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Monday, August 14, 2023

Mapletree Pan Asia Commercial Trust Review @ 14 Aug 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 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. DPU has declined YoY due to higher property expenses, higher interest costs, stronger SGD against foreign currencies and an enlarged unitholder base as a result of the merger.

Rental Reversion
Overall rental reversion stands at 2.4%. Besides Festival Walk and China properties, rental reversion is positive for properties in other countries.

Shopper Traffic & Tenant Sales

For VivoCity, both shopper traffic and tenant sales have improved YoY, with the tenant sales surpassed the pre-COVID level by 20% despite shopper traffic at only 84% of the pre-COVID level. As for Festival Walk, both shopper traffic and tenant sales have improved as well. However, both are still lower than pre-social incident and pre-COVID levels. 

Asset Enhancement Initiative

AEI for VivoCity has completed and opened in May 2023.

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: ± 10% from median

Lease Profile

  • Committed 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 10% 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 FY25/26
  • 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; $8.93 distribution for every dollar paid 
  • Operating Distributable Income on Capital: Below median by 10% or more
  • Operating Distributable Income Margin: Above median by 10% or more
  • Operating Distribution Proportion: Above median by 5% or more

DPU Breakdown

  • TTM DPU Breakdown
    • 95.7% from Operation
    • 4.3% from Management Fees Paid in Units
  • TTM DPU = 99.9% of Distributable Income


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

Relative Valuation

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

Author's Opinion

 Favorable Less Favorable
Diversified SectorLow Income in SGD/Major Currencies
High REIT Sponsor's ShareholdingShort WALE
High REIT Manager's ShareholdingHigh Top Property & Top 5 Properties' Contributions
Low Cost of DebtLow Property Yield
Well Spread Debt MaturityLow Operating Distributable Income on Capital
Low Top Tenant & Top 10 Tenants' ContributionsInterest Coverage Ratio Downtrend
Competitive Management FeesProperty Yield Downtrend
High Operating Distributable Income MarginOperating Distributable Income on Capital Downtrend
High Operating Distribution ProportionOperating Distributable Income Margin Downtrend
DPU from Operation Uptrend 
NAV per Unit Uptrend

Compared to the previous quarter, gross revenue and NPI have improved. However, distributable income has slightly declined due to higher finance expenses and a lower amount of net effect from other non-tax deductible items and adjustments (without a detailed breakdown). For the following 9 fiscal months, only 6% of debt requires refinancing. Additionally, with the moderate fixed rate debt proportion at 74%, the near-term increase in finance expenses should be minimal.

Festival Walk continues to experience a negative rental reversion, although the rate has reduced to single-digit negative figures this quarter. Nonetheless, with the ongoing recovery in Hong Kong visitors' arrivals, the performance is expected to be gradually improved moving forward.

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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