Mapletree Commercial Trust Review @ 7 February 2021

Basic Profile & Key Statistics

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

Performance Review

YTD Gross revenue and NPI decreased by 1.9% and 1.2%. The drop from VivoCity is offset by the contribution from MBC II which was acquired in November 2019.

Tenant Sales from Oct to Dec has recovered to 85% of pre-Covid level despite shopper traffic is only at 60% of pre-Covid.

Lease Profile

• Occupancy is high at 98.1%
• WALE is short at 2.5 years
• Highest lease expiry within 5 years is moderate at 30.1% which falls in FY24/25 & beyond, without breakdown.
• Weighted average land lease expiry is slightly long at 76.16 years

Debt Profile

• Gearing ratio is slightly low at 34%
• Cost of debt is low at 2.51%
• Fixed rate debt % is slightly low at 71.4%
• All debts are unsecured debt
• WADE is long at 4.4 years
• Highest debt maturity within 5 years is low at 21% which falls in FY24/25
• Interest coverage ratio is high at 4.2 times

Diversification Profile

• All properties are located in Singapore.
• Top property contribution is high at 32.6%
• Top tenant contribution is slightly low at 10.1% 
• Top 10 tenants contribution is low at 27.9% 

Key Financial Metrics

• Property yield is low at 4.2%
• Management fees over distribution is not competitive at 16.5% in which unitholders receive S$ 6.06 for every dollar paid (include retention, it is moderate at 14.1% in which unitholders receive S$ 7.09 for every dollar paid)
• Distribution on capital is low at 2.3% (include retention, it is slightly low at 2.9%) 
• Distribution margin is moderate at 48.7% (include retention, it is high at 57%)

Trends

• Uptrend - NAV per Unit
• Flat - DPU (include retention), Distribution Margin (include retention)
• Downtrend - Interest Coverage Ratio, Property Yield, Distribution on Capital

Relative Valuation

• Dividend Yield - Annualized past 4 quarters DPU @ 6.773 cents / average yield @ 5.09% = S$ 1.33 (include retention, annualized past 4 quarters DPU is 7.92 cents, translate into S$ 1.56)
• Price/NAV - NAV @ S$ 2.08 x average P/NAV @1.14 = S$ 2.37

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Short WALE
High Occupancy	100% Geographical Contribution
Low Cost of Debt	High Top Property Contribution
100% Unsecured Debt	Low Property Yield
Long WADE	Interest Coverage Ratio Downtrend
Well Spread Debt Maturity	Property Yield Downtrend
High Interest Coverage Ratio	Distribution on Capital Downtrend
Low Top 10 Tenants Contribution
High Distribution Margin (include retention)
NAV per Unit Uptrend

MCT performance has been improving, especially for VivoCity in which gross revenue has been improved by 25% QoQ. The recovery from VivoCity would definitely help to boost MCT distribution in upcoming quarters. Moreover, there is a remaining S$ 28.7 million retention left.

For more information, you could refer to:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

REIT-TIREMENT Patreon - Support this blog as a Patron and get SREITs Dashboard PDF

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 the 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 as well as 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.