Divest Mapletree Anson

MPACT Divest Mapletree Anson

On 30th May 2024, MPACT (Mapletree Pan Asia Commercial Trust) announced the proposal to divest Mapletree Anson for S$775.0 million. Mapletree Anson is one of MPACT’s five commercial properties located in Tanjong Pagar. If the proposed divestment is successful, MPACT will have four properties left in Singapore, namely Bank of America Harbourfront, Mapletree Business City, mTower and Vivocity.

Besides Singapore MPACT has one property (Festival Walk) in Hong Kong, two in China (Gateway Plaza & Sandhill Plaza), nine in Japan and one in South Korea (Pinnacle Gangnam). They have a total lettable area of 11.2 million square feet independently valued at S$16.5 billion.

Rationale for the Divestment of Mapletree Anson

As per what was shared in the presentation slides, below are the rationale for the divestment.

  • Strengthened Capital Structure and Enhanced Financial Flexibility.
  • DPU Accretive to MPACT Unitholders on a Pro Forma Basis.
  • Divestment Consideration Secures Gain over Latest Independent Valuation and
    Original Purchase Price.
  • Maintaining Singapore’s Continued Significance in a Diversified Portfolio.

Is the divestment of Mapletree Anson profitable?

The divestment consideration represents a gain of S$10.0 million over the Property’s latest independent valuation of S$765.0 million. Thus, the answer is yes, it is profitable for MPACT.

Use of Net Proceeds

The next important question you may ask is what will the proceeds be used for? In your mind, you may think MPACT will give you a special dividend. That is unlikely. The net divestment proceeds of approximately S$762 million, after accounting for total estimated transaction costs and the transfer of tenants’ security deposits, will be allocated towards debt reduction.

MPACT to Divest Mapletree Anson Pro Forma

As per the latest quarter results, MPACT aggregate leverage stood at a high of 40.5%. The repayment of debt is expected to lower MPACT’s aggregate leverage from 40.5% to 37.6% on a pro forma basis and improve the adjusted interest coverage ratio from 2.9 times (for FY23/24) to 3.3 times on a pro forma basis.

Ms Sharon Lim, Chief Executive Officer of the Manager, said that the divestment of Mapletree Anson is expected to generate approximately 1.5% accretion to DPU (Distribution Per Unit) for FY23/24 on a pro forma basis. I will take it with a pinch of salt as the merger between Mapletree Commercial Trust and Mapletree North Asia Commercial Trust is said to be yield accretive too.

The divestment of Mapletree Anson is scheduled for completion in July 2024. With the completion, below are the remaining 17 properties under MPACT.

MPACT to Divest Mapletree Anson

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