Mapletree Pan Asia Commercial Trust

Analysts Upbeat On Mapletree Pan Asia Commercial Trust

SINGAPORE – Jonathan Koh, an analyst with UOB Kay Hian, is bullish on the prospects of Mapletree Pan Asia Commercial Trust (MPACT), reported The Edge on Wednesday morning (9 November, SGT).

In fact, he maintained his “buy” call on the Singapore-listed real estate investment trust (REIT). However, Koh reduced his target price from S$2.07 to S$2.

The analyst attributes his optimism to MPACT’s latest financial results, with both its gross revenue and net property income (NPI) jumping by 44.9 percent year-on-year during the 1st half of financial year 2023 (H1 FY2023).

The surge in revenue and NPI was propelled by VivoCity and Mapletree Business City (MBC), alongside the merger with Mapletree North Asia Commercial Trust (MNACT) that was concluded on 21 July. Koh said the merger resulted in greater geographical diversification and the REIT doubled its size.

Moreover, MPACT recorded positive rental reversions from its commercial properties in Singapore, China, and South Korea during H1 FY2023.

Koh also underscored that Singapore’s office sector remains on an upward trajectory, driven by relatively limited office stock and the country’s moderate economic growth.

Mapletree Business City is also expected to continue performing well. “There is a large supply of business park space of 3.2 million sq ft during 2022 to 2024, but the fringe sub-market where MBC is located is not affected. Half of the new supply is purpose-built or caters to specialised industries,” Koh explained.

However, MPACT will be affected by higher power costs for its Singapore assets come 2H FY2023. The new supply contract for electricity commences in November, raising power costs by around 40 percent.

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