Mapletree Pan Asia Commercial Trust Q1 FY2024 Results: DPU Falls 13%

August 1, 2023

Mapletree Pan Asia Commercial Trust VivoCity

All the big REITs in Singapore are now coming out with their quarterly numbers. Singapore dividend investors are keeping a close eye on them given the rising interest rate environment and fears of a global recession.

With the other two Mapletree REITs having reported last week, on Monday (31 July) it was the turn of Mapletree Pan Asia Commercial Trust (SGX: N2IU) to report its Q1 FY2024 earnings (for the three months ending 30 June 2023).

Also known as MPACT, the Singapore REIT is a constituent member of the Straits Times Index (STI).

MPACT has 18 commercial and retail properties across Singapore, Hong Kong, Mainland China, Japan, and South Korea.

It’s probably best known for being the owner of the massive VivoCity shopping mall at Harbourfront in Singapore.

So, here’s what S-REIT and dividend investors should know about MPACT’s latest earnings.

MPACT’s DPU falls both year-on-year and sequentially

While revenue and net property income (NPI) were both up significantly year-on-year – mainly as a result of the merger between Mapletree Commercial Trust and Mapleree North Asia Commercial Trust – MPACT’s distribution per unit (DPU), or dividend, actually fell.

The REIT announced a DPU for Q1 FY2024 of 2.18 Singapore cents. This DPU figure was down 12.8% on a year-on-year basis and was also down 3.1% from Q4 FY2023.

Management attributed this to higher net finance costs – from higher interest rates – as well as a full-quarter impact of higher utility costs.

However, on a quarter-on-quarter basis, MPACT’s NPI in Q1 FY2024 was up 1.0% to S$179.2 million.

This came mainly from improved gross revenue from all markets, bar Japan, with particular strength seen in its Singapore properties.

Diverging fortunes between VivoCity and Festival Walk

Overall committed occupancy for MPACT was 95.7%, up marginally from the 95.4% seen as of 31 March 2023.

Meanwhile, rental reversions were positive at +2.4% for the period. This did mask some big differences, though.

For MPACT, its reliance on two big assets – VivoCity and Hong Kong-based shopping and office centre Festival Walk – has an outsized impact on its performance.

The two properties alone accounted for over 40% of MPACT’s overall NPI in Q1 FY2024.

There has been ongoing weakness at Festival Walk so, while it did see an improvement in its latest quarter, the negative rental reversions seen there are in stark contrast to the strength of rental reversions at VivoCity (see below).

MPACT VivoCity Festival Walk rental reversions

Source: Mapletree Pan Asia Commercial Trust Q1 FY2024 earnings presentation

Shopper traffic at Festival Walk did improve by 18.2% year-on-year in the latest quarter but it’s still about 20% below the pre-Covid and pre-protest levels seen in Q1 FY2019.

Watch MPACT’s gearing

It was a relatively unsurprising quarter for the large retail and commercial REIT. While VivoCity performed strongly, it was offset by continued weakness at Festival Walk.

However, this could be bottoming out as Hong Kong is back to being fully open.

One thing investors should take note of is MPACT’s gearing ratio, which is at 40.7%. While this was down from 40.9% as of the end of March 2023, it’s still relatively high versus other large cap REITs in Singapore.

The REIT’s weighted average all-in cost of debt also rose substantially from 2.68% as of Q4 FY2023 to 3.17% in Q1 FY2024.

MPACT is back to paying a quarterly dividend and will pay the 2.18 Singapore cents quarterly DPU to shareholders on record as of 8 August, with the payment date being 14 September.

Currently, MPACT is offering dividend investors a forward 12-month distribution yield of 5.3%.


Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips doesn’t own shares of any companies mentioned.

Tim Phillips

Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.

He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.

In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.

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