Mapletree merger not win-win for MCT unitholders

THE proposed merger between Mapletree Commercial Trust (MCT) and Mapletree North Asia Commercial Trust (MNACT) is being presented as a win-win deal. The reality though is that MCT holders are being asked to approve the acquisition of an underperforming real estate investment trust (Reit) at a hefty premium.

While MCT has demonstrated steady growth over the years, MNACT's performance has been choppy - as seen by data on MNACT's own website and in the appendix of the presentation shared by both Reits. For instance, MCT's distribution per unit has grown by an average of 4.8 per cent per annum since its initial public offering. MNACT's, on the other hand, has increased by just 1.9 per cent.

MNACT has a much higher gearing, and its listed units have greatly underperformed MCT's.

I used to regard Mapletree Investments as one of the better Reit sponsors in terms of how it treats minority shareholders. I no longer hold this view.

Kevin Lim Fung Ming