Three Things To Like About Mapletree Commercial Trust

mapletree commercial trustThere are probably a lot more than three things to like about Mapletree Commercial Trust (SGX: N2IU) – 2,109,080 things to be precise. That is the total Net Leasable Area (NLA) that the company currently has at its disposal.

Around half of the NLA can be found at VivoCity, which is not only Singapore’s largest mall but also a conduit to Resort World Sentosa. Thanks to its strategic location at Singapore’s HarbourFront Precinct, VivoCity attracts over 50 million visitors a year.

That is the first thing to like about Mapletree Commercial Trust, namely, the quality of its assets, which are concentrated in Singapore. Apart from VivoCity, the Real Estate Investment Trust (REIT) also owns Merrill Lynch Harbour Front, PSA Building and Mapletree Anson in Tanjong Pagar.

The second thing to like about Mapletree Commercial Trust is its above-average Return on Equity. The REIT generates S$16 of bottom-line profit for every $100 of shareholder equity. By comparison the RoE for CapitaCommercial Trust (SGX: C61U) is about half that at 7.7%. The exceptional RoE can be traced to its high Net Income Margin of 141%.

In the short time that the company has been listed on the Singapore market, Mapletree Commercial Trust has delivered a total annual return of 20.7%. That is the third thing to like about Mapletree Commercial Trust.

Around two-thirds of the returns has been generated through the appreciation in the share price and about one-third from reinvested dividends. At the current share price of S$1.36, Mapletree Commercial Trust yields 5.7%, which is higher than the market average.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.