Mapletree Greater China Commercial Trust

Mapletree Greater China Commercial Trust (MGCCT) : OCBC initiates at BUY with TP $1.00, which coupled with an attractive FY15e distribution yield of 7% , translates into potential total return of 18%. MGCCT is also trading at an undemanding FY15e P/B of 0.9x , cheaper than its S-REIT peers. MGCCT owns two high quality assets strrategically located in prime commercial districts: i) Festival Walk - a landmark territorial retail mall (with office component) ranked as one of the top 10 malls by GFA in HK, and ii) Gateway Plaza - a premier Grade A office building consisting of two 25-storey towers connected by a three storey atrium in Beijing China. Post a strong first yr financial performance since IPO, OCBC sees continued organic growth ahead from MGCCT’s resilient portfolio, with built-in rental escalation for some leases and opportunities for further positive rental reversions. This would be underpinned by stable domestic demand in Hong Kong’s retail market, and robust demand and supply dynamics in Beijing’s office sector. Overall, OCBC expects MGCCT’s revenue, distributable income and DPU to increase at a steady CAGR of 3.1%, 2.9% and 1.6% from FY14-FY17F, respectively.