CGS International April 28, 2025
Mapletree Pan Asia Commercial Trust (MPACT) Navigates Overseas Headwinds: Singapore Strength Offsets Challenges – FY25 Results & Outlook
Mapletree Pan Asia Commercial Trust (MPACT) released its financial results for the fourth quarter (4QFY25) and the full fiscal year ending March 2025 (FY25). While demonstrating resilience in its home market of Singapore, the trust faced challenges from its overseas portfolio.
FY25 Financial Performance Overview
MPACT reported a decline in its 4QFY25 financial figures, primarily attributed to the divestment of Mapletree Anson and reduced contributions from its international assets.
- Revenue: S\$222.9 million, down 6.8% year-on-year (yoy).
- Net Property Income (NPI): S\$169.5 million, down 7.4% yoy.
- Distribution Per Unit (DPU): 1.95 Singapore cents, a decrease of 14.8% yoy.
For the full fiscal year FY25:
- Revenue: S\$908.8 million, down 5.1% yoy.
- NPI: S\$683.5 million, down 6.1% yoy.
- DPU: 8.02 Singapore cents, down 10.0% yoy.
The 4Q and FY25 DPU figures represented 24% and 98.8% of CGS International’s forecasts, respectively, indicating results were broadly in line with expectations.
Portfolio Valuation and Financial Health
MPACT conducted its annual portfolio valuation for FY25. Key highlights include:
- Singapore Assets: Enjoyed a significant 7.9% valuation uplift.
- Overseas Assets: Declines were noted in the value of China and Japan assets, partially offsetting the Singapore gains.
- Aggregate Leverage: Stood at a healthy 37.7% as of end-4QFY25.
- Cost of Debt: Showed marginal improvement quarter-on-quarter (qoq) to 3.51%.
- Debt Management: 79.9% of debt was on fixed rates, and 90% of distributable income was hedged into Singapore dollars (S\$) as of end-4QFY25.
Singapore Portfolio: A Pillar of Strength
The Singapore portfolio was the primary driver of MPACT’s performance, led by the strong results of VivoCity.
- Occupancy: Committed occupancy remained high, with VivoCity at 99.3%, other Singapore properties at 99.5%, and Mapletree Business City (MBC) at 91.2% in 4QFY25.
- Rental Reversions: FY25 saw positive rental reversions across the Singapore portfolio, ranging from +2.2% for MBC to an impressive +16.8% for VivoCity.
- VivoCity Performance: Despite high occupancy and strong reversions, 4QFY25 shopper traffic dipped slightly by 0.1% yoy, while tenant sales saw a larger decline of 2.1% yoy.
- VivoCity Asset Enhancement (AEI): The ongoing AEI at Basement 2 is progressing well. Phase 1 is nearing completion with most food kiosks operational. Phase 2, which includes adding 14,000 sq ft of lettable area by converting carpark space and reconfiguring layouts, is on track for completion by the end of calendar year 2025. Management projects a Return on Investment (ROI) exceeding 10% for this initiative.
Overseas Portfolio: Facing Headwinds
The performance of MPACT’s overseas assets continued to be a drag on overall results.
- Festival Walk (Hong Kong): Committed occupancy stood at 96.8% in 4QFY25. While still negative, the rent reversion trajectory showed moderation at -6.9%, compared to -7.2% in 3QFY25. For the full FY25, tenant sales declined by 8.4%, although shopper traffic increased by 5.6% due to marketing campaigns and celebrity appearances.
- China Properties: Occupancy saw a slight improvement to 86.1%. However, negative rental reversions persisted into FY25, recorded at -9.3%.
- Japan Properties: Performance continued to drag, prompting management to review the portfolio composition in Japan.
- Management Strategy: MPACT will continue focusing on high committed occupancies and positive rental reversions in Singapore. For overseas properties, the focus is on targeted tenant retention measures and portfolio optimisation.
Detailed Financial Results Comparison (FY25 vs FY24)
| FYE Mar (S\$ m) |
4Q FY25 |
4Q FY24 |
FY25 Cum |
FY24 Cum |
yoy chg |
| Revenue |
222.9 |
239.2 |
908.8 |
958.1 |
-5.1% |
| Direct expenses |
(53.3) |
(56.1) |
(225.3) |
(230.2) |
-2.1% |
| Net property income |
169.5 |
183.1 |
683.5 |
727.9 |
-6.1% |
| NPI margin |
76.1% |
76.6% |
75.2% |
76.0% |
-1.0% |
| Interest income |
0.5 |
0.6 |
2.1 |
2.5 |
-18.0% |
| Manager’s mgt fees |
(11.0) |
(12.8) |
(45.0) |
(49.8) |
-9.7% |
| Performance fee |
– |
– |
– |
– |
nm |
| Trustee’s fee |
(0.4) |
(0.5) |
(1.8) |
(1.8) |
-3.2% |
| Other trust expenses |
(0.9) |
(1.5) |
(3.5) |
(3.9) |
-10.5% |
| Borrowing costs |
(51.6) |
(57.0) |
(220.4) |
(228.0) |
-3.3% |
| Profit from Associates/JV |
4.8 |
1.8 |
8.9 |
6.4 |
38.7% |
| PBT before revaluation and exceptionals |
110.9 |
113.8 |
423.7 |
453.2 |
-6.5% |
| Forex loss |
(0.1) |
1.6 |
0.8 |
4.9 |
-84.1% |
| FV gain/(loss) on IP |
274.4 |
141.8 |
154.0 |
141.8 |
8.6% |
| FV gain/(loss) on derivatives |
0.5 |
1.2 |
(1.3) |
2.6 |
nm |
| Profit before tax |
385.9 |
258.3 |
581.2 |
602.6 |
-3.5% |
| Tax |
10.5 |
(0.3) |
6.1 |
(19.5) |
nm |
| Profit after tax |
396.4 |
258.1 |
587.3 |
583.1 |
0.7% |
| Distributable income |
103.6 |
120.5 |
423.0 |
468.6 |
-9.7% |
| DPU (cts) |
1.95 |
2.29 |
8.02 |
8.91 |
-10.0% |
Note: Cum = Cumulative, nm = not meaningful, IP = Investment Properties, FV = Fair Value
Forecast Adjustments and Valuation
Following the results, minor adjustments were made to the DPU forecasts for FY26F and FY27F, primarily reflecting fine-tuned projections for funding costs.
- FY26F DPU: Decreased slightly by 0.379% to 8.29 Singapore cents.
- FY27F DPU: Increased marginally by 0.021% to 8.494 Singapore cents.
The Discounted Dividend Model (DDM)-based Target Price (TP) for MPACT was lowered from S\$1.53 to S\$1.48. This adjustment reflects tweaked forward earnings assumptions based on a potentially slower pace of recovery due to macroeconomic slowdown, and a cost of equity assumption of 7.71%.
Investment Thesis and Outlook
Despite the overseas challenges, the ‘Add’ rating for MPACT is maintained, primarily due to its inexpensive valuation.
- Dividend Yield: The trust offers an attractive forecast dividend yield of 6.8% for FY26F, suggesting that much of the slower overseas performance may already be priced into the stock.
- Current Price vs. Target Price: The current price of S\$1.22 offers a potential upside of 21.3% to the revised target price of S\$1.48.
- Re-rating Catalysts: Potential positive drivers include successful tenant remixing at Festival Walk, strategic capital recycling (asset sales), and accretive re-investments.
- Downside Risks: Key risks involve unfavourable foreign exchange movements that could erode earnings growth, and a longer-than-anticipated period required to backfill vacancies in the portfolio.
Financial Summary & Forecasts
| Financial Summary (S\$m) |
Mar-24A |
Mar-25A |
Mar-26F |
Mar-27F |
Mar-28F |
| Gross Property Revenue |
958.1 |
908.8 |
920.8 |
935.7 |
949.3 |
| Net Property Income |
727.9 |
683.5 |
849.5 |
863.5 |
876.4 |
| Net Profit |
576.7 |
578.4 |
563.9 |
580.7 |
593.1 |
| Distributable Profit |
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% |
Note: A = Actual, F = Forecast, EPS = Earnings Per Share, DPS = Dividend Per Unit, BVPS = Book Value Per Share, P/E = Price-to-Earnings, P/BV = Price-to-Book Value, ROE = Return on Equity.
ESG Considerations
MPACT’s commitment to Environmental, Social, and Governance (ESG) factors is reflected in its operations and reporting.
- LSEG ESG Score: MPACT received a B- overall score for 2024 from LSEG. This comprises B- for Environmental, C+ for Social, and B for Governance pillars.
- Improvements: The Environmental score improved due to better emissions disclosure and environmental innovation scores. The Social pillar saw gains in workforce and community categories, while the Governance pillar improved in the Management category.
- Areas for Improvement: The trust received lower scores (D-) for emissions and (D+) for environmental innovation. Within Governance, shareholder rights scored D, and Corporate Social Responsibility (CSR) scored C.
- Targets: FY23/24 targets included a 3% improvement in electricity intensity (vs FY19/20 baseline), maintaining BCA Green Mark certifications for Singapore properties, and achieving green certifications for Gateway Plaza and The Pinnacle Gangnam by FY24/25.
- Achievements: All five Singapore properties maintain BCA Green Mark certifications (3 Platinum, 2 Gold). The overseas portfolio increased its Green Building Certifications to 11 (out of 13) in 2022, including CASBEE certifications in Japan (5 ‘S’ Excellent, 4 ‘A’ Very Good), renewal of Festival Walk’s BEAM Plus Platinum, and EDGE Green Certification for Sandhill Plaza.
- Green Finance: MPACT established a Green Finance Framework (GFT) in January 2022, aligned with international Green Bond and Green Loan Principles. This framework signals intent to enter Green Financing Transactions, potentially diversifying funding sources and possibly lowering capital costs through ESG-linked features.
- Overall Assessment: While MPACT demonstrates commitment to ESG, stronger focus, faster implementation, and enhanced disclosures could further improve its scores and standing.
Market Position and Shareholder Information
- Market Cap: US\$4,888m / S\$6,426m
- Average Daily Turnover: US\$9.91m / S\$13.26m
- Shares Outstanding: 5,268m
- Free Float: 44.5%
- Major Shareholders: Temasek Holdings (55.5%), Schroders (3.2%), Blackrock (1.4%)
- Price Performance (Absolute): 1M (-3.2%), 3M (+1.7%), 12M (-3.2%)
