MAPLETREE COMMERCIAL TRUST (SGX:N2IU)
Mapletree Commercial Trust - Looking To The Spend
In line, maintain BUY
- Mapletree Commercial Trust (SGX:N2IU) delivered headline 2H21 DPU at +57.9% y-o-y, with distributions boosted by retained cash in 4Q20 carried forward.
- Operational, Mapletree Commercial Trust's FY21 DPU growth was flat, in line with its revenue at -0.8% y-o-y, NPI at -0.2% y-o-y, and so within consensus and MKE. Contribution from its MBC business park assets has risen to support DPU visibility, with its AUM more resilient and backed by improving domestic demand-led drivers.
- We have maintained forecasts and rolled-over valuations, to a higher DDM-based target price (COE: 5.9%, LTG: 2.0%) of S$2.35 (from S$2.30) for Mapletree Commercial Trust.
- Mapletree Commercial Trust's valuations are undemanding at 4.5% FY22E yield on the back of recovering DPUs. BUY.
Lower occupancy, but set to rise
- Mapletree Commercial Trust's portfolio occupancy dipped q-o-q from 94.7% to 93.5% in 4Q21, with lower occupancy at MBC I (from 95.2% to 90.2%) due to transitory vacancies. Committed occupancy for its portfolio remains high at 97.1%, with MBC II, Mapletree Anson and MLHF all fully committed as of end-Mar 2021.
- Looking ahead, tenants displaced by upcoming CBD redevelopments could bolster occupancy and rents at MBC. While rental reversion for its retail segment was weak at -9.6% (vs -8.9% in 1H21), committed occupancy for VivoCity has picked up to 99.1% (from an actual 97.1%).
Improvement at VivoCity; has trailed peers
- Revenue and NPI at VivoCity jumped 15.9% y-o-y and 15.5% y-o-y in 4Q21, driven by recovery in both shopper traffic and tenant sales. The latter has returned to more than 86% of pre-Covid levels (same as 3Q21), from 78.0% in 2Q21 and 36.6% in 1Q21, and ahead of ~74% recovery in shopper traffic.
- Mapletree Commercial Trust's performance however, would have trailed Frasers Centrepoint Trust (SGX:J69U) (with tenant sales at ~110%) and CapitaLand Integrated Commercial Trust (SGX:C38U) ( ~103%), due to limitations on large-scale sales events, but with upside seen from further easing in capacities in FY22.
Sound balance sheet, stronger AUM
- Mapletree Commercial Trust's balance sheet is strong with gearing stable at 33.9% (34.0% in 3Q21). Interest cover was at 4.4x while borrowing costs fell again (from 2.51%) to 2.48%. Its AUM stayed at S$8.7b, as cap rates tightened h-o-h for its MBC business park properties (from 4.90-4.95% to 4.80-4.85%) and MLHF fringe office asset (from 3.90% to 3.80%).
- Mapletree Commercial Trust's AUM profile has improved following the MBC II deal, as retail contribution has fallen to ~36% (from ~45%).
- See
Chua Su Tye
Maybank Kim Eng Research
|
https://www.maybank-ke.com.sg/
2021-04-29
SGX Stock
Analyst Report
2.35
UP
2.300
