Earnings season is well and truly underway – with many REITs reporting their latest quarterly financial results or business updates for the quarter ended 30 September 2021 (and over the past couple of days, I have been posting my reviews of the latest results published by the REITs I have investments in.)

Following Mapletree Logistics Trust (on Monday, and you can read my review here), as well as Mapletree Industrial Trust (on Tuesday, and you can read my review here), Mapletree Commercial Trust (SGX:N2IU) is the third Mapletree REIT to release its financial results for the first half of the financial year 2021/22 ended 30 September 2021 after market hours today.

Some introduction about the REIT before I begin – its portfolio consists of a total of 5 properties – 1 retail mall (in VivoCity), 2 office properties (in Mapletree Anson, as well as Bank of America Merrill Lynch Harbourfront), as well as 2 integrated development properties (in Mapletree Business City and mTower) – apart from Mapletree Anson, all of the REIT’s other properties are located in the Harbourfront precinct.

In the rest of this post, you will find my review of its latest financial performance, portfolio and debt profile, and also its distribution payout to unitholders:

Financial Performance (1H FY2020/21 vs. 1H FY2021/22, and Q2 FY2020/21 vs. Q2 FY2021/22)

1H FY2020/21 vs. 1H FY2021/22:

1H FY2020/211H FY2021/22% Variation
Gross Revenue
(S$’mil)		$218.7m$243.7m+11.5%
Property Operating
Expenses (S$’mil)		$47.2m$53.9m+14.1%
Net Property
Income (S$’mil)		$171.5m$189.9m+10.7%
Distributable Income
to Unitholders
(S$’mil)		$138.4m$146.5m+5.8%

Personally, I felt that the REIT’s latest set of year-on-year (y-o-y) results was a stable one on the whole – the 11.5% growth in its gross revenue was due to higher contribution across all of its properties – particularly, the improvements in revenue contribution in each of its properties is as follows:

  • VivoCity: Due to lower rental rebates granted to eligible tenants, the effects of step-up rents in existing leases, and higher turnover rent;
  • mTower: The improvement was due to compensation sum received from the pre-termination of leases, along with lower rental rebates granted to eligible retail tenants at ARC, and the effect of step-up rents in existing leases;
  • Mapletree Business City: The improvement was due to compensation sum received from pre-termination of leases, the effects of step-up rents in existing leases, lower rental rebates granted, positive rental reversion and higher carpark income;
  • Mapletree Anson: Due to lower rental rebates granted, and the effects of step-up rents in existing leases;
  • Merrill Lynch Harbourfront: Due to the effects of step-up rent in existing leases

The 14.1% y-o-y increase in its property operating expenses was due to higher marketing and promotion expenses, property management fees, staff costs, and property taxes.

Q2 FY2020/21 vs. Q2 FY2021/22:

Even though the REIT did not provide an update to its second quarter results, I managed to compute it based on the figures for the first quarter, as well as for the first half of the year, and you can find them in the table below:

1H FY2020/211H FY2021/22% Variation
Gross Revenue
(S$’mil)		$118.4m$119.6+1.1%
Property Operating
Expenses (S$’mil)		$25.7m$26.7m+3.7%
Net Property
Income (S$’mil)		$92.6m$93.0m+0.4%

My Observation: On a q-o-q basis, in my opinion, the growth was pretty muted though, where its top- as well as its bottom-line only edged up slightly.

Portfolio Occupancy (Q1 FY2021/22 vs. Q2 FY2021/22)

In this section, lets us take a look at the REIT’s portfolio occupancy profile for the current quarter under review (i.e. Q2 FY2021/22 ended 30 September 2021) compared against the previous quarter three months ago (i.e. Q1 FY2021/22 ended 30 June 2021) to find out if it has continued to remain resilient:

Q1 FY2021/22Q2 FY2021/22
Portfolio Occupancy
(Committed) (%)		95.4%96.0%
Portfolio WALE
(years)		2.4 years2.8 years

My Observations: Compared to the previous quarter, the REIT’s portfolio occupancy have improved slightly – with improvements in occupancy rate recorded in all of its properties except for Mapletree Anson – where its committed occupancy fell from 99.2% in Q1 FY2021/22 to 97.0% in Q2 FY2021/22.

As far as its lease expiries are concerned, for the second half of the current financial year, only 3.2% of the retail leases, as well as 0.2% of the office/business park leases will be expiring – which in my opinion is minimal.

Finally, looking at its rental reversions, I’m pleased to note that the REIT has managed to record a positive rental reversion for new and/or expiring leases for both its retail (at +3.5%) as well as in its office/business park properties (at +1.5%.)

Debt Profile (Q1 FY2021/22 vs. Q2 FY2021/22)

Next, let us take a look at the REIT’s debt profile – and just like how I have looked at its portfolio occupancy profile in the previous section, I will be putting the stats reported for the current quarter under review (i.e. Q2 FY2021/22 ended 30 September 2021) and compare against the stats reported in the previous quarter (i.e. Q1 FY2021/22 ended 30 June 2021), as follows:

Q1 FY2021/22Q2 FY2021/22
Aggregate Leverage
(%)		34.2%33.7%
Interest Coverage
Ratio (times)		4.8x4.8x
Average Term to
Debt Maturity (years)		4.0 years3.8 years
Average Cost of
Debt (%)		2.4%2.4%

My Observations: Its debt profile, compared to the previous quarter, remains largely unchanged. As far as its aggregate leverage is concerned, at 33.7%, there is still plenty of debt headroom for the REIT to embark on further yield-accretive acquisitions to boost return to its unitholders, before the regulatory limit of 50.0% is reached.

Another thing to note about its debt profile is that there are no borrowings maturing in the second half of the current financial year – which is good to note in my opinion.

Distribution Payout to Unitholders

For the first half of the financial year 2021/22, the REIT’s management have declared a distribution payout of 4.390 cents/unit, a 5.3% increase from the 4.17 cents/unit declared in the same time period last year.

If you are a unitholder of the REIT, you might want to take note of the following dates regarding its distribution payout:

Ex-Date: 03 November 2021
Record Date: 05 November 2021
Payout Date: 30 November 2021

Closing Thoughts

Personally, I felt that the REIT’s latest set of results was a pretty decent one – its financial results, on a y-o-y basis, have recorded a steady growth. The same can also be said about its portfolio occupancy (where all of its properties have a committed occupancy rate of more than 95.0% except for mTower, which is at 80.4%), and also its debt profile (where there are no borrowings expiring in the second half of the current financial year, and that there remains plenty of debt headroom for the REIT to embark on more yield-accretive acquisitions as and when an opportunity to do so arises.)

The only slight negative, if you ask me, would be that on a q-o-q basis, its performance was pretty much muted.

With that, I have come to the end of my review of blue-chip REIT Mapletree Commercial Trust’s latest results for the first half of the financial year 2021/22. I do hope you’ve found the contents above useful. Also, do take note that everything you’ve just read in this post does not imply any buy or sell calls for the REIT’s units. Please 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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