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Thursday, 21 April 2011

Mapletree Commercial Trust

Mapletree Commercial Trust ("MCT") is offering 712.894m units at $0.88 per unit subject to over-allotment. The IPO will close on 25 Apr at 9am.

MCT is a commercial REIT and offers 3 properties, namely Vivocity, Harbourfront and PSA building in its initial portfolio.  There is a strong pipeline likely to be injected into MCT, such as Mapletree Business City, Mapletree Anson, Mapletree Lighthouse etc.  The yield is projected at 5.7% for FY11/12 and growing to 6.2% for FY12/13.  

Basically this is a REIT and a yield play. The positive thing is that the properties are located in Singapore and hence not subject to significant forex exposure, however, investors should be aware that any properties being ├»njected" will also be made at current market value and will earn the manager some 'performance fees'.    

The market cap of MCT will be S$2.82 billion at IPO and it made a net income of $78m in FY March 2010.  The cornerstone investors are AIA, Itochu, NTUC Fairprice and Hillsboro.

My view:  This is one of the REITs which Mapletree is bringing to the market. The Mapletree Industrial trust being the most recent REIT launched by the them prior to this. The yields are decent and share price is likely to be well supported but dont expect too much of  a fireworks. However, considering the good location of Vivocity being close to the Resort Worlds and the upcoming pipeline, it will something which investors can consider adding to its long term portfolio.


Anonymous said...

how much do you think it will open at? I tried pairing with capmall at 72% and capcom at 28% in terms of its yield and realised it can hit 96 cents. What is your opinion on this?

Anonymous said...

By the way, I did more research, and found that its closest match seems to be Suntec REIT. 6.4%, NAV 1.8 vs current 1.5. Same credit rating but much bigger and diversified portfolio inclusive of one raffles quay. Thus, do you think it will gap down to match 6.4% yield instead?

2Y Capital said...

Thanks for the contribution. Personally i dont think it will "tank per say" but perhaps Suntec can do a 'catch up' to this.

Looking at the low yields, any fall in price will most probably be supported by retail and institutional investors.

Anonymous said...

Btw, what's the nav/ share and gearing after IPO?

Anonymous said...

Gearing at 41% while NAV is 0.91. From research, it has the highest gearing.

Dennis The Menace said...

I would generally not go near anything in the financial or real estate market with all the overbuilding worldwide.

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