Mapletree Commercial Trust

Dear all

Interim Prospectus is out. Get it here

Summary:

No of units = 712,894,000

Public tranche: 164,835,000

Indicative Price range = 84c to 91c

IPO Portfolio:
1) VivoCity
2) Bank of America Merrill Lynch HarbourFront ; and
3) PSA Building

Total Valuation: 2.821 billion

Gross Floor Area: 2.629 m sq ft

Occupancy: 98%

Indicative yield: 5.47% - 5.92% (FY11); 5.96% - 6.46% (FY12)

Indicative DPU: 4.977c (FY11); 5.4264% (FY12)

Distribution frequency: Quarterly. 1st distribution for period up to 30 June 11 to be paid by Sep 2011.

Eh? I thought this IPO would be delayed due to "poor investor sentiment"?

Mapletree is very good at divesting their assets into REITs. First there was Mapletree Logistics Trust, then Mapletree Industrial Trust and now Mapletree Commercial Trust. Next up may be Mapletree Retail Trust?

What I do know is that Mapletree staff are probably getting lots of bonuses from all these divestments hahaha.

Business Times - 07 Apr 2011

Mapletree to raise up to $1b from commercial Reit IPO

Offering to be second-biggest here this year after HPH Trust's US$5.4b IPO

By UMA SHANKARI

(SINGAPORE) Mapletree Investments plans to raise up to $1.02 billion by listing three of its retail and office assets in a property trust, it said yesterday.

The deal values Mapletree Commercial Trust (MCT) at up to $1.69 billion. Mapletree Investments, which is fully owned by Temasek Holdings, will hold between 40 per cent and 45.5 per cent of the trust after the offer.

The initial public offering (IPO) will be the second-biggest listing in Singapore this year after the US$5.4 billion offering by Hutchison Port Holdings (HPH) Trust last month.

Mapletree Investments had planned to lodge the prospectus for MCT in March, but had to delay the IPO process due to volatile markets caused by the earthquake and tsunami in Japan.

In a preliminary prospectus filed with the Monetary Authority of Singapore yesterday, MCT said it will sell up to 814.4 million units (including an over-allotment option) at 84 cents to 91 cents per unit to institutional investors and the public.

In addition, cornerstone investors - including insurance company AIA Group - have committed to take up another 302.2 million units.

Including the sponsor's stake, there will be a total of 1.86 billion units. This places MCT's market capitalisation at between $1.56 billion and $1.69 billion.

Mapletree, for its part, will raise between $852.7 million and $1.02 billion from the IPO depending on the pricing and whether the over-allotment option is taken up.

The trust will initially hold three assets worth $2.82 billion in all - Singapore's largest mall VivoCity, and the Bank of America Merrill Lynch HarbourFront and PSA Building office buildings.

Mapletree Investments has also granted MCT the right of first refusal for the acquisition of properties with about 5.1 million square feet of net lettable area - including Mapletree Business City.

Analysts BT spoke to said the valuations of the three initial properties should be attractive to investors.

For example, the largest asset in MCT's portfolio, VivoCity, is valued at $1.98 billion, or around $1,900 per square foot of net lettable area. This compares favourably with similar malls in the portfolios of other retail real estate investment trusts (Reits) listed in Singapore, the analysts said.

Because of this, demand for MCT's units should still be strong in spite of recent market volatility, said an analyst with a foreign brokerage here.

'I think if the units are priced right, there is no reason why there shouldn't be demand, and right now, it (the pricing) looks pretty reasonable,' he said. 'It looks like the (projected) yields are in line with other blended retail and office Reits listed here.'

MCT has projected a yield of between 5.47 per cent and 5.92 per cent for the year ending March 31, 2012; and a yield of between 5.96 per cent and 6.46 per cent for the year after.

Analysts put the weighted average yield for the entire Reit sector in Singapore at around 6 per cent.

MCT also said in its prospectus that it has firmed up four cornerstone investors who have committed to invest up to $275 million in the IPO.

The cornerstone investors include AIA, which has agreed to invest up to $125 million. The other three investors - Hillsboro Capital, Japan's Itochu Corp and retailer NTUC FairPrice Co-operative - have agreed to invest up to $50 million each.

Citigroup, CIMB, DBS, Deutsche Bank and Goldman Sachs have been appointed as joint bookrunners, issue managers and underwriters for the offer.

Mapletree Investments' third Reit, Mapletree Industrial Trust, raised close to $1 billion when it was listed in October 2010.

As at end-December 2010, the group and its subsidiaries own and manage more than $14.4 billion of office, logistics, industrial, residential and retail properties with an extensive network of offices in Singapore, China, Hong Kong, India, Japan, Malaysia, South Korea and Vietnam.

(06-04-2011, 06:06 PM)Musicwhiz Wrote: Next up may be Mapletree Retail Trust?

Not very likely. Vivo is the biggest retail asset in Mapletree portfolio.

After injecting that into MCT, they only have the retail portion of Harbourfront Centre and St James Powerhouse as pure retail assets. Not enough for a REIT by itself. More likely to be absorbed into MCT eventually.

Retail isn't their forte after all.

"MCT has projected a yield of between 5.47 per cent and 5.92 per cent for the year ending March 31, 2012"

What a great time to raise money.
With this kind of yield, it seems that there isn't much meat left in the REITs.

(07-04-2011, 01:32 PM)yeokiwi Wrote: "MCT has projected a yield of between 5.47 per cent and 5.92 per cent for the year ending March 31, 2012"

What a great time to raise money.
With this kind of yield, it seems that there isn't much meat left in the REITs.

Haha, well if you compare to previous REITs yes the yield is low, but then again it still trumps inflation hands down, so that may still attract investors. After all, F&N and SIA bonds are only paying half the yield.....

very different levels of risks here as compared to F&N and SIA bonds... vivo looks good, but can't say the same for harborfront

anyway out of the 1,116,600,000 units, about 302m units (27%) are allocated for cornerstone (AIA, NTUC, Itochu, Hillsboro)

(07-04-2011, 02:10 PM)Musicwhiz Wrote:

(07-04-2011, 01:32 PM)yeokiwi Wrote: "MCT has projected a yield of between 5.47 per cent and 5.92 per cent for the year ending March 31, 2012"

What a great time to raise money.
With this kind of yield, it seems that there isn't much meat left in the REITs.

Haha, well if you compare to previous REITs yes the yield is low, but then again it still trumps inflation hands down, so that may still attract investors. After all, F&N and SIA bonds are only paying half the yield.....

Well if it's a good time for them to sell it, then it's a bad time for us to buy it! Notice that when valuations were lower, like in Feb, they refused to list.

(07-04-2011, 02:10 PM)Musicwhiz Wrote: Haha, well if you compare to previous REITs yes the yield is low, but then again it still trumps inflation hands down, so that may still attract investors. After all, F&N and SIA bonds are only paying half the yield.....

The recent REITs listed were all industrial REITs: S'bana, MIT, CLT.

MCT is a retail/office REIT which typically yields lower than industrial REITs.

Here's some of the current listed retail/office REIT yield for comparison:

Source: SGX REIT Data as of 7 Apr 11

Starhill Gbl: 6.556%
FrasersCommercial: 6.938%
CMT: 5.032%
Suntec: 6.095%

It's already pretty obvious that many here does not find the REIT an appealing proposition; but that not entirely surprised as many are anti-REIT in the first place.

Well to each his own. I'm definitely going for this one.

Is vivo freehold?