Broker Name: CGS International
Date of Report: April 28, 2025
Mapletree Pan Asia Commercial Trust: Navigating Overseas Headwinds with Singapore’s Strength
MPACT’s FY25 Performance: An Overview
Mapletree Pan Asia Commercial Trust (MPACT) faces challenges from its overseas portfolio, even as its Singapore properties, particularly VivoCity, perform strongly. The 4Q/FY25 distribution per unit (DPU) reached 1.95 Singapore cents (Scts), and the full fiscal year DPU was 8.02 Scts [[1]]. These figures align closely with CGS International’s forecasts, achieving 24% and 98.8% of the FY25F estimates, respectively [[1]].
Financial Highlights and Portfolio Valuation
MPACT reported declines in both revenue and net property income (NPI) for 4QFY3/25, with revenue decreasing by 6.8% to S\$222.9 million and NPI falling by 7.4% to S\$169.5 million [[1]]. These declines are attributed to the divestment of Mapletree Anson and reduced contributions from overseas assets [[1]]. Consequently, the 4Q DPU experienced a 14.8% year-over-year decrease, settling at 1.95 Scts [[1]].
The annual portfolio valuation for FY3/25F revealed positive trends in Singapore, with properties enjoying a 7.9% valuation uplift, which helped to offset declines in the values of assets in China and Japan [[1]]. MPACT’s aggregate leverage ratio was 37.7% at the end of the fourth quarter, and the average cost of debt saw a marginal improvement quarter-over-quarter, reaching 3.51% [[1]]. A significant 79.9% of its debt was on fixed rates, and 90% of its distributable income was hedged into Singapore dollars as of the end of 4QFY25 [[1]].
Singapore Portfolio: Strong Reversions and AEI Progress
The Singapore portfolio demonstrated robust performance, with retail and office reversions ranging from +2.2% to +16.8% [[1]]. VivoCity and other Singapore properties maintained high committed occupancy rates of 99.3% and 99.5%, respectively, while Mapletree Business City (MBC) reported a 91.2% take-up rate [[2]].
FY25 Singapore portfolio reversions ranged from +2.2% for MBC to an impressive +16.8% for VivoCity [[2]]. Despite a slight 0.1% year-over-year decrease in shopper traffic at VivoCity during 4QFY25, tenant sales fell by a more significant 2.1% year-over-year [[2]].
Asset enhancement initiatives (AEI) at B2 are underway, with Phase 1 nearing completion and most food kiosks now operational [[2]]. Phase 2, which includes increasing lettable area by 14,000 square feet through converting carparks and reconfiguring spaces, is on track for completion by the end of 2025F [[2]]. Management projects a return on investment (ROI) exceeding 10% for this initiative [[2]].
Overseas Portfolio: Festival Walk Stabilizing Amid Challenges in China and Japan
Within MPACT’s overseas portfolio, Festival Walk (FW) in Hong Kong showed signs of stabilization, with a committed occupancy rate of 96.8% as of 4QFY25 [[2]]. Rent reversion trajectory moderated to -6.9%, compared to -7.2% in the third quarter [[2]]. However, tenant sales at FW saw an 8.4% decline for FY25, although shopper traffic increased by 5.6% over the same period, driven by collaborative marketing campaigns and celebrity appearances [[2]].
China properties experienced a slight improvement in take-up, reaching 86.1%, even as negative reversions persisted into FY25 at -9.3% [[3]]. Management plans to focus on driving high committed occupancies and positive rental reversions in Singapore, while implementing targeted measures for tenant retention and portfolio optimization in its overseas properties, including a review of portfolio composition in Japan [[3]].
Investment Recommendation and Target Price
CGS International maintains an “Add” rating for Mapletree Pan Asia Commercial Trust, citing inexpensive valuations [[3]]. The FY26-27F DPUs have been adjusted by -0.379% to +0.021% post-results, to fine-tune projected funding costs [[3]]. The DDM-based target price (TP) is lowered to S\$1.48 (cost of equity: 7.71%) due to adjustments in forward earnings assumptions, reflecting a slower pace of recovery due to macroeconomic slowdown [[3]].
Given the attractive 6.8% FY26F dividend yield, CGS International believes that much of the slower overseas performance is already factored into the share price [[3]]. Potential re-rating catalysts include tenant remixing at Festival Walk, capital recycling, and reinvestments [[3]]. Downside risks include unfavorable forex movements eroding earnings growth and longer-than-expected backfilling of vacancies [[3]].
Key Financial Metrics and Forecasts
Here is a summary of key financial forecasts:
* **FY26F DPU:** Decreased by 0.379% [[1]]
* **FY27F DPU:** Increased by 0.021% [[1]]
Shareholder Structure and Market Data
* Current Price: S\$1.22 [[4]]
* Target Price: S\$1.48 [[4]]
* Previous Target: S\$1.53 [[4]]
* Up/downside: 21.3% [[4]]
* CGSI / Consensus: 2.0% [[4]]
* Market Cap: US\$4,888m or S\$6,426m [[4]]
* Average Daily Turnover: US\$9.91m or S\$13.26m [[4]]
* Current Shares O/S: 5,268m [[4]]
* Free Float: 44.5% [[4]]
* Major Shareholders: Temasek Holdings (55.5%), Schroders (3.2%), Blackrock (1.4%) [[4]]
Price Performance
* 1 Month: -3.2% (Absolute), 0.6% (Relative) [[4]]
* 3 Months: 1.7% (Absolute), 0.4% (Relative) [[4]]
* 12 Months: -3.2% (Absolute), -29.4% (Relative) [[4]]
Financial Summary
Financial Summary |
Mar-24A |
Mar-25A |
Mar-26F |
Mar-27F |
Mar-28F |
Gross Property Revenue (S\$m) |
958.1 |
908.8 |
920.8 |
935.7 |
949.3 |
Net Property Income (S\$m) |
727.9 |
683.5 |
849.5 |
863.5 |
876.4 |
Net Profit (S\$m) |
576.7 |
578.4 |
563.9 |
580.7 |
593.1 |
Distributable Profit (S\$m) |
468.6 |
423.0 |
438.3 |
450.2 |
459.6 |
Core EPS (S\$) |
0.08 |
0.08 |
0.11 |
0.11 |
0.11 |
Core EPS Growth |
(15.7%) |
(2.9%) |
33.6% |
2.7% |
1.8% |
FD Core P/E (x) |
14.81 |
15.24 |
11.42 |
11.12 |
10.92 |
DPS (S\$) |
0.089 |
0.080 |
0.083 |
0.085 |
0.086 |
Dividend Yield |
7.30% |
6.57% |
6.80% |
6.96% |
7.08% |
Asset Leverage |
39.9% |
37.2% |
37.2% |
37.1% |
37.0% |
BVPS (S\$) |
1.75 |
1.78 |
1.77 |
1.77 |
1.77 |
P/BV (x) |
0.70 |
0.69 |
0.69 |
0.69 |
0.69 |
Recurring ROE |
4.69% |
4.53% |
6.03% |
6.20% |
6.32% |
Detailed Results Comparison
A detailed comparison of results provides further insights into MPACT’s performance [[2]]:
* **Revenue:** 4QFY25 revenue stood at S\$222.9m, compared to S\$239.2m in 4QFY24. FY25 revenue totaled S\$908.8m, a decrease from S\$958.1m in FY24.
* **Direct Expenses:** S\$53.3m in 4QFY25 and S\$225.3m for FY25.
* **Net Property Income (NPI):** Decreased to S\$169.5m in 4QFY25 and S\$683.5m for FY25.
* **NPI Margin:** 76.1% in 4QFY25 and 75.2% for FY25.
* **Distributable Income:** S\$103.6m in 4QFY25 and S\$423.0m for FY25.
* **DPU:** 1.95 Scts in 4QFY25 and 8.02 Scts for FY25.
Earnings Revisions
FYE Mar (S\$m) |
FY26F Previous |
FY27F Previous |
FY26F New |
FY27F New |
% chg FY26F |
% chg FY27F |
Gross revenue |
920.8 |
935.7 |
920.8 |
935.7 |
0.00% |
0.00% |
Distribution income |
440.0 |
450.1 |
438.3 |
450.2 |
-0.39% |
0.03% |
DPU (Scts) |
8.33 |
8.49 |
8.29 |
8.494 |
-0.38% |
0.02% |
ESG Overview
MPACT’s ESG performance, as evaluated by LSEG, reveals a mixed profile [[4]].
* **Overall ESG Score:** B- [[4]]
* **Environmental Pillar:** B- [[4]]
* **Social Pillar:** C+ [[4]]
* **Governance Pillar:** B [[4]]
Environmental Performance
MPACT’s Environmental pillar highlights both strengths and weaknesses [[4]]. The company has shown improvements in emissions disclosure and environmental innovation scores [[4]]. However, it received a poor rating on its emissions score (D-) and environmental innovation (D+) [[4]].
Social and Governance Aspects
The Social pillar saw improvements in workforce and community categories [[4]]. MPACT’s Governance pillar improved due to better scores in the Management category [[4]]. However, it received a D for shareholders’ rights and a C for Corporate Social Responsibility (CSR) [[4]].
ESG Targets and Achievements
MPACT has set targets for FY23/24, including improving electricity intensity by 3% from the FY19/20 baseline and maintaining BCA Green Mark certifications for Singapore properties [[4]]. It also aims to achieve green certifications for Gateway Plaza and The Pinnacle Gangnam by FY24/25 [[4]].
All five Singapore properties have maintained their BCA Green Mark certifications, with three certified Platinum and two Gold [[4]]. The number of Green Building Certifications for MPACT’s overseas portfolio increased to 11 out of 13 in 2022, including CASBEE Green Certification for all Japan properties and BEAM Plus Platinum Certification for Festival Walk [[4]].
Strategic ESG Initiatives
MPACT established a Green Finance Framework (GFT) in January 2022, aligning with Green Bond Principles and Green Loan Principles [[4]]. This framework demonstrates MPACT’s intent to engage in Green Financing Transactions (GFTs), which could diversify its funding sources and potentially lower its cost of capital [[5]].
Key Financial Ratios and Drivers
* **Gross Property Revenue Growth:** 16.0% (Mar-24A), -5.1% (Mar-25A), 1.3% (Mar-26F), 1.6% (Mar-27F), 1.5% (Mar-28F) [[6]]
* **NPI Growth:** 15.2% (Mar-24A), -6.1% (Mar-25A), 24.3% (Mar-26F), 1.6% (Mar-27F), 1.5% (Mar-28F) [[6]]
* **Net Property Income Margin:** 76.0% (Mar-24A), 75.2% (Mar-25A), 92.3% (Mar-26F), 92.3% (Mar-27F), 92.3% (Mar-28F) [[6]]
* **DPS Growth:** (7.35%) (Mar-24A), (9.99%) (Mar-25A), 3.42% (Mar-26F), 2.41% (Mar-27F), 1.76% (Mar-28F) [[6]]
* **Rental Reversion:** 6.0% (Mar-24A), 9.2% (Mar-25A), 1.7% (Mar-26F), 1.7% (Mar-27F), 1.5% (Mar-28F) [[6]]
* **Occupancy Rate:** 97.2% (Mar-24A), 97.3% (Mar-25A), 97.2% (Mar-26F), 97.2% (Mar-27F), 97.2% (Mar-28F) [[6]]
