Tuesday, 19 July 2022

Mapletree Commercial Trust Tragic Preferential Offering Still Higher Than Market Price.

The tragic Preferential Offering exercise for Mapletree Commercial Trust ("MCT") has commenced on 12 July 2022 and will close at 5.30pm on Wednesday, 20 July 2022. The offer basis will be 306 Preferential Offering Units for every 1,000 existing MCT Units held by eligible unit-holders at the issue price of S$2.0039 per unit. It is a tragedy as the current market traded price as at 18 July 2022 is S$ 1.790 per unit hence no one in the right frame of mind will be subscribing for this particular rights issue which is at a premium of +12% to the market traded price on SGX. Mapletree Investments Pte Ltd will be taking up all the unsubscribed rights and losing as much as S$200Mil immediately in unrealised losses.  

Time table for Preferential Offering

Offered price way higher than last market trading price

While I have previously sold off my entire Mapletree North Asia Commercial Trust ("MNACT"), I am still holding on to MCT and as a matter of fact, I have been adding more units into MCT with the recent dip in pricing. With the previous January sudden outbreak of Omicron variant of COVID in Hong Kong being brought under better control, much of the restrictions previously imposed has been relaxed and this bodes well for its key asset Festival Walk acquired from MNACT. The negative rental reversion for Festival Walk should turn-around eventually.

Last but not least, I am sure that the incumbent property manager will continue to maximise the potential of all the newly acquired assets given its good track record of growing its portfolio under the management of the Mapletree branding. In addition, Mapletree Investments Pte Ltd seems to be of the view that the newly merged entity is worth at least S$2.0039 per unit and willing to undertake all the rights issue at this exorbitant price. 

(Note: Since I am being heckled as well as being trolled online these days whenever my past few posting relating to REITs is put up on a Facebook group, I need to state here that having a liberal mind on discussion of 2 sides of a coin should never be perceived to be "filmsy" or "airy". It is also perfectly ok to disagree with my views but one should not be overly confrontational, in particularly, through harassing or trying to disconcert others with challenges or gibes.)

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