Mapletree Pan Asia Commercial Trust Review @ 6 November 2022

Basic Profile & Key Statistics

• Main Sector(s): Office & Retail
• Country(s) with Assets: Singapore, China, Hong Kong, Japan & South Korea
• No. of Properties (exclude development/associate/fund): 18

Key Indicators

Performance Highlight

Gross revenue, NPI, the amount available for distribution to unitholders increased yoy due to the mergers with Mapletree North Asia Commercial Trust. DPU on the other hand, could not have an apple-to-apple comparison.

Rental Reversion

Overall rental reversion for the 1H FY22/23 is at 1.1%. The rental reversion is mainly being dragged down by Festival Walk in Hong Kong.

Shopper Traffic & Tenant Sales

For VivoCity, tenant sales have improved and exceeded the pre-COVID level despite lower shopper traffic. As for Festival Walk, both tenants sales and shopper traffic are similar to last year and both are still below pre-COVID level.

Asset Enhancement Initiative

AEI which involves the conversion of part L1 anchor space into a new retail zone for VivoCity is ongoing. The area of TANGS department stores will be optimized and some areas would be used as the new zone.

Sensitivity to Interest Rate

For every 0.5% increase in interest, the DPD impact would be 0.16 cent per annum, approx. 1.6%.

Related Parties Shareholding

• REIT sponsor's shareholding: Above median for more than 20%
• REIT manager's shareholding: Above median for more than 20%
• Directors of REIT manager's shareholding: Above median for more than 10%

Lease Profile

• Occupancy: ± 5% from median
• WALE: Below median for more than 20%
• Highest lease expiry within 5 years: ± 10% from median; Falls in FY23/24
• Weighted average land lease expiry: ± 10% from median

Debt Profile

• Gearing ratio: ± 10% from median
• Gearing ratio including perps: ± 10% from median
• Cost of debt: Below median for more than 10%
• Fixed rate debt %: ± 10% from median
• Unsecured debt %: ± 10% from median
• WADM: ± 10% from median
• Highest debt maturity within 5 years: Below median for more than 20%; Falls in FY24/25
• Interest coverage ratio: Above median for more than 10%

Diversification Profile

• Top geographical contribution: Above median for more than 20%
• Top property contribution: Above median for more than 20%
• Top 5 properties' contribution: Above median for more than 20%
• Top tenant contribution: Below median for more than 20% 
• Top 10 tenants' contribution: Below median for more than 20%

Key Financial Metrics

• Property yield: Below median for more than 10%
• Management fees over distribution: Below median for more than 20%; $8.93 distribution for every dollar paid 
• Distribution on capital: ± 10% from median
• Distribution margin: Above median for more than 20%

Trends

• Uptrend: DPU, NAV per Unit
• Slight Uptrend: Distribution Margin
• Flat: Interest Coverage Ratio
• Slight Downtrend: Occupancy
• Downtrend: Property Yield, Distribution on Capital

Relative Valuation

• Current 52 Weeks Range: 6.2%
• P/NAV: Below -2SD for 1y, 3y & 5y
• Dividend Yield: Above +2SD for 1y, 3y & 5y

Author's Opinion

Favorable	Less Favorable
Diversified Sector	Short WALE
High REIT Sponsor's Shareholding	High Top Geographical Contribution
High REIT Manager's Shareholding	High Top Property & Top 5 Properties Contributions
Low Cost of Debt	Low Property Yield
Well Spread Debt Maturity	Property Yield Downtrend
High Interest Coverage Ratio	Distribution on Capital Downtrend
Low Top Tenant & Top 10 Tenants Contributions
Competitive Management Fees
High Distribution Margin
DPU Uptrend
NAV per Unit Uptrend

The main revenue driver - MBC and VivoCity have seen improvement yoy with positive rental reversion in 1H. However, the performance of Festival Walk is still sluggish with a relatively higher negative rental reversion. Starting next quarter, MPACT would adopt quarterly reporting as well as distribution. 

You could also refer below for more information:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and Detail of Singapore REIT

REIT Analysis - List of previous REIT analysis posts

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*Disclaimer: Materials in this blog are based on my research and opinion which I don't guarantee accuracy, completeness, and reliability. It should not be taken as financial advice or a statement of fact. I shall not be held liable for errors, omissions and loss or damage as a result of the use of the material in this blog. Under no circumstances does the information presented on this blog represent a buy, sell, or hold recommendation on any security, please always do your own due diligence before any decision is made.