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3 Things Mapletree Greater China Commercial Trust’s Management Wants You To Know About Its Business

In late January, Mapletree Greater China Commercial Trust  (SGX: RW0U) released its third quarter earnings report for the financial year ending 31 March 2018 (FY17/18).

As a quick introduction, Mapletree Greater China Commercial Trust has properties in China and Hong Kong. At the moment, the real estate investment trust (REIT) has three properties in its portfolio: Festival Walk, Gateway Plaza, and Sandhill Plaza.

The Manager of Mapletree Greater China Commercial Trust had given a presentation on the trust’s latest results. In the presentation deck, I saw three slides on the REIT’s business that I think investors should pay attention to.

The first slide shows a summary of Mapletree Greater China Commercial Trust’s income statement for the reporting quarter:


Source: Mapletree Greater China Commercial Trust FY17/18 third quarter earnings presentation

We can see that Mapletree Greater China Commercial Trust had a decent quarter, with growth in gross revenue, distributable income, and distribution per unit (DPU). The REIT’s performance was driven by revenue growth from all its three properties as a result of higher rent, which more than offset unfavourable currency movements.

The next slide I want to look at shows the REIT’s portfolio occupancy rates in the past few quarters:


Source: Mapletree Greater China Commercial Trust FY17/18 third quarter earnings presentation

Investors in a REIT need to pay attention to its occupancy rate as that is a signal of the demand for the REIT’s properties. In the case of Mapletree Greater China Commercial Trust, the table above show that its latest committed occupancy rate was lower both on a year-on-year as well as sequential basis. The weaker occupancy rate was mainly driven by the REIT’s office buildings, namely, Gateway Plaza and Sandhill Plaza.

The last slide I want to discuss shows the rental reversion rates for Mapletree Greater China Commercial Trust:


Source: Mapletree Greater China Commercial Trust FY17/18 third quarter earnings presentation

Ideally, a REIT should be able to generate positive rental reversion consistently. In the past five quarters, Mapletree Greater China Commercial Trust has done just that. All three of its properties have delivered positive rental reversions in the period.

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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.