Mapletree Commercial Trust - Maybank Kim Eng 2021-07-26: Re-tightening, Recovering

MAPLETREE COMMERCIAL TRUST (SGX:N2IU)

Mapletree Commercial Trust - Re-tightening, Recovering

Mapletree Commercial Trust (SGX:N2IU)’s revenue and NPI eased q-o-q in 1Q22, as VivoCity’s operating metrics softened due to reinstatement of COVID-19 measures in Singapore, even as it delivered stronger y-o-y comparisons. The results were operationally in line with both consensus and our estimates and we maintain our forecasts and S$2.35 DDM-based target price (COE: 5.9%, 2.0%) for Mapletree Commercial Trust.

Mapletree Commercial Trust's balance sheet remains strong with an estimated S$01.0-1.8b debt headroom (at 40-45% limit). Valuations are undemanding at 4.5% dividend yield, with improved DPU visibility after its MBC II acquisition, and added traction from VivoCity’s recovery into the coming quarters.

Mapletree Commercial Trust's 1Q22 revenue jumped 23.7% but dipped 4.7% q-o-q, while NPI increased by 22.9% y-o-y and fell 4.2% q-o-q, as:
- rental rebates at 0.6 months of fixed rents were significantly lower than in 1Q21; and
- compensation received from a pre-terminated lease at mTower bolstered a 7.6% y-o-y/ 7.7% y-o-y growth in revenue/ NPI for its office/business park assets.
As a result, portfolio occupancy was lower at 92.6% as of end-Jun 2021, from 93.5% in 4Q21, even as it rose at MBC (from 94.2% to 96.6%) and VivoCity (97.1% to 99.4%), with Mapletree Anson at 99.2% and MLHF fully committed.

Revenue/ NPI at VivoCity jumped 77.6% y-o-y/ 80.7% y-o-y but fell 21.1% q-o-q/ 20.4% q-o-q, as Frasers Centrepoint Trust (SGX:J69U) (with footfall at 53-65% and tenant sales at 84-91% in 2Q21) due to limitations on large-scale sales events, but with upside seen from further easing in capacities in 2H22. See also Frasers Centrepoint Trust - Maybank Kim Eng 2021-07-23: Resilient Occupancies.

Chua Su Tye Maybank Kim Eng Research | https://www.maybank-ke.com.sg/ 2021-07-26

SGX Stock Analyst Report BUY MAINTAIN BUY 2.350 SAME 2.350