Mapletree Pan Asia Commercial Trust Review @ 7 February 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 amount available for distribution increased yoy mainly due to the merger with Mapletree North Asia Commercial Trust. DPU on the other hand, remains the same.

Rental Reversion

Overall rental reversion for the YTD FY22/23 is at -0.3%. The rental reversion is mainly being dragged down by Festival Walk in Hong Kong as well as China properties.

Shopper Traffic & Tenant Sales

For VivoCity, tenant sales have surpassed the pre-COVID level despite shopper traffic at only 75% of the pre-COVID level. As for Festival Walk, both shopper traffic and tenant sales are similar to the past year.

Asset Enhancement Initiative

AEI for VivoCity is on track and expected to open progressively from mid this year.

Sensitivity to Interest Rate

For every 0.5% increase in interest, the DPD impact would be 0.14 cent per annum, approx. 1.4%.

Distribution Breakdown

• Distributable Income Breakdown:
• 91.8% from Operation
• 3.8% from Release of Retention/Capital
• 4.4% from Fees Payable/Paid in Units
• Distribution = 100% of Distributable Income
• Distribution to Perpetual Securities Holder = 0.6% of Distributable Income

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: Below median for more than 10%

Lease Profile

• Occupancy: ± 5% from median
• WALE: Below median for more than 20%
• Highest Lease Expiry within 5 Years: Above median for more than 10%; Falls in FY26/27, without breakdown.
• 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 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: ± 10% from median

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%; $9.17 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
• Flat: Interest Coverage Ratio, Distribution Margin
• Slight Downtrend: Occupancy
• Downtrend: Property Yield, Distribution on Capital

Relative Valuation

• P/NAV: Average for 1y; Below average for 3y; Below -1SD for 5y
• Dividend Yield: Average for 1y; Above +1SD for 3y; Above average for 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
Low Top Tenant & Top 10 Tenants' Contributions	Distribution on Capital Downtrend
Competitive Management Fees
High Distribution Margin
DPU Uptrend
NAV per Unit Uptrend

The occupancy rate has decreased slightly from 96.9% in the previous quarter to 95.5%, primarily due to a decline in occupancy at MBC and properties in China.  Although Festival Walk's performance remains sluggish and has high negative rental reversion, the reopening of borders between Hong Kong and China on 8 January is anticipated to improve its performance in the upcoming quarters.

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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.