Blue-chip retail, office, and business park REIT, Mapletree Commercial Trust (SGX:N2IU), published its latest annual report for the financial year ended 31 March 2021 (i.e. FY2020/21) early yesterday morning (23 June 2021), along with a notice of its upcoming annual general meeting (AGM.)

As I am a unitholder of the Singapore-listed REIT, I have studied the documents posted and in this post, you will find a summary of the most important aspects to take note of, details of its upcoming AGM, and also my personal thoughts to share.

Let’s get started…

Letter to Unitholders by Chairman Mr Tsang Yam Pui and CEO Ms Sharon Lim

Covid-19 Pandemic:

  • Mapletree Commercial Trust rolled out ‘one of the most comprehensive plans in the market to assist our tenants in coping with the mounting pressures.’
  • In particular, it announced its first tenant support programme in February 2020 worth S$11.0m.
  • As at the end of FY2020/21, the REIT rolled out a total of 7 tenant support packages worth a total of S$70.0m (this is inclusive of the grants and rebates by the Singapore government) to eligible retail tenants to help them offset more than 4 months of fixed rents.

FY2020/21 Performance Highlights:

  • Gross revenue fell by 0.8% to S$479.0m (FY2019/20: S$482.8m), while net property income edged down by 0.2% to S$377.0m (FY2019/20: S$377.9m) due to rental rebates given out to tenants affected by the pandemic, offset by maiden full-year contributions by Mapletree Business City II (acquired on 01 November 2020.)
  • Distribution payout to unitholders improved by 29.4% to S$314.7m (FY2019/20: S$243.2m), as a result of the REIT releasing a total of S$28.0m of cash retained in the fourth quarter of FY2019/20 (out of a total of S$43.7m of distributions retained in the quarter, as the REIT sought to balance having enough reserves for rainy days, and delivering reasonable returns to its unitholders.)
  • As a result, its distribution per unit also climbed by 18.6% to 9.49 cents/unit (FY2019/20: 8.00 cents/unit.)
  • Mapletree Commercial Trust’s portfolio occupancy remained resilient even in the midst of all the uncertainty surrounding the ongoing Covid-19 pandemic – with the committed occupancy rate of VivoCity inching down by just 0.6 percentage points to 99.1% (compared to 99.7% last year, and this can be attributed to the REIT’s proactive asset management approach to retain a good portion of tenants), Mapletree Business City I’s committed occupancy at 94.6%, mTower at 91.7%, and the remaining properties (Mapletree Business City II, Mapletree Anson, and Merrill Lynch Harbourfront) all 100.0% occupied.
  • On the REIT’s debt profile, its aggregate leverage as at 31 March 2021 is at 33.9%, with a weighted all-in cost of debt averaged at 2.48% per annum, and an interest coverage ratio of 4.4x. Only 2% (or mere S$70m) of its total debts will mature in the coming financial year 2021/22 ahead.

Looking Ahead:

  • In tandem with the phased easing of Covid-19 protocols, shopper traffic and tenant sales at VivoCity have improved progressively – with its monthly tenant sales between January and March 2021 more than 86.0% compared to the corresponding months in 2019 (pre-Covid.)
  • The management is of the opinion that recovery is expected to be uneven across sectors, and that it will take time for the retail, office, and business park markets to resume full leasing momentum.
  • In the near-term, they will continue to work closely with their tenants to provide targeted assistance where warranted.

Top 10 Tenants by Gross Rental Revenue in FY2020/21

The REIT’s top 10 tenants contributed a total of 28.5% towards its overall gross rental income in FY2020/21.

Another thing to note is that, apart from Google Asia Pacific Pte Ltd and Merrill Lynch Global Services Pte Ltd, no one single tenant contributed more than 3.0% towards the REIT’s overall gross rental income:

Tenant% of Gross
Rental Income
1.Google Asia Pacific Pte Ltd10.7%
2.Merrill Lynch Global Services Pte Ltd3.2%
3.(Undisclosed Tenant)
4.The Hongkong & Shanghai Banking Corporation
5.Info-Communications Media Development
6.SAP Asia Pte Ltd2.0%
7.Mapletree Investments Pte Ltd2.0%
8.NTUC Fairprice Co-operative Ltd1.9%
9.Samsung Asia Pte Ltd1.8%
10.WeWork Singapore Pte Ltd1.7%

Mapletree Commercial Trust’s Gross Revenue Contribution by Properties in FY2020/21

Property% of Gross Revenue
2.Mapletree Business City I26.9%
3.Mapletree Business City II18.0%
5.Mapletree Anson7.2%
6.Merrill Lynch Harbourfront4.2%

Details of Mapletree Commercial Trust’s Upcoming AGM

The 10th AGM of Mapletree Commercial Trust will be held online (no physical attendance allowed due to the current safe distancing measures in place) on Thursday, 22 July 2021, at 2.30pm.

Unitholders can sign up to attend the meeting here, along with submitting any questions you may have for the REIT’s management (the deadline to do so is on Monday, 19 July 2021, at 2.30pm.)

I have already signed up to attend the meeting as a unitholder of the REIT, and will be publishing a summary of it in due course.

Closing Thoughts

Overall, I am optimistic of the long-term prospects of the blue-chip REIT. One thing I like is its debt profile, where, at just 33.9%, there remains plenty of debt headroom for the REIT to make further yield-accretive acquisitions as and when an opportunity to do so arises.

Also, it is encouraging to note that VivoCity’s (the retail mall is currently the biggest contributor towards the REIT’s overall gross revenue in FY2020/21) tenant sales for the fourth quarter of FY2020/21 (between 01 January and 31 March 2021) is about 80.0% of pre-Covid levels.

No doubt tenant sales for the near-term may dip due to the Phase 2 (Heightened Alert), and the current Phase 3 (Heightened Alert) measures, but personally, I foresee the disruption to be a short-term one. I am of the opinion that the worst is beyond us and that, barring a similar situation that saw Singapore go into ‘circuit breaker’ mode last year, we should see an eventual recovery moving forward (even though it will be a slow one.)

With that, I have come to the end of my share on Mapletree Commercial Trust’s latest FY2020/21 annual report. Hope you have enjoyed the read, and have benefitted from the contents presented above.

Related Documents

Disclaimer: At the time of writing, I am a unitholder of Mapletree Commercial Trust.

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