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I thought I dropped by for Mapletree Commercial AGM this year.

It is actually one of the larger positions in my portfolio and has a paper gain of about 45% since I bought it.

Well, like the prior AGM I attended at Mapletree Business City Town Hall, there's a huge amount of investors in their 40s onwards. And this time, it was so full that I had the privilege of sitting in a seminar room to watch it remotely. I guess it is a blessing in disguise as I had a table and more space.

So here we go:
  • Regarding their properties
    • Office and Business Park renewals are focused on the emphasis on preserving cashflow, as potential headwinds are coming
    • The business parks are not as easy to lease due to their underlying title and specified use although MBC Block 10 is an office while Block 20 and 30 are business parks, they are build the same, but for Block 10, there's no restrictions of what tenants they could get while Block 20 and 30 requires them to be more towards technology sectors, etc
    • Management stands to be very optimistic of their properties outlook
    • Mapletree Anson, with URA new rules, they can add probably about another 30,000 sq ft to lease. Hopefully it helps with its underperformance.
  • Regarding Vivocity
    • Shopper traffic seems to be plateauing, however, management says it is due a few months loss of Vivomart, but boosted by events such as the recent Disney Tsum Tsum Disney exhibition (I wonder if Kingsmen Creative is involved) 
    • Now that NTUC is the new anchor tenant, let's see if the traffic improves
    • Also, the management says that there's more partnering events to come to attract families, so let's see how effective it is.
    • Because they introduced the library into the mall, URA gave them bonus GFA (under the Community Sports Facilities Scheme) of 24,000 sq ft which was B1 in the carpark.
    • That being said, Vivocity's GFA is more or less maximised (as it is capped by URA), so there's no way to do a major AEI to increase it. But the management says that they would try to optimise their NFA instead.
    • One example would be after switching from Vivomart to NTUC, they managed to slice and dice 24,000 sq ft and lease them to speciality stores.
    • from the URA masterplan, there are more residential property coming up in the years to come
, so they would expect more traffic as well.
  • The management do wish to take advantage of the current high share price but they would not issue any form of equity raising unless there's acquisitions to be made as it would be dilutive to shareholders (even if it is to pare down debt)

    • In addition, the management prefers to keep gearing lower than the cap of 45% with some headroom though no specific level was stated.

  • Management is interested in acquiring MBC Phase II, however, the sponsor has yet to place the deal on the table and the management would also hope that the capital markets would be favourable when it happens (as they call it, it requires when all the stars are aligned).
  • I was wondering why do they have 12 directors and was going to ask like the Mapletree Industrial AGM, but Mano beat me to it. And unfortunately, unlike Mapletree Industrial, none of them are rotating out and the basis as said by management is to ensure more independence and better oversight. I personally feel 12 is a little too much no matter where the fees are paid from.
  • A shareholder asked about URA plans for the Lakeside CBD to be but the management didn't share or answer that though.
  • A shareholder asked them to resume the DRPs program and give a good discount like OCBC. The management said that the DRPs program was suspended because of the takeup rate being not justified of the admin cost. The management joked that if they gave a deep discount like OCBC, they won't be here the next AGM.

  • Well, that's all for the post.

    Unfortunately, this AGM is the less insightful ones, with the management not being very frank (in my opinion, maybe I am wrong) regarding certain questions, by giving short answers or avoiding the questions. They are performing well though.

    If you like my tibits from this AGM? Click here to view a complete list of AGMs I have attended.

    2 comments:

    1. all these AGM u attended, any doorgift?

      ReplyDelete
      Replies
      1. Most of them don't, not sure why would that be a concern?

        Delete

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