Mapletree Pan Asia Commercial Trust DPU falls by 9.1%: Our Quick Take

3QFY25 DPU falls by 9.1%

Mapletree Pan Asia Commercial Trust (MPACT) reported 3QFY25 Distributions Per Unit (DPU) of 2 cents, down 9.1% YoY. 

3QFY25 revenue declined 7.4% YoY, while Net Property Income (NPI) declined 8.5% YoY.

Overall, 9MFY25 DPU of 6.07 cents was in line with consensus FY25E DPU of 8.1 cents. 

Singapore assets continue to perform well, led by VivoCity 

MPACT’s Singapore properties continue to see positive rental reversion, and VivoCity continues to play a pivotal role in the resilience of MPACT’s Singapore portfolio, with robust +16.9% rental reversion in 9MFY25. 

VivoCity’s Basement 2 Asset Enhancement Initiative (AEI) continues to progress well, with the phase 2 retail area expansion commencing work in December 2024, with the full AEI expected to complete by end-2025 with a return on investment of over 10%.

Overseas contributions impacted by strong SGD and underlying weakness

NPI contributions across Japan, China and Festival Walk in Hong Kong all declined in 3QFY25, although 53% of NPI remains well-supported by its core assets in Singapore. 

Rental reversions remain negative across its overseas properties, with Festival Walk seeing a negative 7.2% rental reversion YTD. 

Festival Walk however achieved higher committed occupancy and recorded better-than-market QoQ improvements in shopper traffic and tenant sales. 

This was despite market-wide impact from currency-driven outbound travel and cross-border consumption trend by Hong Kong residents.

Asset management effort continues, exploring options in Makuhari submarket of Japan

With continued overseas challenges, management remains focused on active asset management across its portfolio, and had divested Mapletree Anson on 31 July 2024, with sale proceeds used to reduce floating-rate debt. 

Management remains focused on assessing its strategic options for the three properties in the Makuhari submarket of Chiba, Japan, particularly Fujitsu Makuhari Building following the expressed intention of its single tenant, Fujitsu Limited, not to renew its lease upon expiry on 31 March 2026. 

The three properties are valued at S$547 mn as at 30 September 2024 (3.5% of property portfolio valuations). The remaining Japan properties are expected to be stable.  

Aggregate leverage stable at 38.2%

With the divestment of Mapletree Anson, notwithstanding the lower valuation of the Makuhari properties, MPACT’s aggregate leverage ratio has declined from 40.5% as at 30 June 2024 to 38.2% as at 31 December 2024. 

The weighted average all-in cost of debt declined marginally QoQ to 3.52% per annum, with approximately 81.5% of total gross debt are now in fixed-rate debts or fixed through interest rate swaps, vs. 78.9% as at 30 June 2024.

What would Beansprout do?

Mapletree Pan Asia Commercial Trust's distributions have declined due to weakness in the performance of its overseas assets, as well as strength in the Singapore dollar.

However, its Singapore assets continue to perform well, supported by VivoCity. 

Based on consensus DPU estimates of 8.1 cents for FY25E and 8.5 cents for FY26E, MPACT is trading at an implied distribution yield of 6.8% and 7.1% respectively.

This would be more than one standard deviation above historical average. 

MPACT is currently trading at a price-to-book valuation of 0.7x, below its historical average. 

We will keep a look out for stabilisation of the performance of its assets in Hong Kong, China, as well as greater visibility on its plans for assets in the Makuhari submarket of Japan. 

Related links:

• Mapletree Pan Asia Commercial Trust share price and share price target
• Mapletree Pan Asia Commercial Trust dividend history and forecast

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