This morning (23 May 2022), Mapletree Commercial Trust (SGX:N2IU) held its Extraordinary General Meeting (EGM) to seek unitholders’ approval on the REIT’s proposed merger with Mapletree North Asia Commercial Trust (SGX:RW0U).
As the CEO’s presentation was exactly the same as that delivered during the dialogue session organised by SIAS with the REIT’s unitholders on 11 May, you can read about it in full in a separate post here.
What you’ll find in this post are responses provided by the REIT’s management during the live Q&A session, along with results of the 4 resolutions put to vote during the meeting:
Responses Provided by the REIT’s Management to Questions Raised by EGM Attendees
- Responding to a question on why Mapletree Logistics Trust (SGX:M44U) was not considered for the merger, but Mapletree North Asia Commercial Trust, Chairman Tsang Yam Pui said that the latter’s nature of business (which invests in retail, office, and business park properties) are aligned to Mapletree Commercial Trust’s. Also, Mapletree Logistics Trust invests in logistics properties, which is a totally different sector altogether.
- On the extent to which Covid-19 have impacted Mapletree North Asia Commercial Trust, CEO Ms Sharon Lim shared that most of the impact were directly felt by the retail sector – where the REIT only had one property in Festival Walk. She added that while the particular property is still recording a negative rental reversion, but it has shown improvements (from -34.0% in the first quarter to -18.0% in the fourth quarter of FY2021/22.) For the office and business park properties, Ms Lim shared that they have continued to remain resilient.
- Another unitholder wanted to know the overall investment strategy of the merged entity (in Mapletree Pan Asia Commercial Trust, or MPACT), targeted geographical concentration, as well as its criteria for selection (of properties into invest in.) In response, Ms Lim said that the REIT’s investment preference will be towards office and business park properties (along the scales of Sandhill Plaza in China and Mapletree Business City in Singapore), while remaining very selective on retail properties (where they should preferably be “best-in-class” properties, as well as be minimally affected by structural changes.) On the second part of the question relating to targeted geographical concentration, Ms Lim said that 50+% of MPACT’s Asset Under Management (AUM) will continue to remain in Singapore, which will continue to provide stability for the REIT, with the remaining in key gateway markets to pursue growth. She added that the REIT will continue to remain invested and open to further opportunities in the Singapore, Korea, and Japan market, but for the Hong Kong market, the REIT will wait till Festival Walk has fully recovered before pursuing further investments in the geographical location. Finally, on the criteria for selection, Ms Lim shared that some of the evaluation criteria include whether or not the asset (i) is a quality fit (to the REIT’s overall portfolio); (ii) has any upsides to leasing; (iii) financial returns.
- One unitholder was concerned by MNACT being inferior in terms of its DPU, NAV, and AUM growth compared to MCT over the years, and that the merged entity will be adversely impacted. In response, Ms Lim said that while she understood the unitholder’s concerns and acknowledged the “bumpy roads” ahead, but she also expressed her confidence in the assets (of MNACT) recovering to a certain level which the REIT is comfortable with in the foreseeable future. She also stressed the need to focus on MNACT’s ability to provide MCT with a ready platform to swiftly take advantage of and expand its business presence into key gateway markets (as opposed to embarking on individual asset acquisitions which is very time consuming, and hence, the growth rate will not be as fast as compared with through the proposed merger.)
Results of the 4 Resolutions Put to Vote during the EGM
- Resolution 1, which is to approve the proposed Merger of Mapletree Commercial Trust and Mapletree North Asia Commercial Trust by way of a trust scheme of arrangement, was passed with 91.67% of the votes for, and 8.33% of the votes against.
- Resolution 2, which is to approve the proposed allotment and issuance of units of Mapletree Commercial Trust to the holders of units in Mapletree North Asia Commercial Trust as full or part of the consideration for the Merger, was passed with 91.70% of the votes for, and 8.30% of the votes against.
- Resolution 3, which is to approve the Whitewash Resolution in relation to the Concert Party Group, was passed with 85.73% of the votes for, and 14.27% of the votes against.
- Resolution 4, which is to approve the proposed amendments to the MCT Trust Deed to adopt the Management Fee Supplement, was passed with 92.15% of the votes for, and 7.85% of the votes against.
- Responses to Substantial and Relevant Questions
- Responses to Additional Substantial and Relevant Questions – II
Disclaimer: At the time of writing, I am a unitholder of Mapletree Commercial Trust.
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