Mapletree Commercial Trust

Mapletree Commercial Trust: strong potential for acquisition that might catalyse the stock
-CLSA sees high probability for an impending acquisition of Mapletree Business City Phase 1 (MBC)
-Current valuation is strong at 1.1x P/B, conducive to raise some equity funding for acquisition
-Sponsor, Mapletree Investments (MI) has strong interest to divest:
1)need to free up capital for investment based on 5-year biz plan
2)net gearing approaching 0.5x, a level where MI typically divest assets
-House estimate MBC to be valued at $1.3b-1.5b, and MCT to raise $0.6b-0.9b, assuming 40-50% debt
-DPU accretion expected to be around 1-8%
-CLSA maintains outperform with TP of $1.46