MAPLETREE COMMERCIAL TRUST (SGX:N2IU)
Mapletree Commercial Trust - Swimming In Familiar Waters
- Mapletree Commercial Trust's 3QFY20 results boosted by steady performance across its portfolio.
- Majority of renewals completed; looking out for the expiry of PSA Corp’s lease in FY21.
- Capacity for accretive acquisitions.
- BUY call and S$2.60 Target Price maintained.
Strong operating results.
- MAPLETREE COMMERCIAL TRUST (SGX:N2IU) reported a 7.4% rise in 9MFY20 revenues and net property income (NPI) to S$355.5m and S$279.4m respectively. The boost in income came mainly from the contribution of Mapletree Business City Phase 2 (MBC2), which started contributing from 1 Nov 2019 (i.e. 3QFY20). Stripping this impact, YTD NPI would have been c.2.8% higher, driven by higher rents achieved at VivoCity Mall (renewed and new leases), and rental escalations for leases, mainly from its office/business park properties.
- Revenues/NPI from its office/Business Park properties was up collectively by c.10.5%, mainly due to contribution from MBC2 but organic growth was steady at 1.8% YTD - this was mainly on the back of higher revenues from PSA Building (higher rents received, offset by lower occupancies and compensation received a year back), and MBC 1 (higher rents and step-ups) which had more than offset the dip in revenues from Mapletree Anson due to lower occupancy rates.
Distributable income came in at S$213.1m, up 8.1% y-o-y.
- This again was mainly attributable to addition of MBC2, and better performance at MBC1 and VivoCity. Mapletree Commercial Trust announced a DPU of 2.32 for 3QFY20 (7.09 Scts for 9MFY20, 3.8% y-o-y increase).
Financial metrics – steady with significant capacity to acquire when opportunity arises.
- Gearing inched up slightly to 33.4% post the funding of MBC2. However, Mapletree Commercial Trust reported lower all-in cost of debt of 2.96% in 3QFY20 and 75.3% of debt has been swapped to fixed rates.
- Having refinanced all debt due in FY20, debt maturity profile has been further staggered with not more than 15% of debt due in any one year. For FY21, only 10% of debt will be due for renewal.
Portfolio occupancy rate inches higher; reversions strong at 5.0%.
- Overall portfolio occupancy was higher at 98.9%, and this was mainly contributed by improved occupancy at Mapletree Anson (99.0% vs 75.1%). Newly acquired MBC2 reported an impressive 100% committed occupancy for the quarter. Mapletree Commercial Trust signed a total of 171 leases for 9MFY20, with the bulk of the leases (87% of leases) being retail tenants.
- On an overall portfolio basis, Mapletree Commercial Trust achieved 5.0% positive rental reversion, mainly coming from retail tenants (+6.7%) due to an uplift in rents from its anchors. Office/Business Parks leases achieved a more modest positive rental reversion of 0.7%. Only 0.6% of Office/Business Park leases remain to be renewed in FY20, and all retail leases expiring in this financial year has been renewed.
- See Mapletree Commercial Trust Share Price; Mapletree Commercial Trust Target Price; Mapletree Commercial Trust Analyst Reports; Mapletree Commercial Trust Dividend History; Mapletree Commercial Trust Announcements; Mapletree Commercial Trust Latest News.
Rachel TAN
DBS Group Research
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Derek TAN
DBS Research
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https://www.dbsvickers.com/
2020-01-23
SGX Stock
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