Mapletree Commercial Trust (SGX: N2IU), or MCT, is the owner of Singapore’s largest mall, VivoCity, together with the PSA Building, Bank of America Merrill Lynch HarbourFront, Mapletree Anson, and Mapletree Business City I.
There are two things about the REIT that investors may want to know about right now: its latest financial performance and valuation.
Here’s a table showing important items from MCT’s financial performance for the first quarter of financial year ending March 2019 (1Q FY18/19).
Source: MCT’s Press Release
Overall, we see that all metrics came in positive or stable as compared to the same period last year.
The REIT’s CEO, Sharon Lim, commented:
“This marks an exciting first quarter for MCT as we make tremendous progress on the AEI at VivoCity. We launched the Basement 1 extension in June 2018, adding approximately 24,000 square feet of new retail space that houses 10 exciting lifestyle and athleisure brands. The rest of the AEI remains well on track, and we are looking forward to welcome the public library on Level 3 by 2H FY18/19. We are also very pleased to have Zara, Superdry and Pull & Bear reopened at VivoCity with new and larger format concept stores during the quarter. This is a strong endorsement of VivoCity’s attractiveness and will further define its positioning as a key destination mall.
In spite of the downtime resulting from spaces vacated to make way for the public library on Level 3, and to create concept stores on Level 1, VivoCity achieved a 2.3% growth in NPI for 1Q FY18/19. Together with the higher contribution from MLHF, PSA Building and MBC I, we continued to deliver steady returns in terms of NPI and DPU.”
The REIT’s portfolio had a committed occupancy rate of 99.2% and gearing ratio of 34.7%, as at 30 June 2018.
There are two useful valuation metrics for assessing REITs. They are the price-to-book (PB) ratio, and the distribution yield.
The table below shows MCT’s PB ratio and distribution yield. It also shows the respective averages for the two valuation metrics for the 41 REITs that are in Singapore’s stock market.
Source: SGX StockFacts; data as of 24 September 2018
We can see that MCT is trading at a premium to market average based on its low distribution yield and high PB value.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended units of Mapletree Commercial Trust. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.