Mapletree Commercial Trust

Mapletree Commercial Trust (MCT): good set of 2QFYMar12 results.
DPU at 1.33cts, +21.4% yoy, in line with consensus, and above mgt forecast of 1.22cts, on the back of solid performance from VivoCity and lower financing cost (all-in interest cost of 1.95% vs Deutsche forecast of 2.43%).
Revenue and NPI rose 1.4% and 2.8% YoY largely due to VivoCity partially offset by lower income from PSA Building. Vivo’s operating performance remains robust, with 1H shopper traffic and tenant sales up 13.9% and 9.4% respectively and strong reversion growth of 20%. Vivo saw high retention rate of 98.5%, with rental uplifts of ~20%, and full occupancy at 99.9%.
Construction for ARC remains on track (>90% completed) and is on schedule for completion by Dec 11. Pre-commitments have increased from 1/3 to >50% at rents slightly above mgt’s $8.00psf forecast and mgt
plans to progressively open some F&B and retail tenants upon completion to cater to the office tenants. In Vivo, mgmt is still calibrating AEI plans with space surrendered by Page One (27k sf) to be decanted and re-tenanted. This could drive DPU growth of ~10% in FY12/13E.
Reit trades at 0.94x P/B (vs CMT and FCT at 1.2x P/B) and FY12e yield of 6.1-6.6%.
StanChart reiterates Outperform with TP $0.96.
Deutsche maintains Buy, lifts TP to $1 from $0.98.