CGS International Securities
July 31, 2025

Mapletree Pan Asia Commercial Trust: Singapore Strength Shines as Overseas Drag Continues – In-Depth 2025 Analysis & Peer Comparison

Overview: MPACT Navigates Singapore Resilience and Overseas Headwinds

Mapletree Pan Asia Commercial Trust (MPACT) has delivered its 1QFY3/26 results, marked by robust performance in its Singapore portfolio but tempered by challenges across its overseas operations. Despite a year-on-year dip in top-line figures due to overseas softness and asset divestments, MPACT’s strong fundamentals, prudent capital management, and forward-looking asset enhancement initiatives set the stage for stability and potential upside. CGS International maintains its “Add” rating with a target price of S\$1.48, reflecting confidence in MPACT’s yield and future prospects.

Key Financial Highlights and Portfolio Metrics

• 1QFY3/26 Revenue: S\$218.6m, down 7.6% YoY, mainly due to the divestment of Mapletree Anson and weaker overseas performance.
• Net Property Income (NPI): S\$166m, down 8.1% YoY.
• Distribution Per Unit (DPU): 2.01 Scts, a 3.8% YoY decrease, cushioned by interest savings from reduced borrowings and lower debt costs.
• Aggregate Leverage: 37.9% at end-1Q; average cost of debt improved to 3.32%.
• Debt Profile: 77.7% on fixed rates; 88% of distributable income hedged into SGD.
• Portfolio Occupancy: 89.3% committed occupancy; rental reversion averaged +1.4% in the quarter.

Singapore Portfolio: Resilience Amidst Market Fluctuations

MPACT’s Singapore assets remain the group’s anchor, delivering strong occupancy and positive rental reversions despite a marginal dip in shopper traffic.

• VivoCity: 99.7% committed occupancy. 1QFY25 shopper traffic fell 1.3% YoY, but tenant sales rose 2.1% YoY.
• Mapletree Business City (MBC): Uptick in occupancy to 92.6%.
• Other Singapore Properties: 98.8% occupancy.
• Rental Reversions (FY25): Ranged from -2.7% at MBC to +14.7% at VivoCity.
• Asset Enhancement at VivoCity: Phase 1 at B2 completed and fully leased; Phase 2 (14,000 sq ft added by converting carparks and reconfiguring space) on track for end-2025 completion, nearly fully committed. Management expects ROI above 10%.

Overseas Portfolio: Mixed Performance and Strategic Moves

Hong Kong – Festival Walk (FW):

• Committed occupancy at 97.9%.
• Rental reversions remained negative at -7.9% in 1QFY26.
• Tenant sales dropped 3.2% YoY, but shopper traffic rose 7.8% YoY.
• Ongoing efforts in tenant remixing and marketing to boost footfall.

China:

• Occupancy slightly dipped to 85.9%.
• Negative rental reversions deepened to -19.4%.
• Focus remains on maintaining high occupancy to weather market pressure.

Japan:

• Stable occupancy at 99.9%.
• Positive rental reversion at +7.9% in 1QFY26.
• Announced divestment of TS Ikebukuro (Tokyo) and ABAS Shin-Yokohama Building (Yokohama) in July 2025. Expected completion by end-August 2025, with proceeds likely to reduce gearing to 37.6% if used for debt repayment.

Financial Summary: Growth, Stability, and Yield

Peer Comparison: MPACT’s Standing Among S-REITs

Retail S-REITs

Other S-REITs Peer Group Averages (Selected)

• Industrial S-REITs: Average dividend yield 6.8%–6.9% with leverage in the high 30%–40% range. Notables include CapitaLand Ascendas REIT (CLAR SP), Mapletree Industrial Trust (MINT SP), and Mapletree Logistics Trust (MLT SP).
• Office S-REITs: Keppel REIT (KREIT SP), OUE REIT (OUEREIT SP), and Suntec REIT (SUN SP) show yields around 6%–7% and asset leverage above 40%.
• Overseas-Centric S-REITs: CapitaLand China Trust (CLCT SP) and Sasseur REIT (SASSR SP) offer higher yields but face market-specific risks.
• Hospitality S-REITs: CapitaLand Ascott Trust (CLAS SP), CDL Hospitality Trust (CDREIT SP), and Far East Hospitality Trust (FEHT SP) demonstrate yields of 6%–7%.
• Healthcare S-REITs: Parkway Life REIT (PREIT SP) has a lower yield but benefits from defensive sector characteristics.

ESG Performance: Ambitious Targets, Room for Improvement

MPACT’s ESG journey continues, with ambitious targets but lagging scores relative to peers:

• LSEG ESG Rating: B- overall; Environmental (B-), Social (C+), Governance (B).
• Ranked 88th out of 101 Singapore companies and last among 26 REITs in Singapore for ESG.
• Environmental initiatives: 100% green-certified portfolio, 2.7% YoY energy intensity reduction, 13.6% YoY drop in Scope 2 emissions via RECs in Japan and Gateway Plaza.
• Green financing at 43% of total borrowings; 30.6% of portfolio (by NLA) under green leases.
• Targeting 33% green lease participation by FY26F, 60% by FY30F, and net zero emissions by 2050; solar capacity to rise to 4,200 kWp by FY26F.
• Social initiatives: 51 training hours per employee in FY25.
• Governance: D for shareholder rights, C for CSR.

While ESG momentum is improving, faster implementation and clearer disclosures could bolster MPACT’s appeal to ESG-focused funds.

Key Risks and Potential Catalysts

• Risks: Currency volatility, prolonged overseas weakness, slower-than-expected backfilling of vacancies.
• Catalysts: Successful tenant remixing at Festival Walk, capital recycling, reinvestments, and further asset enhancements.

Major Shareholders and Market Data

• Temasek Holdings: 55.5%
• Schroders: 3.2%
• Blackrock: 1.4%
• Market Cap: S\$6,905m (US\$5,342m)
• Free Float: 44.5%
• Current Price (as of report): S\$1.31
• Target Price: S\$1.48 (13% upside)
• Dividend Yield (FY26F): 6.3%
• Shares Outstanding: 5,268m

Conclusion: Add Rating Reiterated on Attractive Yield and Singapore Strength

Despite persistent overseas challenges, MPACT’s resilience in Singapore, prudent capital management, and ongoing enhancement initiatives underpin its “Add” rating. With a projected 6.3% yield and potential upside from asset recycling and operational improvements, MPACT remains an appealing option for yield-driven investors seeking diversified S-REIT exposure.

About the Analysts

• LOCK Mun Yee | [email protected] | +65 6210 8606
• LI Jialin | [email protected] | +65 6210 8663

Stock Ratings Framework

• Add: Expected total return above 10% over 12 months
• Hold: Expected total return 0–10% over 12 months
• Reduce: Expected total return below 0% over 12 months