Mapletree Commercial Trust - Maybank Kim Eng 2019-04-25: Pricing In Steady Growth

MAPLETREE COMMERCIAL TRUST (SGX:N2IU) | SGinvestors.io MAPLETREE COMMERCIAL TRUST (SGX:N2IU)

Mapletree Commercial Trust - Pricing In Steady Growth


Inline 4Q19; maintain HOLD on DPU growth levers

  • Our forecasts are unchanged following MAPLETREE COMMERCIAL TRUST (SGX:N2IU)'s in-line 4Q19 results; FY19 revenue, NPI and DPU met 100% of our full year estimates.
  • The quarter benefitted from stable portfolio occupancy and steady growth at VivoCity post its AEI, and amid an on-going rejig in tenancies. In our previous report (Mapletree Commercial Trust - Maybank Kim Eng 2019-01-24: Simply Steady) we factored in a stronger rental outlook to account for its expansion and changeover leases and see no reason to make further adjustments to our profit estimates.
  • Mapletree Commercial Trust's share price have performed well due to stronger NPI and tighter cap rates on its assets, but the dividend yield is now high at 5.1% ( > 1SD above the historical average). Maintain HOLD.



Steady growth at VivoCity

  • Mapletree Commercial Trust's 4Q19 revenue, NPI and DPU increased by 3.7% y-o-y, 3.0% y-o-y and 1.8% y-o-y, respectively. Its portfolio occupancy was stable across all assets at 98.1%, while rental reversion increased 3.6% for its retail segment (VivoCity) versus +4.0% in 3Q19 and +10.3% for its office leases, in line with 3Q19.
  • VivoCity shopper traffic improved 0.5% y-o-y to 55.2m in FY19 despite AEI downtime, changeover of its hypermarket, and tenant remixing during the year. However, tenant sales decreased 2.0% y-o-y to SGD939.1m.
  • In Apr 2019, Grocer Fairprice commenced fit-out works for its 91,000 sf across Level 1 and Basement 2, scheduled for completion by 3Q 2019; Management estimates a 40% ROI on a stabilised basis for this changeover. This initiative should further entrench its positioning as a destination mall, with rising shopper traffic to support leasing demand.


Maintain HOLD; Prefer Frasers Centrepoint Trust on higher yield, DPU’s






Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2019-04-25
SGX Stock Analyst Report HOLD MAINTAIN HOLD 1.800 SAME 1.800



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......