Mapletree Commercial Trust

Mapletree Commercial Trust: DPU for 2Q14 was 1.801¢ (+16.5% y/y, +2.9% q/q) while distributable income was $37.m (+29.1% y/y, +2.75% q/q) Gross revenue was $65.8m (+27.1% y/y) with increase mainly due to higher gross revenue from VivoCity and PSAB as well as positive rental reversions. Correspondingly, NPI grew to $47.9m (+31.4% y/y). Portfolio occupancy was 98.9% (+0.6ppt) while 87% of the leases expiring FY14 have already been re-let/renewed. Vivocity which contributes >62% of income had strong reversions with fixed rents rising 37%. Gearing seems relatively high at 40.8% although 74.5% of debt is fixed. At NAV of $1.07, MCT trades at 1.17x P/B, with 2Q14 annualized yield is 5.72%.While Credit Suisse highlights MCT as a good proxy to Singapore’s resilient retail sector, CIMB thinks there’s limited upside in positive rental reversions and tough M&A market, aside from valuation and negative interest rate outlook over the next 2 years. Latest broker calls as follows: CS: maintains O/PF, TP: $1.45 CIMB: downgrade to U/PF, TP: $1.28 Deutsche: maintains Hold, TP: $ $1.40