On 31 Dec 2021, Mapletree Commercial Trust (MCT-SGX:N2IU) and Mapletree North Asia Commercial Trust (MNACT-SGX:RW0U) proposed a merger into a combined entity with market cap valued at more than S$10 billion theoretically, to become the 7th largest Reit in Asia.

Let us zoom into the 5 positives of this merger.

  1. DPU and NAV Accretive

 

From the announcement, the DPU will increase by at least 7.5% from 4.39 cents to 4.72 cents per half year and the NAV per unit of MCT will increase by at least 6.5% from $1.68 to $1.79 after the merger.

  1. Geographical Diversification

MCT currently owns only properties in Singapore including the likes of Vivo City and MBC I & II.

MNACT currently owns properties in Hong Kong (Festive Walk Mall constituting 53.5% of the portfolio), China, Japan and South Korea.

After the merger, the enlarged entity will own all the properties currently owned by MCT and MNACT, achieving geographical diversification as follows: Singapore (51.4%), Hong Kong (26%), China (10.8%), Japan (10.2%) and South Korea (1.6%).

  1. Top 10 Largest Asian Reit