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Would PSA Move out of Mapletree Commercial Trust’s PSA Building in 2 Years Time?

As early as July 2016, I wrote about the uncertainties surrounding Frasers Commercial Trust (FCOT), a Singapore/Australia commercial office REIT.

Of a few uncertainties, one of the biggest was that their anchor tenant HP Singapore and Enterprises moving out of their premises in Alexandra Technopark and into their own premises, built by Mapletree Industrial REIT.

HP eventually moved out of ATP, agreeing to sign on to Alexandra Technopark on very short leases.

My friend Caveman did observe something of a similar nature while reviewing Mapletree Commercial Trust’s recent results.

Seeing the results triggered him to remember an order announced by local construction firm Lum Chang.

Lum Chang PSA building

The announcement was that Lum Chang worn a contract to build PSA Singapore’s corporate headquarters and some alteration works on Pasir Panjang Terminal Building 3.  The construction would estimate to be in 2 years so we should see it being ready in 2020.

While this is good news for Lum Chang, we should note where is PSA Singapore’s current office.

Mapletree Commercial Trust currently owns the PSA building. They house not only themselves but also some of their shipping partners, Mapletree investments and Bank of Singapore.

The building is currently well occupied and has a diverse group of tenants. PSA and BW Maritime Pte Ltd forms about 4% of MCT’s total gross revenue.

I do wonder if PSA have their own corporate building will they continue to rent at their current office, or whether they are expanding. I think it is likely that they will move. If PSA move, will their shipping partners move together with them as well.

I think the impact to their gross revenue is probably 2.5% which is a lot more manageable compared to FCOT’s situation which is nearly 16% of their gross income.

That said, I do passed by that place once in a while, since I work around that region. It is next to Labrador MRT station and very close to Harbourfront by bus.

Like the FCOT case, things are not always certain but its good to take note for shareholders.

Per my Dividend Stock Tracker, the current dividend yield of the stocks mentioned:

  1. MCT: 5.2%
  2. FCOT: 6.5%
  3. Mint: 6.1%
  4. Lum Chang: 5.0%

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My Investment Machine

Wednesday 30th of January 2019

Good point. Very good observation and linking of the points. I did not know that PSA is building another office. As they are considered privately run, I think it is likely they will move too. Does not make sense for them to still rent another office when they have their own.

Always get to learn a lot from your posts. =)

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