Mapletree Pan Asia Commercial Trust (MPACT) N2IU has declared 9.1% lower distribution per unit (DPU) y-o-y of 2.20 cents for 3QFY2024 ended Dec 31, 2023, tempered by rate hikes and the absence of a one-off gain.
However, the REIT recorded y-o-y gains in gross revenue and net property income (NPI) for the quarter, which improved by 0.8% y-o-y to $241.6 million and 1.7% y-o-y to $182.4 million, respectively.
Despite broad forex challenges, growth was primarily driven by Singapore’s robust performance, which delivered positive contributions after fully offsetting higher utility expenses.
Hong Kong and Japan further showed resilience by delivering steady earnings in local currency terms. However, MPACT’s overall overseas contributions were dampened by a stronger Singdollar.
Finance costs during the quarter increased by 14.1% y-o-y to $57.4 million.
Sharon Lim, CEO of the manager, says: “We are proud to continue to post gains in gross revenue and NPI. This reflects our resilience and operational effectiveness in an era of challenging external factors, including higher utility costs and adverse forex movements.”
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As at Dec 31, 2023, portfolio committed occupancy was 96.7%, while weighted average lease expiry (WALE) for MPACT’s retail and office/business park leases was 2.2 years and 2.8 years respectively, translating into an overall portfolio WALE of 2.5 years.
In the first three quarters of its FY2024, MPACT renewed and re-let approximately 1.9 million sq ft of lettable area, pushing portfolio rental reversion higher to 4.1%. The REIT’s manager says there was continued success in backfilling mTower to 98.6% while Festival Walk remained 100.0% committed.
MPACT’s Singapore properties stood out with significant rental uplifts ranging from 6.7% at Mapletree Business City to 14.2% at VivoCity.
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The REIT’s manager says it has proactively navigated the unpredictable interest rate landscape by swapping more Hong Kong Dollar (HKD) loans into offshore Chinese Yuan (CNH). This further reduced the HKD component from 27% to 23% and increased the CNH component from 4% to 7% of the total debt.
The continued adjustment this quarter better aligned MPACT’s debt with the asset under management profile, yielding risk management and interest rate benefits, while the REIT’s fixed rate debt proportion was also raised from 79.9% to 85.0%.
To mitigate forex volatilities, approximately 94% of MPACT’s expected distributable income (based on rolling four quarters) was derived from or hedged into Singdollar. No more than 21% of the REIT’s debt will expire in any financial year.
As at end-December last year, MPACT’s gearing was 40.8%, while its net asset value per unit stood at $1.79.
Lim says MPACT will concentrate on managing our assets and operations effectively as it confronts broader headwinds. “Our commitment to agile asset and prudent capital management remains firm, as it is pivotal in maintaining healthy occupancy levels and steady rental income, positioning MPACT to seize opportunities as they arise.”
Units in Mapletree Pan Asia Commercial Trust N2IU closed 2 cents lower or 1.40% down at $1.41 on Jan 29.
