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Singapore IPOs: Why I No Longer Cover Every Listing

Some readers may have noticed that I have not been writing about every Singapore IPO since last year. The simple reason is that life has become busier. Between my day job, an increasingly packed travel schedule, family commitments and desire to play more golf, I have become much more selective about how I spend my time.  Writing detailed IPO reviews takes time — reading prospectuses, analysing financials, comparing valuations and understanding the competitive landscape. While I still enjoy investing and writing, I no longer feel the need to cover every IPO that comes to market. Instead, going forward, I will probably focus only on IPOs where I am seriously considering investing my own money or where there is something particularly interesting that is worth discussing. I suspect this will make the blog more useful as well. Rather than writing about every deal, I can spend more time sharing my thoughts on the handful that I believe deserve attention. That bring...
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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 ïnjected" 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.
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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?
21 April 2011 at 19:53
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?
21 April 2011 at 23:29
Mr. IPO 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.
23 April 2011 at 10:55
Anonymous said…
Btw, what's the nav/ share and gearing after IPO?
23 April 2011 at 11:05
Anonymous said…
Gearing at 41% while NAV is 0.91. From research, it has the highest gearing.
24 April 2011 at 09:39
Dennis The Menace said…
I would generally not go near anything in the financial or real estate market with all the overbuilding worldwide.
20 December 2011 at 10:47
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