Mapletree Greater China Commercial Trust

Mapletree Greater China Commercial Trust (MGCCT): Reit counters have generally been underperforming on a host of reasons that we have been highlighting, namely: 1) Possible QE tapering during the upcoming FOMC meeting over 17-18 Sep, 2) Budget debate in Washington, 3) Germany’s election, and 4) Fears of a potential US strike on Syria. On top of that, Maybank-KE sees an extended overhang on the sector, given the impending hike in interest rates and possible recalibration of over-inflated property prices, which may drag down individual REITs’ net asset values. As a comparison, MGCCT has the highest debt/asset gearing ratio of 0.42x in the retail reit space, which also means the reit will see the most impact from a rise in interest rates on its distributable income.