Mapletree Commercial Trust

Mapletree Commercial Trust: 3QFY14 results above estimates; Mapletree Commercial Trust (MCT) reported 3QFY14 distributable income of $38.7m (24.2% y/y), while DPU grew 11.9% to 1.865cts on the back of maintained performance from VivoCity, improvement in occupancy rates at PSA Building and the acquisition of Mapletree Anson in Feb'13. Subsequently, gross revenue grew 22.4% to $68.4m , while net property income (NPI) accelerated 24.9% to $49.4m. On a 9MFY14 basis, Vivocity (62.5% of MCT's NPI) had a solid rental uplift of 38.7%, supported by stable shopper traffic growth of 2.1% y/y and tenant sales growth of 6.6%. With its proximity to Resorts World Sentosa to attract a good mix of locals and tourists, the shopping centre should continue to underpin MCT's strong rent reversion in the coming quarters. Overall portfolio occupancy as at 31 Dec 13 was at 98.7% (committed occupancy of 99.9%), which comprises retail at 97.5% and office occupancy of 100%. Weighted average lease to expiry of 2.2 years. Aggregate leverage remained stable at 40.8% with average term to maturity of 2.7 years at an average cost of 2.18%. At $1.165, MCT 9MFY14 annualized DPU 6.2% yield and 1.1x P/B. Latest broker recommendations: CS maintains Outperform with $1.45 TP DB maintains Buy and raises TP to $1.47 (from $1.42) StanChart maintains Outperform with $1.28 TP