Mapletree Pan Asia Commercial Trust (SGX: N2IU) is the third and final Mapletree REIT listed on the Singapore Exchange to release its results for the 3rd quarter, as well as for the first 9 months of FY2024/25 ended 31 December 2024 yesterday (23 January) evening.

To recap, Mapletree Logistics Trust was the first of the 3 Mapletree REITs to release its results on Tuesday, followed by Mapletree Industrial Trust on Wednesday, and you can find my reviews via the respective links below:

For those who are new to Mapletree Pan Asia Commercial Trust (or MPACT for short), a quick introduction – it was formed via a merger between Mapletree Commercial Trust (which invests in commercial properties in Singapore) and Mapletree North Asia Commercial Trust (which invests in commercial properties in Hong Kong, China, Japan, and South Korea) in August 2022. The REIT is also a constituent of Singapore’s benchmark Straits Times Index.

As of 31 December 2024, MPACT’s portfolio comprises 17 commercial properties (used for retail and/or office purposes) in 5 key gateway markets of Asia – 4 in Singapore, 2 in China, 9 in Japan, and 1 in South Korea, valued at S$15.7 billion.

While the performance of its Singapore properties have remained resilient, the same cannot be said for its overseas properties – particularly, the occupancy rates for a number of its properties have declined, and negative rental reversions recorded. This dragged down the REIT’s financial results, as well as distribution payouts in the previous quarters.

Are there any improvements in the REIT’s overseas properties this time round? Let us find out in this post, where I will be reviewing its latest financial figures, portfolio occupancy and debt profile, as well as its distribution payout to unitholders:

Financial Figures (3Q FY2023/24 vs. 3Q FY2024/25, and 9M FY2023/24 vs. 9M FY2024/25)

In this section, you will find a review of MPACT’s financial figures for the 3rd quarter, as well as for the first 9 months of FY2024/25, compared against the figures recorded in the respective periods a year ago:

3Q FY2023/24 vs. 3Q FY2024/25:

3Q FY2023/243Q FY2024/25% Variance
Gross Revenue
(S$’mil)		$241.6m$223.7m-7.4%
Property Operating
Expenses (S$’mil)		$59.2m$56.8m-4.1%
Net Property
Income (S$’mil)		$182.4m$166.9m-8.5%
Distributable Income
to Unitholders (S$’mil)		$115.3m$104.7m-9.2%

My Observations: Overall, the weaker set of results was pretty much expected, given the headwinds the REIT is facing in its overseas properties – particularly a dip in occupancy and negative rental reversions.

Gross revenue fell by 7.4% year on year to S$223.7 million as a result of reduced contribution from the Singapore properties due to the divestment of Mapletree Anson on 31 July 2024 (however, if this was excluded, gross revenue from the Singapore properties would have been up by 0.2% year on year due to VivoCity’s stronger performance), as well as lower contribution from the overseas properties from lower occupancy, negative rental reversion, and weaker Japanese Yen, Hong Kong Dollar, and Chinese Yuan against the strong Singapore Dollar.

Property operating expenses was down by 4.1% year on year to S$56.8 million mainly due to the divestment of Mapletree Anson and lower utility expenses.

Even though finance costs improved by 9.7% year on year due to the REIT’s management using the proceeds from the divestment of Mapletree Anson to reduce borrowings, its distributable income to unitholders still tumbled by 9.2% year on year to S$104.7 million due to a lower net property income.

9M FY2023/24 vs. 9M FY2024/25:

9M FY2023/249M FY2024/25% Variance
Gross Revenue
(S$’mil)		$718.9m$686.0m-4.6%
Property Operating
Expenses (S$’mil)		$174.1m$172.0m-1.2%
Net Property
Income (S$’mil)		$544.8m$514.0m-5.7%
Distributable Income
to Unitholders (S$’mil)		$348.0m$319.5m-8.2%

My Observations: For the first 9 months of FY2024/25, its results was also weaker compared to that reported a year ago.

The 4.6% year-on-year decline in its gross revenue can be attributed to lower contribution from the Singapore properties due to the divestment of Mapletree Anson, along with lower contribution from the overseas properties due to lower occupancy, negative rental reversion, and a weaker Japanese Yen, Hong Kong Dollar, as well as the Chinese Yuan against the strong Singapore Dollar.

Property operating expenses was down by 1.2% year on year to S$172.0 million from the completion of the divestment of Mapletree Anson, and lower utilities expenses.

Finally, distributable income to unitholders fell by 8.2% year on year to S$319.5 million mainly due to lower contributions from the REIT’s overseas properties, as well as the absence of one-off property tax refund for the current financial year under review.

Portfolio Occupancy Profile (2Q FY2024/25 vs. 3Q FY2024/25)

As mentioned in the beginning of this post, one of the concerns I have with the REIT is its declining portfolio occupancy in the recent quarters – particularly, it fell from 96.7% in 3Q FY2023/24 (ended 31 December 2023) to 90.3% in 2Q FY2024/25 (ended 30 September 2024).

Has the REIT’s portfolio occupancy improved this quarter?

Let us find out in the table below, where I will be comparing the statistics reported for the current quarter under review (i.e., 3Q FY2024/25 ended 31 December 2024) against that reported in the previous quarter 3 months ago (i.e., 2Q FY2024/25 ended 30 September 2024):

2Q FY2024/253Q FY2024/25
Portfolio Occupancy
(%)		90.3%90.0%
Portfolio WALE (by Gross
Rental Income – years)		2.3 years2.2 years

My Observations: The 0.3 percentage point (pp) decline in its portfolio occupancy can be attributed to a decline in the occupancy of its China properties (from 87.1% in 2Q FY2024/25 to 84.3% in 2Q FY2024/25), as well as The Pinnacle Gangnam in South Korea (from 92.7% in 2Q FY2024/25 to 89.7% in 3Q FY2024/25)

In terms of the occupancy rates of the individual properties, those in Singapore have an occupancy rate of between 99.1% and 99.9% (which is a very healthy level). For the overseas properties, apart from Festival Walk (at 97.1% in 3Q FY2024/25, an improvement from 96.4% in 2Q FY2024/25), its properties in China, Japan, and South Korea have occupancy rates between 82.6% and 89.7% (which is still considered to be decent).

As far as rental reversions are concerned, while the percentages attained for the Singapore properties are in positive percentages, but they are at slightly lower percentages compared to the previous quarter (for Mapletree Business City, it is at +2.0% compared to +2.5% last quarter, for VivoCity, it is at +16.9% compared to +17.3% last quarter, and for the other Singapore properties, it is at +8.3% compared to +8.8% last quarter).

For the overseas properties, apart from some improvements for the Japan properties (from -9.5% in the previous quarter to -9.0% in the current quarter under review) and no further decline in terms of rental reversion for its China properties (at -2.9% for both quarters), the others all deteriorated further (for Festival Walk, it is at -7.2% compared to -6.1% in the previous quarter, and for The Pinnacle Gangnam, it is at -28.6% compared to -27.3% in the previous quarter).

Finally, lease expiries are well-spread out – with 2.0% of retail and 2.0% of office/business park leases due for renewal in 4Q FY2024/25. Between FY2025/26 and FY2027/28 (3 financial years), about 12.7% of retail leases and 11.9% of office/business park leases due for renewal each year, with the remaining 8.6% of retail leases and 13.6% of office/business park leases due for renewal in FY2028/29 or later.

Debt Profile (2Q FY2024/25 vs. 3Q FY2024/25)

I note the management’s efforts to bring down its aggregate leverage, where one of the things done was the divestment of Mapletree Anson, with the proceeds deployed to reduce floating-rate debt (and this has brought the REIT’s aggregate leverage down from 40.5% in 1Q FY2024/25 to 38.4% in 2Q FY2024/25 – which is a healthy level in my opinion).

In the table below, you’ll find a comparison of MPACT’s debt profile for the current quarter under review (i.e., 3Q FY2024/25 ended 31 December 2024) against that reported in the previous quarter (i.e., 2Q FY2024/25 ended 30 September 2024) to find out if it has continued to remain at a healthy level:

2Q FY2024/253Q FY2024/25
Aggregate Leverage
(%)		38.4%38.2%
Interest Coverage
Ratio (times)		2.8x2.8x
Average Term to Debt
Maturity (years)		3.3 years3.1 years
Average Cost of
Debt (%)		3.6%3.5%
% of Borrowings Hedged
to Fixed Rates (%)		84%82%

My Observations: Compared to the previous quarter, MPACT’s debt profile was largely stable, with its current aggregate leverage of 38.2% at a healthy level.

Looking at its debt maturity profile, for the final quarter of FY2024/25, it has 4% of borrowings due for refinancing. Over the next 3 financial years (between FY2025/26 and FY2027/28), it has an average of about 16% of borrowings due for refinancing in a single year (which I consider to be well-spread out), with the remaining 48% of borrowings due for refinancing only in FY2028/29 or later.

Distribution Payout to Unitholders

One aspect I like about MPACT is its quarterly distribution payout frequency (just like Mapletree Logistics Trust and Mapletree Industrial Trust).

The following table is MPACT’s distribution payout for 3Q FY2024/25 compared against that declared a year ago (i.e., 3Q FY2023/24):

3Q FY2023/243Q FY2024/25% Variance
Distribution Per
Unit (S$’cents)		2.20 cents2.00 cents-9.1%

If you are a unitholder of the REIT, do take note of the following dates on its latest distribution payout:

Ex-Date: 03 February 2025
Record Date: 04 February 2025
Payout Date: 07 March 2025

CEO Ms Sharon Lim’s Comments & Outlook (from the REIT’s Press Release)

“Our proactive management approach continues to yield positive outcomes, as demonstrated by Singapore’s steady performance and the full-quarter benefit of Mapletree Anson’s divestment. The accretive divestment has generated interest cost savings through strategic debt reduction while strengthening our balance sheet position. At VivoCity, we are implementing initiatives to future-proof the mall. Despite the resulting short-term disruptions on tenant sales, our flagship asset is seeing quarter-on-quarter (“qoq”) growth that outpaces the market. It remains firmly on track for long-term success.

As we enter 2025, we anticipate continued headwinds overseas. We are exploring all measures to address market-specific issues. While navigating near-term obstacles, MPACT’s core stability remains anchored by Singapore’s dominant position in the portfolio. We will persist in our pursuit to deliver sustainable value to our unitholders.”

Closing Thoughts

In terms of financial results, it was pretty much expected – for the Singapore properties, the lack of contribution from Mapletree Anson which was divested impacted its returns; for the overseas properties, negative rental reversions recorded for new/renewed leases in the previous quarters, together with a weaker foreign currency against the Singapore Dollar saw declining returns.

For its portfolio occupancy profile, even though the occupancy rates of its Singapore properties remained above 90%, but rental reversions have declined compared to the previous quarter (even though they are still in positive percentages) – and this could see a slow down in terms of growth in revenue contribution from the Singapore properties in the coming quarters ahead.

For the overseas properties, the rental reversion at Festival Walk has declined further (even though the occupancy rate have improved slightly). Another one is The Pinnacle Gangnam, where both occupancy rate and rental reversions have further deteriorated. On the other hand, a slight positive can be seen in its Japan properties, where occupancy rates (from 82.3% in the previous quarter to 82.6% in the current quarter) and rental reversion (from -9.5% in the previous quarter to -9.0% in the current quarter) saw slight improvements.

Debt profile continues to remain healthy – with aggregate leverage (of 38.2%) at a safe distance to the regulatory limit of 50%, and debt maturity over the next few years very well-spread out.

Looking ahead into the final quarter of FY2024/25, I expect MPACT to report a weaker financial result from a continued weakness in its overseas properties. Distribution payout should continue to see a high single-digit percentage drop compared to the year before. As I’m writing this post, I note that the Monetary Authority of Singapore (MAS) has loosened its monetary policy for the first time in nearly 5 years (you can read the full news report here), and we may see some improvements in terms of returns from its overseas properties (of course, that’s provided if there’s no adverse events in those countries that could lead to a further weakening of their currencies).

With that, I have come to the end of my review of MPACT’s latest 3Q and 9M FY2024/25 results. Do note that all the opinions expressed in this post are purely mine which I’m sharing for educational purposes only. They do not constitute any buy or sell calls for the REIT. You should always do your own due diligence before you make any investment decisions.

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Disclaimer: At the time of writing, I am a unitholder of Mapletree Pan Asia Commercial Trust.

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