Mapletree Greater China Commercial Trust

Mapletree Greater China Commercial Trust (MGCCT) 2QFY15 results were ahead of estimates, with DPU jumping 10.4% to 1.61¢, taking 1HFY15 DPU to 3.16¢ (+11.1%). Gross revenue for the quarter was up 6.9% to $67.5m, led by strong rental reversions at Festival Walk and Gateway Plaza. NPI advanced 9% to $55.1m, as property operating expenses fell 1.6%, largely due to lower leasing commissions and marketing and promotions expenses. Portfolio occupancy remained high at 99.2%, with 87% of the expiring leases in FY15 renewed with robust rental reversions (between 21% and 32%). MGCCT’s portfolio comprises two key assets, Festival Walk and Gateway Plaza. Going forward, management believes MGCCT’s portfolio is well positioned to benefit from the continued performance in both the HK retail sector and the Beijing office sector. MGCCT had net gearing of 37.7% with a weighted debt maturity of 2.7 years, and average cost of debt of 2.1%. MGCCT trades at 0.91x P/B and offers 6.7% annualized yield, against its closest Singapore peer Suntec REIT (5.2% yield) and Hong Kong peers Champion REIT (6.1%), Fortune REIT (5.9%) and Link REIT (3.5%).