Mapletree Pan Asia Commercial Trust (MPACT) Analysis: FY25 Results, DPU Forecast, and Investment Rating

Broker Name: CGS International
Date of Report: April 28, 2025

Mapletree Pan Asia Commercial Trust (MPACT): Navigating Overseas Headwinds with Singapore’s Strength

Mapletree Pan Asia Commercial Trust (MPACT) faces challenges in its overseas portfolio, but Singapore’s retail and office sectors show resilience. CGS International maintains an Add rating with a revised target price.

Key Takeaways from MPACT’s FY25 Results

• 4Q/FY25 DPU of 1.95 Scts, FY25 DPU of 8.02 Scts – broadly in line with forecasts. [[1]]
• Singapore portfolio driven by VivoCity, offsetting overseas underperformance. [[1]]
• Maintained Add rating, target price lowered to S\$1.48. [[1]]

MPACT’s Financial Performance in Detail

MPACT’s 4QFY3/25 saw a 6.8% decline in revenue and a 7.4% decrease in NPI, amounting to S\$222.9m and S\$169.5m, respectively. This was primarily due to the divestment of Mapletree Anson and reduced overseas contributions. Consequently, the 4Q DPU fell by 14.8% year-over-year to 1.95 Scts. [[1]]

However, the annual portfolio valuation for FY3/25F revealed a 7.9% valuation uplift in Singapore properties, which helped to offset declines in the values of assets in China and Japan. MPACT’s aggregate leverage ratio stood at 37.7% at the end of 4Q, with the average cost of debt improving slightly to 3.51%. A significant 79.9% of its debt was on fixed rates, and 90% of its distributable income was hedged into S\$ as of the end of 4QFY25. [[1]]

Singapore Portfolio: Retail and Office Reversions

Singapore’s retail and office sectors demonstrated strong reversions, ranging from +2.2% to +16.8%. [[1]]

Within the Singapore portfolio, VivoCity and other Singapore properties maintained high committed occupancy rates of 99.3% and 99.5%, respectively. Mapletree Business City (MBC) had a committed occupancy of 91.2%. FY25 Singapore portfolio reversions showed MBC at +2.2% and VivoCity at +16.8%. [[2]]

VivoCity experienced a slight dip in shopper traffic by 0.1% year-over-year, while tenant sales fell by a larger 2.1%. Asset enhancement initiatives (AEI) are underway at B2, with Phase 1 nearing completion and most food kiosks operational. Phase 2, which includes a 14,000 sq ft increase in lettable area through converting carparks and reconfiguring space, is on track for completion by the end of 2025F. Management projects an ROI of over 10% for this initiative. [[2]]

Overseas Portfolio: Festival Walk Stabilizing, China and Japan Lagging

Festival Walk (FW) showed signs of stabilization, while China and Japan continued to face challenges. [[2]]

FW’s committed occupancy stood at 96.8% as of 4QFY25, with rent reversion moderating to -6.9% compared to -7.2% in 3Q. Tenant sales at FW declined by 8.4% for FY25, but shopper traffic increased by 5.6% due to collaborative marketing campaigns and high-profile celebrity appearances. [[2]]

China properties saw a slight improvement in take-up to 86.1%, although negative reversions continued into FY25 at -9.3%. 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 for its overseas properties, including a review of portfolio composition in Japan. [[3]]

Revised DPU Forecasts and Target Price

FY26-27F DPUs have been adjusted by -0.379% to +0.021% post results to fine-tune projected funding costs. The DDM-based target price is lowered to S\$1.48 (cost of equity: 7.71%) due to adjustments in forward earnings assumptions reflecting a slower pace of recovery amid a macro slowdown. [[3]]

Given its 6.8% FY26F dividend yield, the slower overseas performance appears to be factored into the share price. Potential re-rating catalysts include tenant remixing at Festival Walk, capital recycling, and re-investments. Downside risks include unfavorable forex movements eroding earnings growth and longer-than-expected backfilling of vacancies. [[4]]

Investment Summary

• Rating: ADD (no change) [[4]]
• Current Price: S\$1.22 [[4]]
• Target Price: S\$1.48 [[4]]
• Previous Target: S\$1.53 [[4]]
• Up/Downside: 21.3% [[4]]

Key Changes in this Note

• FY26F DPU decreased by 0.379%. [[4]]
• FY27F DPU increased by 0.021%. [[4]]

Price Performance

• 1 Month: Absolute (%) -3.2, Relative (%) 0.6 [[4]]
• 3 Months: Absolute (%) 1.7, Relative (%) 0.4 [[4]]
• 12 Months: Absolute (%) -3.2, Relative (%) -29.4 [[4]]

Major Shareholders

• Temasek Holdings: 55.5% [[4]]
• Schroders: 3.2% [[4]]
• Blackrock: 1.4% [[4]]

Analyst(s)

• LOCK Mun Yee [[4]]
• LI Jialin [[4]]

Financial Summary

Results Comparison (Figure 1)

Key Earnings Revisions (Figure 2)

ESG Overview

MPACT’s ESG performance reveals both strengths and areas for improvement. [[4]]

• LSEG ESG Score: B- (2024) [[4]]
• Environmental Pillar: B- (improvement in emissions disclosure and environmental innovation) [[4]]
• Social Pillar: C+ (improvement in workforce and community categories) [[4]]
• Governance Pillar: B (better scores in Management category) [[4]]

ESG Concerns

• Emissions Score: D- [[4]]
• Environmental Innovation: D+ [[4]]
• Shareholders’ Rights: D [[4]]
• Corporate Social Responsibility (CSR): C [[4]]

ESG Targets and Achievements

• Improving electricity intensity by 3% from FY19/20 baseline. [[4]]
• Maintaining BCA Green Mark certifications for Singapore properties. [[4]]
• Achieving green certifications for Gateway Plaza and The Pinnacle Gangnam by FY24/25. [[4]]
• Singapore properties maintained BCA Green Mark certifications, with three Platinum and two Gold. [[4]]
• Overseas portfolio increased Green Building Certifications to 11 out of 13 in 2022. [[4]]
• CASBEE Green Certification for Japan properties, with 5 “S” Excellent and 4 “A” Very Good ratings. [[4]]
• Renewed Festival Walk’s BEAM Plus Platinum Certification. [[4]]
• Obtained EDGE Green Certification for Sandhill Plaza. [[4]]

ESG Trends

Establishment of Green Finance Framework (GFT) in Jan 2022, aligning to Green Bond Principles (2021) and Green Loan Principles (2021). This demonstrates MPACT’s intent to enter into Green Financing Transactions (GFTs), such as green loans and green bonds, which could diversify funding sources and potentially lower the cost of capital if structured with interest-reduction features based on ESG-related milestones. [[5]]

Financial Ratios and Key Drivers

P/BV vs Asset Leverage

• Rolling P/BV (x) [[5]]
• Asset Leverage (rhs) [[5]]

Dividend Yield vs Net DPS

• DPS (lhs) [[5]]
• Dividend Yield (rhs) [[5]]

Profit & Loss

Cash Flow

Balance Sheet

Key Ratios

Key Drivers