DBS: Still bullish on Mapletree Commercial Trust despite unit price jump

Singapore’s VivoCity mall, owned by Mapletree Commercial TrustSingapore’s VivoCity mall, owned by Mapletree Commercial Trust Note: Photo taken pre-Covid

DBS said it was remaining bullish on Mapletree Commercial Trust despite a “meteoric rise” in its unit price, sticking with its contrarian Buy call.

“We are still bullish on MCT with its best-in-class portfolio with dominant attributes within the Greater Southern Waterfront region. The stock also enjoys a scarcity premium of being one of only two 100 percent- Singapore-focused large-cap REITs which is highly valued by investors,” DBS said in a note Friday.

“With the inclusion in MSCI post the acquisition of MBCII, we believe MCT has hit the ‘home run’ to sit at the ‘high table’. Given improved earnings visibility and being one of the ‘go-to’ stocks in Singapore, we believe investors will remain vested,” DBS added.

The trust also has room to take on development projects, especially at Harbourfront Centre, the note said.

DBS raised its target price on Mapletree Commercial Trust to S$2.60 from S$2.39 after raising fiscal 2020-2021 distribution per unit estimates by 2 percent to factor in the acquisition of Mapletree Business City Phase 2.

Mapletree Commercial Trust’s portfolio includes VivoCity, one of Singapore’s largest shopping malls, and four office and business park properties.

The trust’s units dropped 5.02 percent to S$2.27 by 3:45 P.M. SGT, up from S$1.67 at the start of January.

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