Mapletree Pan Asia Commercial Trust DPU Falls 7.3%, Income Jumps Post-Merger

Mapletree Pan Asia Commercial Trust said its distribution per unit fell 7.3 percent in the fiscal year to the end of March, squeezed by higher interest rates, but net property income jumped 15.2 percent on the post-merger expansion of the REIT’s portfolio.

Singapore-listed MPACT, created in 2022 when Mapletree Commercial Trust bought out Mapletree North Asia Commercial Trust, saw DPU rise 1.8 percent year-on-year in the fiscal fourth quarter as NPI climbed 3.2 percent to S$183.1 million ($134.5 million), the REIT’s manager said Wednesday in a release.

The manager attributed the quarterly result to a solid performance from the $12 billion trust’s Singapore assets and a stable contribution from the Festival Walk mall in Hong Kong.

“MPACT has maintained its course amidst a tough operating landscape,” said Sharon Lim, CEO of the manager.

Rental Uplifts

During the fiscal year, MPACT renewed and re-let 2.6 million square feet (241,548 square metres) of lettable area, marking a portfolio rental reversion of 2.9 percent — up from 0.7 percent in the previous year.

“The Singapore portfolio stood out with notable rental uplifts from 6.7 percent at Mapletree Business City to 14 percent at VivoCity,” the manager said.

The portfolio’s committed occupancy stood at 96.1 percent as of 31 March 2024, up from 95.4 percent a year earlier, largely stemming from success in backfilling mTower in Singapore’s Queenstown area. The portfolio tenant retention rate was 72.5 percent.

A valuation decline in overseas properties was largely due to a stronger Singapore dollar against all foreign currencies.

“Notably, the operational valuation impact of the overseas assets accounted for a minor portion of the total variance,” the manager said. “This was mainly due to revised market expectations for China and specific adjustments for SII Makuhari Building.”

Bumpy Road

In May 2022, shareholders of Mapletree Commercial Trust and Mapletree North Asia Commercial Trust approved a S$4.2 billion ($3 billion) merger to create the Singapore Exchange’s third-largest REIT.

In the months leading to the approval, the proposed combination had faced hurdles including criticism from activist investor Quarz Capital Management, which labelled the merger scheme “opportunistic” and called for rejection of the deal.

Today the merged MPACT comprises 18 commercial properties across Singapore, Hong Kong, mainland China, Japan and South Korea with a total lettable area of 11.2 million square feet.