Summary of Mapletree Pan Asia Commercial Trust’s 1Q FY24/25 results

Mapletree Pan Asia Commercial Trust (MPACT) reported its results and dividends for the first quarter fiscal year 24/25 (1Q FY24/25) for the quarter ending 30th June 2024. 

• Mapletree Pan Asia Commercial Trust’s 1Q FY24/25 distribution per unit (DPU) fell 4.1% year-on-year to 2.09 cents, compared to 2.18 cents in 1Q FY23/24. 
• This translates to an annualized yield of 6.5%.
• The decline in the DPU was driven largely by an increase in finance costs. 
• Mapletree Pan Asia Commercial Trust’s 1Q FY24/25 DPU fell 8.7% compared to the DPU of 2.29 cents in the previous quarter. 

Source: Mapletree Pan Asia Commercial Trust

Revenue and net property income were little changed compared to the previous year.

Mapletree Pan Asia Commercial Trust’s portfolio occupancy fell to 94.0% in 1Q FY24/25 from 96.1% in 4Q FY23/24. 

The lower occupancy was driven by a decline in the occupancy rate at the following assets:

• MBC Singapore, where the occupancy rate fell to 92.8% from 96.0% in the previous quarter
• Other Singapore properties, where the occupancy rate fell to 96.0% from 98.3%
• Japan properties, where the occupancy rate fell to 94.2% from 97.9%

However, Mapletree Pan Asia Commercial Trust still managed to achieve average rental reversion of +5.2% in 1Q FY24/25, compared to +2.9% in FY23/24, supported by a +19.9% positive reversion at VivoCity. 

In addition, the appreciation of the Singapore dollar against the Japanese Yen (JPY) and Chinese Yuan (RMB) weighed on its gross revenue. 

Mapletree Pan Asia Commercial Trust’s net finance costs rose 9.8% year-on-year to S$59.4 million in 1Q FY24/25. The higher borrowing costs was driven by an increase in the weighted average cost of debt to 3.54% in 1Q FY24/25 from 3.17% in in 1Q FY23/24. 

Mapletree Pan Asia Commercial Trust gearing was stable at 40.5%. Likewise, its interest coverage ratio was maintained at 2.8x, little changed from the previous quarter. 

In May 2024, Mapletree Pan Asia Commercial Trust announced the proposed divestment of Mapletree Anson for a divestment consideration of S$775 million. The transactions is expected to lower Mapletree Pan Asia Commercial Trust’s pro-forma leverage ratio to 37.6% from 40.5%, and be DPU accretive by 1.5%.  The divestment is expected to be completed on 31 July 2024. 

In addition, a major upgrading of VivoCity’s Basement 2 is underway in two key phases, and is expected to deliver approximately 10% return on investment. 

Beansprout’s take on Mapletree Pan Asia Commercial Trust’s 1Q FY24/25 results

The decline in DPU in 1Q FY24/25 compared to the previous year and previous quarter may be disappointing to investors. 

In addition, there may be concerns about the fall in occupancy rate, although this is partly offset by the strength in rental reversions at VivoCity.

Management of Mapletree Pan Asia Commercial Trust expects the REIT to be able to maintain a steady trajectory, as the strength of the Singapore assets is expected to offset softness in certain overseas markets. 

Mapletree Pan Asia Commercial Trust Trust currently trades at a price-to-book valuation of 0.7x, and is expected to offer a forward dividend yield of 7.0%.

Dive deeper into the Mapletree Pan Asia Commercial Trust with our checklist and find out if it may be worthwhile adding the REIT to your watchlist. 

To learn more about our outlook on Singapore REITs, read our detailed report on “Singapore REITs – Distributions may remain under pressure”

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Related links:

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

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