Mapletree Commercial Trust

Mapletree Commercial Trust: 9M13 DPU of ¢4.75c was in line, but at the higher end of estimates. NPI margins improved YoY as MCT benefitted from cost initiatives rolled out earlier, including savings from electricity consumption and some savings from term-contracts related expenses like cleaners and security. During the yr, mgt re-signed 219 leases, bulk of which were at VivoCity (213 expiring this year, mostly specialty) which saw 44% reversion for offices and 33% reversion for retail. Portfolio occupancy was high at 98.8% led by ARC, PSAB and VivoCity. Mapletree Anson acquisition was approved at EGM on 23 Jan, where the $650m will be part financed with debt and equity. SCB see potential upside for rents if the manager were to undertake some enhancement initiatives for the asset to attract higher-value tenants to areas of the mall where traffic is the strongest. Acquisition of Mapletree Business City can still be potentially 5-10% accretive if executed over the next 2-3 yrs. Grp will also be carrying out a placement of up to 197.4m new shares, at the issue price of $1.17, to raise $230.9m, for the Mapletree Anson acquisition. The Private Placement was approximately 2.9 times over-subscribed and saw strong participation from new and existing institutional investors. At current price, grp trades at 5.1% yield and 1.1x P/B and gearing remains fair at 33.9%. Ratings as follow: CIMB maintains O/p with $1.39 TP Citi maintains Buy with $1.42 TP CS maintains O/p with $1.38 TP SCB upgrade to O/p with $1.34 TP