UPDATE: Mapletree Commercial and Mapletree North Asia to merge into pan-Asia REIT in S$4.22B deal

The Festival Walk property located in Hong Kong. Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust agreed in December 2021 to merge to form Mapletree Pan-Asia Commercial Trust. Credit: Mapletree North Asia Commercial TrustThe Festival Walk property located in Hong Kong. Mapletree North Asia Commercial Trust (MNACT) and Mapletree Commercial Trust agreed in December 2021 to merge to form Mapletree Pan-Asia Commercial Trust. Credit: Mapletree North Asia Commercial Trust

This article was originally published on Friday, 31 December 2021 at 9:42 a.m. SGT; it has since been updated to include more details.

Correction: An earlier version of this article misstated the impact of Covid-related restrictions on Mapletree North Asia Commercial Trust’s Festival Walk property in Hong Kong. The property was never closed due to Covid restrictions.

Mapletree Commercial Trust and Mapletree North Asia Commercial Trust plan to merge into Mapletree Pan-Asia Commercial Trust, creating one of Asia’s top-10 largest REITs with assets across Singapore, South Korea, China, Hong Kong and Japan.

The combined portfolio will hold 18 commercial properties, with assets under management of around S$17.1 billion, the trusts said in a filing to SGX Friday after units of both were halted from trade for Tuesday, Wednesday and Thursday.

Under the deal, which will be a trust scheme of arrangement, unitholders of MNACT will receive S$1.1949 for each unit, to be paid by either 0.5963 new MCT unit issued at S$2.0039, or a combination of 0.5009 MCT unit and S$0.1912 in cash, the filing said.

Premium to MNACT unit price

The pricing is a 7.6 percent premium to MNACT’s unit price of S$1.11 on 27 December, and a 14.4 percent premium to its one-month volume weighted average price (VWAP) of S$1.0449, the filing said. The pricing is in line with MNACT’s net asset value (NAV) per unit of S$1.1949, the filing said.

In total, the deal’s consideration is S$4.22 billion, with a maximum of S$417.3 million in cash, the trusts said.

The combined trusts would have a market capitalization of around S$10.5 billion, on a pro forma basis, assuming all MNACT unitholders, excluding Mapletree Investments, receive the cash-and-scrip consideration, the filing said.


Sharon Lim, the CEO of MCT’s manager, called the deal a “win-win,” citing an immediate accretion to distribution per unit (DPU) of as much as 8.9 percent on a pro forma basis for MCT’s unitholders.

“This is a once-in-a-lifetime opportunity to bring together two leading commercial REITs with highly complementary qualities,” she said in the statement.

“MCT has a longstanding track record of stability and strength, while MNACT offers a ready launchpad into key gateway markets of Asia. Therefore, by merging the two REITs, we can better unlock the upside potential of a multiple-geography platform, put the merged entity onto a new growth trajectory, and crystallise MPACT’s position as a distinctive proxy to the long-term rise of Asia,” Lim added.

Lim also pointed to the combined entity’s geographic and tenant diversification and the reduced concentration on single assets.

On a pro forma basis, if the merger had been completed on 1 April 2021, the DPU for the first half of fiscal 2021/222 would have been 4.72 Singapore cents, compared with 4.39 Singapore cents, assuming all MNACT unitholders accepted unit-only consideration, the filing estimated.

Cindy Chow, CEO of MNACT’s manager, said unitholders of her trust would see “immediate and attractive financial returns,” citing the deal’s premium to MNACT’s trading prices.

Unitholders “also benefit from the larger market capitalisation and increased representation in key indices through the enlarged platform that would potentially attract a wider investor base and further improve trading liquidity,” Chow said in the statement.

While the two trusts focus on the same market segments — commercial real estate — their geographic coverage areas don’t overlap.

MNACT’s portfolio includes property mainly used for commercial purposes, including retail and office space, with assets located in Japan, South Korea, China and Hong Kong. The trust’s mall in Hong Kong, Festival Walk, has struggled, hit both by damages from protests in the protectorate, which damaged the mall, and from Covid-related declines in footfall and retail sales.

Mapletree Commercial Trust’s portfolio has five properties in Singapore, including VivoCity, which is among Singapore’s largest mall, as well as Mapletree Business City, mTower, Mapletree Anson, and Bank of America Merrill Lynch HarbourFront.

Mapletree North Asia Commercial Trust and Mapletree Commercial Trust are both sponsored by Mapletree Investments.

Acquisition fees waived

Under the deal, MCT’s manager, with the support of Mapletree Investments, has agreed to waive its acquisition fees on the deal, the filing said. Mapletree Investments has also agreed to accept the consideration for its MNACT units entirely in units, the filing said.

Once the deal is completed, Mapletree Investments will hold around 36.1 percent of the merged entity, the filing said.

The deal is subject to approval of both MCT and MNACT unitholders, and to the approval of MCT unitholders to change the fee structure for the manager, the filing said. Mapletree Investments and concert parties will abstain from voting, the filing said.

As of end-March, Mapletree Investments owned and managed S$66.3 billion of properties in the data center, industrial, lodging, logistics, mixed-use, multifamily, office, residential and retail sectors. Mapletree Investments is wholly owned by Singapore state-owned investment company Temasek Holdings.

Temasek has an interest in 38.96 percent of MNACT’s units, as of 21 June, and 33.89 percent of Mapletree Commercial Trust’s units as of 28 May, according to SGX data.

Read more details of MCT and MNACT’s assets.