{"id":204408,"date":"2025-04-25T08:47:07","date_gmt":"2025-04-25T08:47:07","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/why-i-am-against-the-mapletree-commercial-trust-merger\/"},"modified":"2025-04-25T08:47:07","modified_gmt":"2025-04-25T08:47:07","slug":"why-i-am-against-the-mapletree-commercial-trust-merger","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=204408","title":{"rendered":"Why I am against the Mapletree Commercial Trust Merger"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"post-body-5045841504924371008\" itemprop=\"description articleBody\">\n<p style=\"text-align: justify;\"><span style=\"font-family: arial; font-size: medium;\"><b><u>Why I am<br \/>\nagainst the Mapletree Commercial Trust merger<\/u><\/b><\/span><\/p>\n<p style=\"text-align: justify;\"><b style=\"font-family: arial; font-size: large; text-indent: -18pt;\">Make your vote count<\/b><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><span style=\"font-family: arial; font-size: medium;\">First off, it appears that many unitholders somehow hold the defeatist mentality<br \/>\nthat voting is futile (sounds familiar?), because this is likely a done deal. But<br \/>\nthis cannot be further from reality. The Sponsor (which holds 32.61% of units)<br \/>\nwill have to abstain from voting on the merger, thus the outcome of this will<br \/>\nbe decided by both institutional and retail investor alike \u2013 yes, people like<br \/>\nyou and me. For Resolutions 1, 2 and 3, only a simple majority (&gt;50%) is<br \/>\nrequired to pass the resolutions, so it is really up in the air and could go<br \/>\neither way. Therefore, remember to fill up your voting forms (that you should<br \/>\nhave received by mail) and vote for what you want! I love direct democracy!<\/span><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"text-indent: -18pt;\"><b><span style=\"font-family: arial; font-size: medium;\">Increased leverage, increased risk<\/span><\/b><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><span style=\"font-family: arial; font-size: medium;\">MCT\u2019s current leverage stands at ~33%, which is very safe and reasonable<br \/>\nin my view. If the merger goes through, leverage rises up to 39.2%. This<br \/>\npotentially increases risk especially going into a rising interest rate<br \/>\nenvironment. MCT unitholders would have to weigh this sizeable increase in<br \/>\nleverage against the pro forma benefits of the increased DPU and NAV. Personally,<br \/>\nI don\u2019t think this is worth it. I rather MCT stays with lower leverage at the<br \/>\nmoment.<\/span><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span style=\"text-indent: -18pt;\"><b><span style=\"font-family: arial; font-size: medium;\">Growth abroad \u2013 is this really<br \/>\nnecessary?<\/span><\/b><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><span style=\"font-family: arial; font-size: medium;\">One of the reasons cited for the merger is that there are more<br \/>\nopportunities for growth abroad. While this statement itself is valid, MCT<br \/>\nshareholders would have to question whether there are indeed greener pastures<br \/>\noverseas. Sticking to a Singapore mandate has its benefits, with best in class<br \/>\nassets such as MBC I &amp; II and VivoCity. Singapore has largely been a safe haven<br \/>\nfor capital amid the pandemic and Singapore real estate is a preferred choice<br \/>\nfor many of the wealthy. In my view, SG real estate will continue to do well.<\/span><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><span style=\"font-family: arial; font-size: medium;\">Most importantly, MCT has been growing its DPU and NAV steadily over the<br \/>\nyears, even without overseas exposure. One would have to be aware of potential<br \/>\nissues with overseas properties \u2013 MNACT\u2019s Festival Walk was damaged by<br \/>\nprotestors a few years back, and China\u2019s zero covid policy is also a headwind<br \/>\nfor MNACT\u2019s China based assets.<\/span><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span style=\"text-indent: -18pt;\"><b><span style=\"font-family: arial; font-size: medium;\">Huge potential of the Greater<br \/>\nSouthern Waterfront<\/span><\/b><\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span style=\"font-family: arial; font-size: medium;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\">MCT is well poised to benefit from the development of the GSW over the<br \/>\nnext decade \u2013 tens of thousands of private condos and HDBs will be developed,<br \/>\nand MCT currently has the best in class assets in the area. MBC, mTower and Vivo<br \/>\nare all well positioned right beside MRT stations with great connectivity. I<br \/>\ncannot imagine Vivo becoming any more crowded than it already is, but that<br \/>\nlooks like the reality in the future.<\/span>\u00a0<\/span><\/p>\n<p class=\"MsoListParagraphCxSpMiddle\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><span style=\"font-family: arial; font-size: medium;\">Additionally, the Sponsor still owns more properties along the GSW that<br \/>\nMCT can acquire in the future. If MCT does not merge with MNACT, MCT can focus<br \/>\non growth in Singapore with its ample debt headroom, if necessary.<\/span><\/span><\/p>\n<p class=\"MsoListParagraphCxSpLast\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><span style=\"font-family: arial; font-size: medium;\">In conclusion, I am against the merger. Don\u2019t get me wrong, MNACT is<br \/>\nstill a good stock as Quarz Capital had rightly pointed out. But I rather MCT<br \/>\nand MNACT be kept separate, as they cater to different profiles of investors \u2013<br \/>\nMCT for those seeking stability in Singapore, while MNACT caters to those<br \/>\nseeking growth in foreign markets and are willing to potentially take on<br \/>\ngreater risk. I would rather investors have the choice to invest in either, and not merge them into one.<\/span><\/span><\/p>\n<p class=\"MsoListParagraphCxSpLast\" style=\"text-align: justify;\"><span lang=\"EN-US\" style=\"mso-ansi-language: EN-US;\"><b><span style=\"font-family: arial; font-size: medium;\">Remember to make your vote count, and let\u2019s make history!<\/span><\/b><\/span><\/p>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Why I am against the Mapletree Commercial Trust merger Make your vote count First off, it appears that many unitholders somehow hold the defeatist mentality that voting is futile (sounds familiar?), because this is likely a done deal. But this cannot be further from reality. The Sponsor (which holds 32.61% of units) will have to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[14115,44597,18833,1313],"dealstore":[],"offerexpiration":[],"class_list":["post-204408","post","type-post","status-publish","format-standard","hentry","category-investing","tag-commercial","tag-mapletree","tag-merger","tag-trust"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why I am against the Mapletree Commercial Trust Merger - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=204408\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why I am against the Mapletree Commercial Trust Merger - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Why I am against the Mapletree Commercial Trust merger Make your vote count First off, it appears that many unitholders somehow hold the defeatist mentality that voting is futile (sounds familiar?), because this is likely a done deal. 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