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
| Year (Mar) | 24A | 25A | 26F | 27F | 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 |
| DPS (S\$) | 0.089 | 0.080 | 0.083 | 0.085 | 0.086 |
| Dividend Yield | 6.80% | 6.12% | 6.33% | 6.48% | 6.60% |
| Asset Leverage | 39.9% | 37.2% | 37.2% | 37.1% | 37.0% |
| Book Value per Share (S\$) | 1.75 | 1.78 | 1.77 | 1.77 | 1.77 |
| P/BV (x) | 0.75 | 0.74 | 0.74 | 0.74 | 0.74 |
| Recurring ROE | 4.69% | 4.53% | 6.03% | 6.20% | 6.32% |
Peer Comparison: MPACT’s Standing Among S-REITs
Retail S-REITs
| Company | Bloomberg Ticker | Price (S\$) | Target Price | Market Cap (US\$m) | Asset Leverage | P/BV (x) | Dividend Yield FY26F |
|---|---|---|---|---|---|---|---|
| CapitaLand Integrated Commercial Trust | CICT SP | 2.24 | 2.45 | 12,681 | 38.7% | 1.07 | 5.3% |
| Frasers Centrepoint Trust | FCT SP | 2.25 | 2.70 | 3,533 | 42.8% | 1.01 | 5.5% |
| Lendlease Global Commercial REIT | LREIT SP | 0.56 | 0.69 | 1,060 | 38.0% | 0.76 | 7.1% |
| Mapletree Pan Asia Commercial Trust | MPACT SP | 1.31 | 1.48 | 5,342 | 37.9% | 0.75 | 6.3% |
| Starhill Global REIT | SGREIT SP | 0.55 | 0.60 | 978 | 36.2% | 0.80 | 6.7% |
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
This article is for informational purposes for financial audiences and does not constitute investment advice.
