8 things I learned from the 2017 Mapletree Commercial Trust AGM

Mapletree Commercial Trust (MCT) (SGX: N2IU) is a REIT with a portfolio of office and retail properties in Singapore. The jewel in MCT’s portfolio is VivoCity, Singapore’s largest mall, which continues to enjoy strong sales and shopper traffic due to its location as the only megamall in the area and its proximity to Sentosa.

Besides VivoCity, MCT’s portfolio also comprises PSA Building, a 40-storey office block and a three-storey retail centre known as Alexandra Retail Centre; two premium office buildings, Mapletree Anson, and Merrill Lynch HabourFront; and one of the largest office and business park complexes in Singapore, Mapletree Business City I (MBC I). As at 31 March 2017, MCT’s portfolio is valued at S$6.3 billion.

I attended MCT’s 2016 AGM before the acquisition of MBC I, so it was with anticipation that I attended this year’s annual meeting to find out how the REIT had performed over the past year with the contribution of its latest acquisition.

Here are eight things I learned from the 2017 Mapletree Commercial Trust AGM:

1. Gross revenue increased 31.3% year-on-year to S$377.7 million and net property income (NPI) increased 32.4% to S$292.3 million. This was driven by a stronger performance from MCT’s existing portfolio and the contribution from MBC I from August 2016 onwards. Excluding MBC I’s contribution, gross revenue and NPI increased 5.3% and 4.6% respectively.

2. Distributable income rose 31.7% year-on-year to S$227.2 million and distribution per unit rose 6.0% to 8.62 cents. Net asset value per unit increased 6.2% was to S$1.38. Based on MCT’s closing price of S$1.60 (as at 28 July 2017), the REIT is trading 15.9% above its book value and its distribution yield is 5.4%.

3. Mapletree Commercial Trust is now the fifth largest REIT in Singapore by market capitalisation after its acquisition of MBC I. CEO Sharon Lim said the larger market cap will improve share liquidity and give the REIT better index representation and traction with institutional investors.

4. A unitholder asked if the REIT would be acquiring Mapletree Business City II anytime soon. Chairman Tsang Yam Pui replied MCT’s sponsor will begin talks when the time is right. He also stated that MCT has no intention in expanding overseas for the time being. Besides MBC II, MCT also has the first right of refusal for seven properties from its sponsor including HabourFront Centre, HabourFront Towers 1 & 2, and St James Power Station.

5. Gearing ratio as at 31 March 2017 is at 36.3%, which is comfortably below management’s internal threshold of 40%. Average debt maturity extended to 4.0 years (from 3.4 years) and average cost of debt is increased to 2.66% p.a. (from 2.52% p.a.). Interest coverage ratio is 4.9 and 81.2% of debt is hedged at fixed interest rates.

6. Portfolio occupancy rate is at 97.9%. The exception is Merrill Lynch HabourFront with an occupancy rate of just 79.2%. The vacancy is due to Merrill Lynch releasing one floor of the building but the CEO shared that MCT has since leased out a portion of the space and the committed occupancy for Merrill Lynch HabourFront is actually at 91.6%. MBC I achieved an 87% retention rare for expiring leases and recorded 8.5% in positive rent reversions. Weighted average lease expiry for the portfolio is at 2.7 years.

7. VivoCity contributes almost half of MCT’s revenue and NPI. Shopper traffic to the mall increased 4.8% year-on year to 55.8 million visitors and tenant sales increased 1.3% to S$951.8 million. Even though tenant sales rose modestly, the CEO compared this favourably to the Singapore retail sales index which fell 3.4%. VivoCity achieved positive rent reversions of 13.8% and occupancy rate stands at 99.0%. Though not immune to the challenges faced by the retail sector, she believes VivoCity will continue to outperform the market due to its transport links and large size which allows for a complete tenant mix within the mall. The mall also benefits from sizeable office crowds on weekdays and from tourists on their way to visiting Sentosa.

8. The National Library Board recently announced that The Bukit Merah Public Library will be moving to VivoCity next year. The CEO shared the new library will take up 30,000 square feet at level three of the mall. She believes the library will be a draw for shoppers and give them another reason to visit VivoCity.

Liked our analysis of this AGM? Click here to view a complete list of AGMs we’ve attended »

Adam Wong

Adam Wong is the editor-in-chief of The Fifth Person and author of the national bestseller Lucky Bastard! which made the Sunday Times Top 10 Bestseller's List in 2009 and Value Investing Made Easy which made the Kinokuniya Business Bestseller's List in 2013. In 2010, he appeared on U.S. national television on the morning show The Balancing Act. An avid investor himself, Adam shares his personal thoughts and opinions as he journals his investing journey online.


  1. Thank you Mr Adam Wong forwarding your observations on mapletree industrial reit in your recent attendance of the AGM. It was informative in guiding me in my investment decision to buy or sell.

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