Mapletree Commercial Trust 1QFY20/21 Financial Results

Mapletree Commercial Trust VivoCity

Mapletree Commercial Trust has announced their 1QFY20/21 financial results on 23rd July 2020. No distribution was declared as Mapletree Commercial Trust has adopted the new half-yearly reporting framework with effect from FY20/21. Any distributions to Unitholders is on a half-yearly basis with effect from FY20/21.

Similar to other shopping malls, VivoCity’s 1Q FY20/21 shopper traffic and tenant sales were impacted by eight-week circuit breaker and other COVID-19 restrictions.

Gross revenue and Net Property Income (“NPI”) was down 10.5% and 10.7% respectively from 1Q FY19/20. The decline was mainly due to COVID-19 rental rebates disbursed during the quarter but was mitigated by contribution from Mapletree Business City II (“MBC II”) acquired in November 2019.

1QFY20/21 Financial Results

1QFY20/21
(S$’000)
1QFY19/20
(S$’000)
YoY(%)
Gross Revenue 100,347 112,128 (10.5%)
Net Property Income 78,864 88,347 (10.7%)

Occupancy

As of 30th June 2020, occupancy stood at 98.2%. Mapletree Business City (“MBC”) continues to provide support and stability.

MCT Occupancy 30 June 2020

Debt

As of 30th June 2020, gearing ratio stood at 33.7%. 100% of the assets remained unencumbered. This is the best thing I like about Mapletree Commercial Trust.

New facilities secured and on track to refinance all borrowings due in FY20/21 and FY21/22.

MCT Debt Maturity 30 June 2020

Current Dividend Yield

Based on the current share price of S$1.90 and FY19/20 full year distribution of 8 cents, this translate to a current dividend yield of 4.21%.

If we based on FY18/19 full year distribution of 9.14 cents, the current dividend yield is 4.81%.

In my opinion, the dividend yield is not very attractive at the current share price.

Mapletree Commercial Trust Share Price 29 July 2020

Summary

Mapletree Commercial Trust makes up 10.06% of my stock portfolio and thus it is unlikely I am going to increase my allocation of Mapletree Commercial Trust.

The acquisition of MBC has added diversification to its portfolio consisting of retail and offices. As such, the impact by COVID-19 is not felt as strongly as compare to pure retail reits such as CapitaLand Mall Trust.

Having said that, as companies and businesses impacted by COVID-19 move to contain costs, more are pursuing to downsize through renewals or relocations. In Q2 2020, office rents corrected for the second consecutive quarter. Looking forward, vacancy levels are likely to rise as the volume of secondary space increases due to the relocations of major occupiers. Coupled with subdued demand, CBRE expects further downward pressure on rents in the second half of 2020.

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