By market capitalisation, Mapletree Commercial Trust (SGX: N2IU) currently sits just outside the top 30 stocks which form the Straits Times Index.
Mapletree Commercial Trust is a REIT which portfolio consists of five prime buildings in Singapore, with the most notable one being VivoCity, largest shopping mall in Singapore. At the end of March 2019, the assets were valued at S$7.04 billion, with VivoCity being the largest asset at S$3.20 billion. In the fiscal year ended 31 March 2019, Mapletree Commercial Trust’s revenue grew 2.4%, a respectable number for tenanted properties.
While Mapletree Commercial Trust’s net asset value (NAV) per unit grew 7.4%, its gearing level fell 1.4 percentage points to 33.1%. The increase in NAV per unit is testament to the management’s ability to create shareholder value. The gearing ratio is also reasonable, with some room to gear up for acquisitions if opportunities arise.
VivoCity’s revenue grew 3%, driven by higher rental income from new and renewed leases, and step-up rents in existing leases. The increase came despite renovation works conducted during the year, demonstrating the resiliency of the mall. The refurbishment works are scheduled for completion later this year. Upon completion, revenue could be expected to increase.
According to the CEO of Mapletree Commercial Trust, VivoCity’s prospects are bright as the new anchor tenant has started fit-out works since April 2019. Another anchor tenant is also expanding. New lifestyle and F&B stores are also expected to open in the near future.
Mapletree Commercial Trust has a distribution yield of around 4.5%, a decent figure. Investors may find it worthwhile to hold a strong REIT.