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

October 2018 Financial Results Announcement Dates

It is almost coming to the end of the year and I am expecting to receive my last tranche of dividends payout from the REITs I am holding. With the recent announcement of Fed interest rate hike, it impacted the share price of REITs, causing them to decline slightly. For the past week, the stock market was in a sea of red. However, the stock market managed to recover slightly and re-bounced back on Friday, 12th October 2018.

The risk that I am expecting for Frasers Logistics and Industrial Trust has actualized as AUD weakened further against the Singapore dollar (1 AUD to 0.98 SGD). The market has reacted to this and the share price of Frasers Logistics and Industrial Trust fell lower to S$1.04.

Below are the date of results announcement for some of the REITs I am holding in my stock portfolio.

Stock Name Percentage of My Stock Portfolio Date Of Results Announcement
ST Engineering 16% Not applicable
Frasers Logistics and Industrial Trust 15% 5th November 2018
ParkwayLife REIT 11% 25th October 2018
CapitaMall Trust 11% 25th October 2018
Mapletree Commercial Trust 11% 24th October 2018
ComfortDelgro 8% Not applicable
OUE Hospitality Trust 4% Not applicable
The Hour Glass 3% Not applicable
Kingsmen Creative 3% Not applicable
Frasers Commercial Trust 2% 19th October 2018

Looking forward to collecting my dividends!