable distributions to its unitholders for the past 5 years. Moving ahead, MCT remains committed to its AEI works at VivoCity and to retain quality tenants to maintain the stability of its overall portfolio.