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Mapletree Commercial Trust - UOB Kay Hian 2022-01-03: Geographical Diversification With Significant Yield Accretion

MAPLETREE NORTH ASIA COMM TR (SGX:RW0U) | SGinvestors.io MAPLETREE COMMERCIAL TRUST (SGX:N2IU)

Mapletree Commercial Trust - Geographical Diversification With Significant Yield Accretion

  • Mapletree Commercial Trust (SGX:N2IU) and Mapletree North Asia Commercial Trust (SGX:RW0U) have jointly proposed a merger effected by a trust scheme of arrangement. The merger will increase AUM by 94% and propel the combined REIT into becoming Asia’s 7th-largest REIT with a diversified portfolio of 18 commercial properties across Singapore, Hong Kong, Mainland China, Japan and South Korea.
  • Mapletree Commercial Trust's unitholders are expected to benefit from accretion to pro forma 1HFY22 DPU by 7.5% (scrip only) to 8.9% (scrip and cash). Maintain BUY.



📢 Mapletree Commercial Trust (SGX:N2IU) and Mapletree North Asia Commercial Trust (SGX:RW0U) announce proposed merger...

Posted by SGinvestors.io on Thursday, December 30, 2021


Coming together to create Mapletree Pan Asia commercial REIT.

  • Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) have jointly announced a proposed merger effected by a trust scheme of arrangement to create a flagship commercial REIT. Mapletree North Asia Commercial Trust unitholders will receive a scheme consideration of S$1.1949 per unit (aggregate scheme consideration is S$4,215.6m) to be satisfied by either:
    1. 0.5963 new Mapletree Commercial Trust units at an issue price of S$2.0039 per Mapletree North Asia Commercial Trust unit (scrip only)
    2. 0.5009 new Mapletree Commercial Trust units (84%) and S$0.1912 in cash (16%) (scrip and cash)
  • Extending geographical coverage to North Asia. Mapletree North Asia Commercial Trust is the first S-REIT to focus on investing in high-quality commercial properties located in North Asia. Its assets under management (AUM) was S$8.4b as of Sep 21. It owns 13 properties in
    • Hong Kong (retail mall Festival Walk),
    • Mainland China (office building Gateway Plaza in Beijing and business park property Sandhill Plaza in Zhangjiang Science City at Shanghai’s free trade zone),
    • Japan (nine office buildings – five in Tokyo, one in Yokohama and three in Chiba) and
    • South Korea (office building The Pinnacle Gangnam at Gangnam-gu, Seoul).

Scaling the league table.

  • The combined entity Mapletree Pan Asia Commercial Trust (MPACT) will South Korea with AUM of S$17.1b.


Significant positive impact on DPU and NAV.

  • Mapletree Commercial Trust unitholders are expected to benefit from leverage post-merger ranges from 38% (scrip only) to 39.2% (scrip and cash), representing an increase of 4.3-5.5ppt.


Increased diversification across geographies and asset classes.

  • Management is keen to acquire and business travellers. Festival Walk managed to maintain occupancy rate at 99.9% as of Sep 21. However, average rental reversion has worsened to negative 30% in 1HFY22. Festival Walk accounted for 26% of MPACT’s AUM.


Revised management fees.

  • Mapletree Pan Asia Commercial Trust (MPACT) will adopt a new management fee structure with base fee at 10% of distributable income and performance fee at 25% of y-o-y change in DPU. The new management fee structure will better align MPACT to unitholders’ interest.


Indicative timeline.






Jonathan KOH CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2022-01-03
SGX Stock Analyst Report NOT RATED MAINTAIN NOT RATED 99998.000 SAME 99998.000



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