MCT – Lim & Tan

• Mapletree Commercial Trust reported fiscal fourth quarter distribution per unit (DPU) of 1.737 cents (including the advance distribution of 0.603 cents already paid on 27 February 2013) which was ahead of market expectations.
  
• Solid growth in 4Q ’13 net property income (+23.4% y-o-y) came from strong portfolio occupancy at both its retail (97.5%) and office (97.9%) assets, and positive rent reversion.
  
• Nevertheless, its gearing ratio rose to 40.9%, up from 37.6% in the same period last year, as the property owner took up additional debt for its acquisition of Mapletree Anson ( where its purchase price of S$680 million is equivalent to approximately S$2,049 psf paid).
  
• Going forward, the uplift in gearing ratio would make it more difficult for the trust to acquire new assets via additional debt. The high occupancy rates at both its retail and office portfolios would also leave little room for earnings to surprise on the upside.