Public Announcement: This will be the last article covering Mapletree Pan Asia Commercial Trust (“MPACT”) till further notice. The reason is that I was originally not in favor of the merger, and it was worth noting that their DPU and occupancy rate saw multiple declines over the last few quarters, led by their overseas properties. This indicates a higher risk to reward ratio which may reward investors willing to take the risk for a recovery play.
On 23 January 2025, MPACT announced their third quarter result for FY2025. This quarter has been relatively stable with no significant change noted. Their occupancy rate however, has continued its downtrend and declined to 90.0%. There is a need to determine if this may have future negative impact to their DPU, which seems to have stabilized at these levels. Investors should continue to monitor over the next few quarters.
Disclaimer: Not financial advice. All data and information provided on this site is for informational purposes only.
Website: Financial Statements And Related Announcement::Third Quarter Results
Financial Highlights
Distribution Per Unit (“DPU”)
| Metrics | Current | Previous |
|---|---|---|
| Distribution Per Unit | +1.0% | -5.3% |
| Rating | Favorable | Unfavorable |
For MPACT, DPU disclosed are as follows:
- First 9 months of FY2025: SGD0.0407 per share
- Third Quarter of FY2025: SGD0.0200 per share
- Second Quarter of FY2025: SGD0.0198 per share
- First Quarter of FY2025: SGD0.0209 per share
DPU for the third quarter of FY2025 increased by 1.0% to SGD0.0200 per share from SGD0.0198 per share for the previous quarter. When comparing with the previous quarter, it was noted that the DPU increase is mainly supported by the reduction in net finance costs. This was due to the use of Mapletree Anson’s divestment proceeds to reduce borrowings. This metric is Favorable.
Occupancy
| Metrics | Current | Previous |
|---|---|---|
| Occupancy | 90.0% | 90.3% |
| Rating | Unfavorable | Unfavorable |
Occupancy rate as of 31 December 2024 remain relatively unchanged at 90.0% and is Unfavorable. As a gentle reminder note, the sharp decrease in previous quarter was mainly contributed by the collective Japan Properties, which the status remains unchanged this quarter.
Gearing ratio
| Metrics | Current | Previous |
|---|---|---|
| Gearing Ratio | 38.2% | 38.4% |
| Rating | Neutral | Neutral |
Gearing ratio remain relatively unchanged at 38.2% as of 31 December 2024. The metric remains Neutral.
Interest coverage
| Metrics | Current | Previous |
|---|---|---|
| Interest Coverage | 2.8x | 2.8x |
| Rating | Neutral | Neutral |
The adjusted interest coverage remained unchanged at 2.8 times as of 31 December 2024. The metric remains Neutral as it is still below my preference of 3.0 times.
Debt maturity profile
| Metrics | Current | Previous |
|---|---|---|
| Debt Maturity Profile | 3.1 years | 3.3 years |
| Rating | Favorable | Favorable |
Weighted average term to maturity of their debt shortened to 3.1 years as of 31 December 2024. This is Favorable and it allows them sufficient time to refinance their debts as they fall due.
Price to Book Ratio
| Metrics | Current | Previous |
|---|---|---|
| Price to Book Ratio | 0.71 | 0.72 |
| Rating | Favorable | Favorable |
The Price to Book (“P/B”) ratio currently stands at 0.71. This is computed using the closing share price of SGD1.22 on 28 January 2025 and the net asset value per share of SGD1.73 as of 31 December 2024. The metric is Favorable as we are paying below book value for its assets.
As of 28 January 2025, the Market Capitalization is approximately SGD6,422 million.
Website: Yahoo Finance: Mapletree Pan Asia Commercial Trust (N2IU.SI)
Dividend
| Year | Yield | Total |
|---|---|---|
| 2025 | 1.64% | SGD 0.020 |
| 2024 | 7.02% | SGD 0.086 |
| 2023 | 7.45% | SGD 0.091 |
| 2022 | 8.26% | SGD 0.101 |
It is worth noting that the dividend payout for the first quarter of the calendar year 2025 is lower than the previous calendar year. As a prudent measure, when annualized this amounted to a dividend of SGD 0.080 per share.
With a closing share price of SGD1.22 as of 28 January 2025, this translates to a dividend yield of 6.56%. For my benchmark, a general reasonable yield would be around 5.25%. MPACT’s dividend yield is above the benchmark. The dividend yield is Favorable.
Website: Reasonable Dividend Yield 2025Q1 – 5.25%
Interest Rate Sensitivity
The Federal Reserve on 30 January 2025 have kept interest rates unchanged at a range of 4.25% to 4.50%. This is due to significant uncertainty in the U.S. economic landscape, with a healthy set of macroeconomic fundamentals that have changed little in recent months, but coming decisions from the Trump administration on immigration, tariffs, taxes and other areas that could prove disruptive.
Website: Fed leaves rates unchanged, sees no hurry to cut again
The Federal Reserve has subsequently announced on 15 November 2024 that they will cut their key interest rate slowly and deliberately in the coming months, in part because inflation has shown signs of persistence, and the officials want to see where it heads next.
Website: Powell says Fed will likely cut rates cautiously given persistent inflation pressures
In the event that the interest rate change, MPACT may be subjected to changes in their cost of debt in the near future. The debt profile of MPACT is as below:
| Description | Amount (SGD’000) |
|---|---|
| Total Debt | $6,106,200 |
| Debt Not Hedged (%) | 18.5% |
| Debt at Floating Rate Exposed | $1,129,647 |
| Distributable Income FY2024 | $468,569 |
I have performed the interest rate sensitivity analysis as below.
| Change in Interest Rates | Change in Distributable Income (SGD’000) | Change as % of FY2024 Distribution |
|---|---|---|
| 50 bps | $5,648 | 1.2% |
| 100 bps | $11,296 | 2.4% |
| 150 bps | $16,945 | 3.6% |
| 200 bps | $22,593 | 4.8% |
Do note the above is my estimation which may be different from management’s estimation. Nonetheless, if the interest rates were to increase by the basis points above, MPACT may experience a fall in DPU accordingly.
Tenant Profile
MPACT has an enlarged portfolio covering multiple trade sectors. The high quality and diverse tenant base provide resilience to the MPACT portfolio across challenging events. As of 30 September 2024, the top 10 tenants accounted for only 21.7% of MPACT’s portfolio with no single tenant accounting for more than 5.8% during the period, providing income diversity to the portfolio.
Summary
| Metrics | Financials | Rating |
|---|---|---|
| Distribution Per Unit | +1.0% | Favorable |
| Occupancy | 90.0% | Unfavorable |
| Gearing Ratio | 38.2% | Neutral |
| Interest Coverage | 2.8x | Neutral |
| Debt Maturity Profile | 3.1 years | Favorable |
| Price to Book Ratio | 0.71 | Favorable |
| Overall | Neutral |
Overall, the metrics remain Neutral for MPACT. Based on this quarter update, it would seem that MPACT may have stabilized. Investors will therefore need to monitor if there are any signs of recovery for its assets.
Background
MPACT is a real estate investment trust (“REIT”) positioned to be the proxy to key gateway markets of Asia. Listed on the Singapore Exchange Securities Limited (“SGX-ST”), it made its public market debut as Mapletree Commercial Trust on 27 April 2011 and was renamed MPACT on 3 August 2022 following the merger with Mapletree North Asia Commercial Trust.
Its principal investment objective is to invest on a long-term basis, directly or indirectly, in a diversified portfolio of income-producing real estate used primarily for office and/or retail purposes, as well as real estate-related assets, in the key gateway markets of Asia (including but not limited to Singapore, China, Hong Kong, Japan and South Korea).
MPACT is managed by MPACT Management Ltd. (“MPACTM” or the “Manager”), a wholly owned subsidiary of MIPL. The Manager aims to provide unitholders of MPACT (“Unitholders”) with a relatively attractive rate of return on their investment through regular and steady distributions, and to achieve long-term stability in Distribution per Unit (“DPU”) and Net Asset Value (“NAV”) per Unit, while maintaining an appropriate capital structure for MPACT.
Previous Post
Website: Mapletree Pan Asia Commercial Trust (SGX: N2IU): 2025 Half Year Result
One thought on “Mapletree Pan Asia Commercial Trust (SGX: N2IU): 2025 Third Quarter Result”
Comments are closed.