After trading hours last Thursday (23 July), blue chip REIT Mapletree Commercial Trust (SGX:N2IU) released its business updates for the first quarter of the financial year 2020/21 ended 30 June 2020.
As the REIT switched to a half-yearly reporting from this financial year onwards, for the first and third quarter, it will only be posting a business update. Also, the REIT will be paying out a distribution to unitholders on a half-yearly basis (instead of on a quarterly basis in the past.)
With that, I will be highlighting some of the key pointers in the REIT’s latest business update to take note of (along with my thoughts to share):
Financial Performance (Q1 FY2019/20 vs. Q1 FY2020/21)
| Q1 FY2019/20 | Q1 FY2020/21 | % Variance | |
| Gross Revenue (S$’mil) | $112.1m | $100.3m | -10.5% |
| Property Operating Expenses (S$’mil) | $23.8m | $21.5m | -9.7% |
| Net Property Income (S$’mil) | $88.3m | $78.9m | -10.7% |
On one look, it was a weaker set of results for the REIT, which Chief Executive Officer Ms Sharon Lim attributed it to the 8-week circuit breaker, and the continued closure of most businesses during the first phase of Singapore’s re-opening from 02 to 18 June 2020.
Ms Lim also updated that a majority of tenants in VivoCity have since resumed their operations with Phase 2 lifting of the circuit breaker from 19 June. However, she opined that it will take some time for the retail business to return to pre-Covid-19 levels due to continued work-from-home directives, border closures, social distancing measures, along with disruptions in manpower and global supply chains.
My Thoughts: The quarter-on-quarter (q-o-q) drop was within my expectation, as the retail mall VivoCity contributed 47.5% towards the REIT’s gross revenue in Q1 FY2019/20, and a drop in the mall’s contribution will definitely impact the REIT’s gross revenue.
That said, I am of the opinion that the worst is beyond us (barring unforeseen circumstances.) However, recovery will be a slow and gradual one (and very much dependent on the overall situation as far as containment of Covid-19 is concerned.)
Debt Profile (Q4 FY2019/20 vs. Q1 FY2020/21)
Compared to the previous quarter (i.e. Q4 FY2019/20 ended 31 March 2020), how is the REIT’s debt profile in the quarter under review (i.e. Q1 FY2020/21 ended 30 June 2020) like?
Let us find out in the table below:
| Q4 FY2019/20 | Q1 FY2020/21 | |
| Gearing Ratio (%) | 33.3% | 33.7% |
| Interest Coverage Ratio (times) | 4.3x | 4.1x |
| Average Term to Debt Maturity (years) | 4.2 years | 3.9 years |
| All-in Average Cost of Debt (%) | 2.94% | 2.61% |
My Thoughts: While there was a slight increase in the gearing ratio, along with a slight decrease in its interest coverage ratio, but in my opinion, its current gearing ratio is still a safe distance away from the 50.0% regulatory limit, so I am not too concerned here.
One positive thing to note is that, compared to the previous quarter, its cost of debt have dropped.
Portfolio Occupancy Profile (Q4 FY2019/20 vs. Q1 FY2020/21)
Similar to the REIT’s debt profile, I will also be looking at its portfolio occupancy profile for the quarter under review (i.e. Q1 FY2020/21) and compare it with the previous quarter (i.e. Q4 FY2019/20) to find out if it has improved or deteriorated:
| Q4 FY2019/20 | Q1 FY2020/21 | |
| Committed Portfolio Occupancy (%) | 98.7% | 98.2% |
| Weighted Average Lease Expiry (years) | 2.6 years | 2.6 years |
My Thoughts: There was a slight decline in Mapletree Commercial Trust’s committed portfolio occupancy compared to the previous quarter, due to a lower committed occupancy in VivoCity (a 1.3 percentage point drop from 99.7% to 98.4%), and in PSA Building (a 2.3 percentage point drop from 92.7% to 90.4%.) All the other properties in the REIT’s portfolio have their occupancy rates remaining the same.
Again, I am not too concerned by the slight dip, as the REIT’s portfolio occupancy still remains resilient in my opinion at above 90.0%.
In Conclusion
The most recent set of results reported but the REIT should not come as a surprise to us unitholders, as the period under review – 01 April to 30 June 2020, encompassed the entire 2-month circuit breaker period where a huge majority of retail shops had to temporarily shut, with rental rebated handed out by the REIT to affected tenants.
Just as I have mentioned earlier in this post in my opinion, the worst is beyond us, and barring any unforeseen circumstances, we should expect a better set of results over the remaining quarters of the financial year.
Related Documents
Disclaimer: At the time of writing, I am a unitholder of Mapletree Commercial Trust.
REITs vs Banks: Which Investment Delivers More for Income Seekers?
If you thought 2025 was a wild ride for the stock market, wait until you see 2026! With not only the uncertainty of interest rate changes and geopolitical tensions but also a military operation by Israel and the United States against Iran, it's set to be even more turbulent.
So, with all this in mind, which is the better choice for income investors: REITs or banks?
I'm honoured to be re-invited by Dinah Poehlmann from Your Finance Mind for a fireside chat on Zoom this year, where I'll be sharing my insights on this topic.
Join me on Thursday, 19 March 2026, from 8pm to 9pm, as I offer my thoughts and answer any questions you may have.
Best part? Registration is completely free! Secure your spot now through the link below:
👉 Sign Up Now and Mark Your Calendars
Are You Worried about Not Having Enough Money for Retirement?
You're not alone. According to the OCBC Financial Wellness Index, only 62% of people in their 20s and 56% of people in their 30s are confident that they will have enough money to retire.
But there is still time to take action. One way to ensure that you have a comfortable retirement is to invest in real estate investment trusts (REITs).
In 'Building Your REIT-irement Portfolio' which I've authored, you will learn everything you need to know to build a successful REIT investment portfolio, including a list of 9 things to look at to determine whether a REIT is worthy of your investment, 1 simple method to help you maximise your returns from your REIT investment, 4 signs of 'red flags' to look out for and what you can do as a shareholder, and more!
You can find out more about the book, and grab your copy (ebook or physical book) here...
Comments (0)