Mapletree Pan Asia Commercial Trust (MPACT): A Deep Dive

Mapletree Pan Asia Commercial Trust (MPACT) faced challenges in its Q3 FY25 performance, with a Distribution Per Unit (DPU) of 2.0 Singapore cents, reflecting a year-on-year decline of 9.1%. The results fell short of expectations, achieving only 22.8% of the FY25 forecast. The drop was attributed to weaker overseas contributions and adverse forex impacts. Lower net property income (NPI) stemmed from the divestment of Mapletree Anson and sluggish performance in overseas assets, though VivoCity’s robust performance helped cushion the decline.

Portfolio occupancy slipped slightly to 90%, driven by weaker take-up in China properties and The Pinnacle Gangnam. However, rental reversions averaged a positive 4.6% in Q3. MPACT’s aggregate leverage stood at 38.2%, with an average cost of debt improving to 3.52%. Notably, 81.5% of its debt was on fixed rates, and 91% of its distributable income was hedged into Singapore dollars.

Singapore properties performed strongly, with VivoCity’s occupancy nearing full capacity at 99.9%. Mapletree Business City (MBC) remained stable at 92.5%. Ongoing asset enhancements at VivoCity caused marginal dips in tenant sales despite a 4.5% increase in shopper traffic. This rejuvenation exercise, expected to conclude by end-2025, is projected to yield a return on investment (ROI) of over 10%.

Overseas, Festival Walk’s occupancy rose to 97.1%, while China properties dipped to 84.3%. Post-Q3, The Pinnacle Gangnam achieved full occupancy after signing a significant lease, resulting in an impressive 26.8% rental reversion for 9MFY25. However, Festival Walk and Japan properties reported negative reversions of -7.2% and -9%, respectively.

Despite slower overseas performance, MPACT’s FY25-27 forecasts remain unchanged, with recovery expected post-VivoCity enhancements. The dividend yield forecast for FY25 stands at an attractive 6.7%, and the target price remains unchanged at S\$1.53. The report highlights re-rating catalysts such as tenant remixing at Festival Walk and capital reinvestments.

Recommendation: Add

CapitaLand Ascott Trust (CLAS)

CapitaLand Ascott Trust (CLAS) maintains a strong position in the hospitality sector. With a current price of S\$0.88 and a target price of S\$1.18, the trust presents a promising upside. The dividend yield for FY24F, FY25F, and FY26F stands at 6.9%, 7.1%, and 7.8%, respectively. CLAS is noted for its robust market capitalization of S\$2,476 million and an asset leverage of 38.3%.

Recommendation: Add

CDL Hospitality Trust (CDREIT)

CDL Hospitality Trust (CDREIT) trades at S\$0.87, with a target price of S\$1.16. The trust’s dividend yield projections for FY24F, FY25F, and FY26F are 6.2%, 7.4%, and 7.2%, respectively. With a market cap of S\$806 million and an asset leverage of 38.8%, the trust holds a stable position in the hospitality market.

Recommendation: Add

Far East Hospitality Trust (FEHT)

Far East Hospitality Trust (FEHT) is another strong player in the sector, with a share price of S\$0.61 and a target price of S\$0.78. Dividend yields of 7.0% for FY24F through FY26F reflect consistent financial performance. The trust boasts an asset leverage of 30.8% and a market cap of S\$904 million.

Recommendation: Add

Frasers Hospitality Trust (FHT)

Frasers Hospitality Trust (FHT) has a market cap of S\$773 million and an asset leverage of 39.3%. With a share price of S\$0.55, the trust’s dividend yields are projected at 4.1% for FY24F, increasing to 4.8% by FY26F. FHT continues to show steady performance within the hospitality sector.

Recommendation: Not Rated

Industrial Sector: AIMS AMP Capital Industrial REIT

AIMS AMP Capital Industrial REIT has a share price of S\$1.27 and remains a notable player in the industrial sector. Its dividend yields for FY24F to FY26F range from 7.4% to 7.5%. With an asset leverage of 33.4% and market cap of S\$754 million, the trust continues to deliver solid performance.

Recommendation: Not Rated

Mapletree Industrial Trust (MINT)

Mapletree Industrial Trust (MINT) trades at S\$2.20 with a target price of S\$2.82. It offers dividend yields of 6.1% to 6.4% for FY24F through FY26F. With a market cap of S\$4,644 million and an asset leverage of 39.8%, MINT holds a significant position in the industrial REIT market.

Recommendation: Add

Retail Sector: CapitaLand Integrated Commercial Trust (CICT)

CapitaLand Integrated Commercial Trust (CICT) maintains a strong performance in the retail sector. The trust trades at S\$1.95 with a target price of S\$2.45. Dividend yields are forecasted to rise from 5.5% to 6.2% by FY26F. With a market cap of S\$10,550 million and 39.4% asset leverage, CICT remains a dominant player.

Recommendation: Add

Lendlease Global Commercial REIT

Lendlease Global Commercial REIT trades at S\$0.55, with a target price of S\$0.71. The trust offers attractive dividend yields of 7.0% to 7.2% for FY24F through FY26F. It has a market cap of S\$988 million and an asset leverage of 40.7%.

Recommendation: Add

Starhill Global REIT

Starhill Global REIT trades at S\$0.51 with a target price of S\$0.60. The trust offers stable dividend yields of 7.2% for the coming financial years. It has a market cap of S\$857 million and an asset leverage of 36.2%, making it a solid investment option in the retail space.

Recommendation: Add