Mapletree Greater China Commercial Trust

Mapletree Greater China Commercial Trust (“MGCCT”): AmFraser initiates BUY on MGCCT, with TP $0.98, for its best-in-class assets and pristine sponsor rating. MGCCT owns two assets: i) Festival Walk in Hong Kong is an up-market shopping mall with high-quality luxury goods tenants. The commercial property is more resilient to potential Chinese tourist policy changes than other malls, with only 10% (versus 40%) visitors from Mainland China. ii) Gateway Plaza in Beijing is one of few Grade A office buildings and has 50% of GFA let out to Fortune 500 companies. Records show actual rental reversions for both properties far outperforms expectations. In FY13, MGCCT recorded rental reversions far exceeding prospectus forecasts of 20-22% for Festival Walk and 79% for Gateway Plaza. AmFraser expects continued strong rental reversions as 18% and 10% of Festival Walk and Gateway Plaza leases are due to expire in FY14, and the expiring leases are c.15-30% lower than mkt rents. MGCCT is backed by a strong sponsor in Mapletree Investments, which currently manages 4 S-REITS and 5 private real estate funds. MGCCT is well positioned to capitalise on its sponsor’s experience . MGCCT has the financial flexibility to acquire new assets for growth ,with a debt headroom of $1.07b and current gearing at a comfortable 38%.