Mapletree Pan Asia Commercial Trust - OCBC Investment 2023-05-02: Clear Signs Of Recovery

• Mapletree Pan Asia Commercial Trust (SGX:N2IU)’s 4QFY23 (Jan to Mar 2023) results fell slightly short of our expectations. Gross revenue and net property income (NPI) surged 85.9% and 82.2% y-o-y to S$233.3m and S$177.4m, respectively. This was driven by a full quarter contribution from properties acquired through the merger and improved performance from all its Singapore properties.
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• For FY23, Mapletree Pan Asia Commercial Trust’s NPI jumped 62.6% y-o-y to S$631.9m, while DPU was up 0.8% to S$0.0961 (or +6.1% excluding the release of retained income in FY22) and constituted 97.9% of our forecast.

Portfolio committed occupancy stable at 95.4%; rental reversions of +0.7% driven by assets outside of Greater China

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• On the rental front, overall FY23 portfolio rental reversions came in at +0.7% (9MFY23: -0.3%), with all markets registering rental uplifts except for Greater China. Festival Walk’s rental reversions stood at -12.7%, but the magnitude of decline has narrowed as compared to FY22 (-27%) and FY21 (-21%). Management pointed out that there was still ~15% of leases at the mall which were signed before the pandemic, and hence renewal of these leases in FY24 would still result in negative rental reversions.
• Tenants’ sales recovered firmly for both Festival Walk and VivoCity, at +65.6% and +10.2% y-o-y, respectively, for 4QFY23, and +9.3% and +30.6% for FY23, respectively.

Portfolio valuation declined due largely to FX and Greater China properties

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-05-02 SGinvestors.io

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