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Three Things To Know About Mapletree Greater China Commercial Trust

Mapletree Greater China Commercial Trust (SGX: RW0U) is a Singapore real estate investment trust (REIT) that aims to invest in real estates in the Greater China region which are used primarily for commercial purposes.

It is the first and only REIT that offers investors the opportunity to invest in commercial properties situated in prime locations in both Hong Kong and Mainland China.

MGCCT’s Portfolio comprises three commercial properties located in Hong Kong, Beijing and Shanghai, namely Festival Walk in Hong Kong, Gateway Plaza in the Lufthansa Area in Beijing and Sandhill Plaza in Zhangjiang Hi-Tech Park, Pudong New Area, Shanghai.

Investors or potential investors in this REIT should know three things about the trust.

Track record of distributable income and distribution per unit

One of the most important criteria for evaluating a REIT is to look at the long-term trend of its distributable income and distribution per unit. Here, we want to see that both measures have grown sustainably.

mgct-dpu

We can see that both metrics have been growing for the last 3 years.

Diversified income based

Another criterion that investors should look at when assessing the sustainability of a REIT’s income is the diversity of its income base.

A diversified income means that the REIT’s income is less likely to be affected by one particular property or customer group.

Below is a summary of income from the trust’s three properties.

mgct-revenue

Source – company’s investor presentation

Here, Mapletree is diversified in two separate ways – geographically and customer type.

Geographically, Festival is located in Hong Kong, Sandhill in Shanghai and Gateway in Beijing. The first is retail focused while the other two are office-related real estates.

Occupancy rate

Occupancy rate is an important metrics since this measures the strength of the market demand for a REIT’s property.

As at 30 September 2016, the overall portfolio occupancy level stood at 95.7%. Below is a quick summary of occupancy rates for the past 5 quarters.

mgct-occupancy

Source – company’s investor presentation

As we can see, the overall occupancy rates has declined in the last few quarters, due to the lower occupancy rate in Gateway Plaza.

The above is a quick glimpse of a few things that could give investors an overview of this trust.

Investors who find the above interesting may want to explore this trust further before committing any capital.

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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 contributor Lawrence Nga doesn’t own shares in any companies mentioned.