UOB KayHian started Mapletree Commercial Trust at Buy with S$2.22 target price, saying its mall, VivoCity, is set to benefit from Sentosa’s revamp.
“VivoCity is the prime beneficiary of the rejuvenation of Sentosa and Pulau Brani,” the brokerage said in a note Monday.
“VivoCity serves as the gateway to Sentosa (linked via monorail, cable car and Sentosa Boardwalk) and is within close proximity to Singapore Cruise Centre HarbourFront Terminal (home port for Costa Cruises, Royal Caribbean and Star Cruises),” the brokerage added, noting 70 percent of all tourists visit the island off Singapore’s Southern coast.
In 2011, VivoCity managed positive rental reversion of 24.9 percent after Resorts World Sentosa opened, the brokerage said.
Additionally, the mall will benefit from the upcoming residential enclave at the Greater Southern Waterfront, which is set to boost the population of affluent consumers.
The REIT could also benefit from the potential acquisition of Mapletree Business City 2 (MBC 2), an office tower located near VivoCity, from the trust’s sponsor, Mapletree Investments, UOB KayHian said. MBC 2 has Google as an anchor tenant, it added.
The brokerage estimated the acquisition would raise the trust’s pro forma 2020 distribution per unit (DPU) by 2.8 percent to 9.65 Singapore cents.
Mapletree Commercial Trust’s units were up 0.99 percent at S$2.05 at 4:29 P.M. SGT.
While you’re here, we’re hoping you can help us out.
Shenton Wire has been providing you with quick news and market analysis. But we need your support to continue to bring you the news you’ve come to expect and to expand our reach beyond Singapore.
Your monthly contribution will directly fund our journalism.
You can check your existing account here. You can also contact us about other contribution levels or for corporate subscriptions and syndication queries.