Mapletree Pan Asia Commercial Trust Earnings: Portfolio Metrics Improving; Risks From China Remain

Mapletree Pan Asia Commercial Trust’s first-quarter fiscal 2024 (ending March) net property income grew 1% quarter on quarter to SGD 179.2 million on the back of 1.6% quarter-on-quarter revenue growth. These are largely driven by higher contributions from Mapletree Business City and VivoCity, offset by increased utility costs. However, distribution per unit fell 3.1% quarter on quarter to SGD 0.0218 due to higher borrowing costs. The results are largely in line with our expectations and we retain our fair value estimate of SGD 1.82. We think the trust is fairly valued at current prices, trading at a fiscal 2024 dividend yield of 5.3%. Within the sector, we prefer Keppel REIT, which is trading at a more attractive 2023 dividend yield of 6.6%, underpinned by its high-quality grade-A office assets and exceptional tenants register.