Mapletree Commercial Trust Preferential Offering of 71 New Units For Every 1000 Existing Units

I have previously wrote about Mapletree Commercial Trust’s acquisition of Mapletree Business City (Phase 2) which will be funded by a private placement of New Units to institutional and other investors; and / or a non-renounceable preferential offering of New Units to the existing unitholders of MCT on a pro rata basis.

The proposed acquisition was confirmed on the EGM that was held on 15th of October. On 16 October 2019, the Manager proposed to carry out an equity fund raising comprising an offering of 406,482,840 New Units to raise gross proceeds of no less than S$902.3 million by way of:

  • A private placement of 200,893,000 New Units at an issue price of between S$2.240 and S$2.280 per New Unit to raise gross proceeds of no less than S$450.0 million (the “Private Placement”); and
  • A pro-rata and non-renounceable preferential offering of 205,589,840 New Units on the basis of 71 New Units for every 1,000 existing units in MCT (“Existing Units”) to be held as at the Preferential Offering Books Closure Date to Entitled Unitholders at an issue price of between S$2.200 and S$2.240 per New Unit (fractions of a New Unit to be disregarded) to raise gross proceeds of no less than S$452.3 million (the “Preferential Offering”), (together, the “Equity Fund Raising”)

on 15th October 2019, the closing price of Mapletree Commercial Trust is S$2.34. Based on the issue price of S$2.24, this is around 4.27% discount to the current trading price. Of course there is a possibility the current share price may either go further up or down depending on how investors think about the preferential offering.

Here are some important dates for the Preferential Offering

Date/Time Event
5pm, Thursday, 24 October 2019 Closure of MCT’s Transfer Books and Register of Unitholders for the Cumulative Distribution
5pm, Friday, 8 November 2019 Unitholders and depository agents must have completed and returned Form A or Form B, as applicable, to the Unit Registrar, Boardroom Corporate & Advisory Services Pte. Ltd.
Thursday, 21 November 2019 Payment of the Cumulative Distribution

Value Unlocked with Mapletree Commercial Trust Proposed Acquistion of MBC II

Mapletree Commercial Trust current own VivoCity, Mapletree Business City I (“MBC I”), PSA Building, Mapletree Anson, Bank of Amercia Merrill Lynch HarbourFront (“MLHF”) in its portfolio.

This is one piece of news investors of Mapletree Commercial Trust has been waiting for. On 27th September 2019, Mapletree Commercial Trust has proposed the acquisition of Mapletree Business City (“Phase 2”). Since its IPO in 2011 to the current 2019, Net Property Income has increased from S$124 million to S$347.6 million. Distribution Per Unit (“DPU”) has increased from 5.271 cents to 9.14 cents.

There are various reasons or rationale the manager has provided behind the acquisition such as owning the workplace of the future, asset class provides steady rental growth at low volatility, stable cashflows with embedded rental growth from high quality tenants, further enhances Mapletree Commercial Trust portfolio and attractive valuation and NPI, DPU and NAV accretive etc. I wanted to highlight the point that with the acquisition, Mapletree Commercial Trust has basically gain control over the Alexandra Precinct!

Now, here comes the most important part. With the acquistion, value is expected to be unlocked! Net Property Income (“NPI”) yield is estimated to increase from 4.7% to 5.0%. Distribution Per Unit is estimated to increase from 9.14 cents to 9.51 cents. Net Asset Value per unit is estimated to increase from 1.71 cents to 1.74 cents.

Lastly, the acquistion will be funded by debt and equity. The manager has proposed the issue of up to 500.0 million new units. Investors can expect

  • A private placement of New Units to institutional and other investors; and / or
  • A non-renounceable preferential offering of New Units to the existing unitholders of MCT on a pro rata basis

The EGM is to be held on 15 October 2019 (Tuesday) at 3.30 p.m.

I am looking forward to the preferential offering!

Mapletree Commercial Trust DPU Grew 1.3% for 2QFY18/19

This is one REIT that give you no surprises. It has been almost a year since I wrote Why I Bought Into Mapletree Commercial Trust. Today, Mapletree Commercial Trust has announced their 2QFY18/19 financial results. Distribution Per Unit (“DPU”) grew by 1.3% to 2.27 Singapore cents driven by higher contribution from VivoCity, MBC I and MLHF.

Mapletree Commercial Trust’s flagship shopping mall, VivoCity achieved healthy growth in shopper traffic and tenant sales of 5.8% and 2.8% respectively in 2Q FY18/19. In addition, the speculation in Investing Note forum that the hypermart will be replaced came true. FairPrice will replace VivoMart with a new integrated concept by 1H FY19/20. This should further boost shopper traffic at VivoCity.

The overall portfolio committed occupancy stood at 98.7% which I think is overall healthy.

Here are the 2QFY18/19 financial results compared with 2QFY17/18. Read More