Following its annual general meeting on Thursday, 22 July 2021, for the financial year 2020/21 which concluded on 31 March 2021, Mapletree Commercial Trust (SGX:N2IU) released its business updates for the first quarter of the financial year 2021/22 after market hours the following day (Friday, 23 July 2021.)
As the blue-chip REIT have switched to a half-yearly reporting (along with paying out distributions on a half-yearly basis as well), it did not provide a full profit and loss, and distribution statement – however, it did make available a snippet of the important figures.
In this post, let us take a look at these figures, along with its portfolio occupancy and debt profile, as well as my thoughts about the REIT’s latest updates and outlook in the remaining 3 quarters ahead…
Financial Results (Q1 FY2020/21 vs. Q1 FY2021/22)
| Q1 FY2020/21 | Q1 FY2021/22 | % Variation | |
| Gross Revenue (S$’mil) | $100.3m | $124.1m | +23.7% |
| Property Operating Expenses (S$’mil) | $21.5m | $27.2m | +26.5% |
| Net Property Income (S$’mil) | $78.9m | $96.9m | +22.8% |
Personally, I feel it is of no surprise that the REIT’s latest set of financial figures is an improved one, as in the same time period last year, its results was significantly impacted by the 2 month ‘circuit breaker’ implemented by the Singapore government to break the chain of Covid-19 transmission in the community.
Apart from that, the improvements in its gross revenue and net property income can be attributed to lower rental rebates (as most of the businesses were able to resume their normal business activities for the period under review, albeit with some safe distancing measures in place), along with compensation from a lease pre-termination at mTower.
Portfolio Occupancy Profile (Q4 FY2020/21 vs. Q1 FY2021/22)
Moving on, let us take a look at the REIT’s portfolio occupancy for the individual properties (where I’ll be looking at its committed occupancy rates) for the current quarter under review (i.e. Q1 FY2021/22 ended 30 June 2021) compared against the portfolio occupancy recorded in the previous quarter three months ago (i.e. Q4 FY2020/21 ended 31 March 2021) to find out whether or not it has improved, deteriorated, or remained more or less the same:
| Q4 FY2020/21 | Q1 FY2021/22 | |
| VivoCity | 99.1% | 99.4% |
| Mapletree Business City | N.A.* | 99.6% |
| mTower | 91.7% | 76.7% |
| Mapletree Anson | 100.0% | 99.2% |
| Merrill Lynch Harbourfront | 100.0% | 100.0% |
* I did not have the committed occupancy rates for Mapletree Business City for Q4 FY2020/21 as it was split between Mapletree Business City I and Mapletree Business City II then – with the former having a committed occupancy at 94.6%, while the latter having a committed occupancy at 100.0%.
My Observations: Apart from mTower (whose weakness led to the REIT’s overall portfolio occupancy rate declining from 97.1% as at 31 March 2021 to 95.4% as at 30 June 2021), I personally felt that on the whole, the portfolio occupancy for all of the REIT’s properties remain resilient, which is good to note.
As for the occupancy in mTower, I understand during the REIT’s AGM last Thursday (you can read a summary of the meeting here) that they are still in the process of finding tenants – I await for further updates regarding this.
Debt Profile (Q4 FY2020/21 vs. Q1 FY2021/22)
Next, let us take a look at the REIT’s debt profile. Just like how I reviewed its portfolio occupancy profile in the previous section, I will also be comparing the figures reported for the current quarter under review against that reported for the previous quarter three months ago, and you can find them in the table below:
| Q4 FY2020/21 | Q1 FY2021/22 | |
| Aggregate Leverage (%) | 33.9% | 34.2% |
| Interest Coverage Ratio (times) | 4.4x | 4.8x |
| Average Term to Debt Maturity (years) | 4.2 years | 4.0 years |
| Average Cost of Debt (%) | 2.48% | 2.44% |
My Observations: I personally felt that its debt profile have remained more or less consistent compared to the previous quarter. While its aggregate leverage edged up a little (to 34.2%), but I’m not too concerned, as there still remain plenty of headroom before the regulatory limit of 50.0% is hit.
For the remaining quarters of the financial year 2021/22, there aren’t any borrowings due. Also, I note that there are more than S$400m of cash and undrawn committed facilities put in place to meet working capital and financial obligations.
Closing Thoughts
Personally, I felt that the blue-chip REIT’s latest set of results is largely within my expectations (in terms of its financial performance.) As a unitholder, I’m happy to see that all of its properties (except for mTower) have continued to keep its committed occupancy rates high (at over 90+%), and that its debt profile have continued to remain resilient.
As for my outlook for the REIT in the next few quarters ahead, it will largely depend on the developments of Covid-19 – if Singapore is able to successfully contain the pandemic and gradually relax its safe management measures from 19 August, then it is likely that the REIT’s results for the quarters ahead will be a positive one. On the other hand, should there be big cluster outbreaks and further tightening of the safe management measures are required, then depending on the measures imposed, along with the duration, the REIT’s performance may be impacted.
With that, I have come to the end of my summary and review of Mapletree Commercial Trust’s latest business updates. Please note that all the opinions you have read above are solely my own, which I am sharing for educational purposes only. They do not represent any buy or sell calls for the REIT’s units. As always, you should always do your own due diligence before you make any investment decisions.
Related Documents
Disclaimer: At the time of writing, I am a unitholder of Mapletree Commercial Trust.
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