Mapletree Pan Asia Commercial Trust

Q2 FY25/26 distributable income was SGD 106.1 million, up 2.1% YoY, and DPU was SGD 0.0201, up 1.5% YoY. First-half distributable income was SGD 213 million and DPU was SGD 0.0402, down 0.8% and 1.2% YoY, respectively. NAV was SGD 1.75. Gross outstanding borrowings were SGD 6 billion, aggregate leverage was 37.6%, weighted average cost of debt was 3.23% per annum, fixed-rate debt was 77.5%, and liquidity was about SGD 0.9 billion in cash and undrawn committed facilities. On forward commentary, management said the full-year cost of debt should stay around the current 3.23% level, and if all SGD 6 billion repriced today it would be about 50 bps lower, or around 2.7%; China occupancy could decline by about 2% to 4% over the next few quarters, while MBC occupancy could rise toward 95% only likely next FY or later.

The lead executive framed the quarter as supported by Singapore, portfolio optimization and proactive debt reduction, with overseas headwinds cushioned by lower rates. Tone was constructive but cautious: management repeatedly said Hong Kong and China remain challenged, while Singapore and VivoCity are still performing well. She also stressed that acquisitions remain possible, but only if price and asset quality are right and any equity issuance would need to be strongly justified.

The CFO highlighted that Q2 DI of SGD 106.1 million and DPU of SGD 0.0201 were lifted by interest savings from lower Hong Kong dollar and Singapore dollar borrowing costs and lower loan balances after divestment proceeds were used to repay debt. She pointed to first-half DI of SGD 213 million and DPU of SGD 0.0402, with FX depreciation in Hong Kong dollar and renminbi offsetting some of the benefit. On capital management, she cited SGD 6 billion of borrowings, gearing at 37.6%, weighted average cost of debt at 3.23%, fixed-rate debt at 77.5%, average debt maturity of 3.5 years, and about SGD 0.9 billion of liquidity; she also noted the SGD 200 million 7-year green notes at 2.45% and said current full-year cost of debt should remain around today’s level.

Analysts focused on interest cost savings, Festival Walk reversions, China occupancy, Japan divestments, and MBC leasing progress. Management said a full repricing of the SGD 6 billion debt stack today would imply roughly 50 bps lower cost of debt, but that savings would be gradual and the full-year average should stay around 3.23%; they also said Festival Walk reversions remain around plus/minus 10% and Hong Kong retail sentiment is still weak. For China, management warned occupancy could ease 2% to 4% over the next few quarters because leasing activity is seasonally front-loaded, while for MBC they said leasing is progressing but slowly and 95% committed occupancy by year-end would be a stretch.