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REITs investing & personal finance

Sunday, May 07, 2023

Mapletree Pan Asia Commercial Trust Review @ 7 May 2023

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 and income available for distribution increased YoY due to the merger with Mapletree North Asia Commercial Trust. Excluding the release of distribution retention, DPU remains the same.

Rental Reversion
Overall rental reversion for FY22/23 is at 0.7%. Besides Festival Walk and China properties, rental reversion is positive for all other properties.

Shopper Traffic & Tenant Sales

For VivoCity, tenant sales have surpassed the pre-COVID level BY 15% despite shopper traffic at only 77% of the pre-COVID level. As for Festival Walk, both shopper traffic and tenant sales have improved as compared to the previous year, however, both are still lower than pre-social incident and pre-COVID levels. The good thing is, both shopper traffic and tenant sales have improved after the border opening with mainland China and the lifting of all remaining restrictions in 1Q 2023.

Asset Enhancement Initiative

AEI for VivoCity is ready to open progressively from end-May.

Related Parties Shareholding

  • REIT Sponsor's Shareholding: Above median by 20% or more
  • REIT Manager's Shareholding: Above median by 20% or more
  • Directors of REIT Manager's Shareholding: Below median by 20% or more

Lease Profile

  • Occupancy: ± 5% from median
  • Income in SGD/Major Currencies: Below median by 20% or more
  • WALE: Below Below median by 20% or more
  • Highest Lease Expiry within 5 Years: ± 10% from median; Falls in FY24/25
  • Weighted Average Land Lease Expiry: ± 10% from median

Debt Profile

  • Gearing Ratio: ± 10% from median
  • Gearing including Perps: ± 10% from median
  • Cost of Debt: Below median by 20% or more
  • Fixed Rate Debt %: ± 10% from median
  • Unsecured Debt %: ± 10% from median
  • WADM: ± 10% from median
  • Highest Debt Maturity within 5 Years: Below median by 20% or more; Falls in FY24/25
  • Interest Coverage Ratio: ± 10% from median

Diversification Profile

  • Top Geographical Contribution: ± 10% from median
  • Top Property Contribution: Above median by 20% or more
  • Top 5 Properties' Contribution: Above median by 20% or more
  • Top Tenant Contribution: Below median by 20% or more
  • Top 10 Tenants' Contribution: Below median by 20% or more

Key Financial Metrics

  • Property Yield: Below median by 10% or more
  • Management Fees over Operating Distributable Income: Below median by 20% or more; $8.77 distribution for every dollar paid 
  • Operating Distributable Income on Capital: ± 10% from median
  • Operating Distributable Income Margin: Above median by 10% or more
  • Operating Distribution Proportion: Above median by 5% or more

DPU Breakdown

  • TTM DPU Breakdown
    • 95.6% from Operation
    • 4.4% from Management Fees Paid in Units
  • TTM DPU = 99.8% of Distributable Income


  • Uptrend: DPU from Operation, NAV per Unit
  • Flat: Interest Coverage Ratio
  • Slight Downtrend: Occupancy, Operating Distributable Income Margin
  • Downtrend: Property Yield, Operating Distributable Income on Capital

Relative Valuation

  • P/NAV: Average for 1y; Below -1SD for 3y & 5y
  • Dividend Yield: Average for 1y; Above +1SD for 3y & 5y

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow Directors of REIT Manager's Shareholding
High REIT Sponsor's ShareholdingLow Income in SGD/Major Currencies
High REIT Manager's ShareholdingShort WALE
Low Cost of DebtHigh Top Property & Top 5 Properties' Contributions
Well Spread Debt MaturityLow Property Yield
Low Top Tenant & Top 10 Tenants' ContributionsProperty Yield Downtrend
Competitive Management FeesOperating Distributable Income on Capital Downtrend
High Operating Distributable Income Margin 
High Operating Distribution Proportion 
DPU from Operation Uptrend 
NAV per Unit Uptrend

The gross revenue and NPI have slightly declined as compared to the previous quarter, however, DPU has declined by 7% from 2.42 cents to the current 2.25 cents. To identify the reasons for the decline, first, match the items from the profit and loss statement and distribution statement, and check out the cash flows statement for distribution received from the joint venture.

Next, offset and get the adjusted figures for the profit and loss statement as well as the distribution statement.

Now, we can see the breakdown for the decline of S$ 9.448 mils in distributable income, below are some highlights:

  1. NPI declined by S$ 2.011 mils
  2. Borrowing Cost increased by S$ 0.707 mil
  3. Manager's Fee declined by S$ 0.601 mil
  4. Foreign Exchange Loss increased by S$ 0.79 mil
  5. Tax Expenses declined by S$ 0.553 mil
  6. Realized Gain from Financial Derivatives declined by S$ 9.258 mils
I believe we have found the biggest culprit for the decline, which is the absence of realized gain from financial derivatives in this quarter. However, I am unsure of why there is still a negative S$ 137k for net change in fair value of investment properties, as this is a non-cash item and should normally be offset to zero.

While the rental reversion of MBC and VivoCity is decent, the rental reversion of Festival Walk remains poor at -12.7% for FY22/23. However, the magnitude has reduced from -27% and -21% in FY21/22 and FY20/21 respectively. On a positive note, shopper traffic and tenant sales of Festival Walk have improved since the border with mainland China was reopened and the lifting of restrictions.

For more information, check out:

SREITs Dashboard - Detailed information on individual Singapore REIT

SREITs Data - Overview and details of Singapore REIT

REIT Review - List of previous REIT review posts

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*Disclaimer: The information presented on this blog is for educational and informational purposes only. The materials, including research and opinions, are based solely on my own findings and should not be considered as professional financial advice or a definitive statement of fact. I cannot guarantee the accuracy, completeness, or reliability of the information provided. I shall not be held liable for any errors, omissions, or losses that may occur as a result of using the information presented on this blog. It should be noted that the information presented on this blog does not constitute a buy, sell, or hold recommendation for any security. It is crucial to conduct your own thorough research and due diligence before making any investment decisions.

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