Mapletree Commercial Trust Faces Mixed Earnings Amid Challenges

Mapletree Commercial Trust ((SG:N2IU)) has held its Q4 earnings call. Read on for the main highlights of the call.

Mapletree Commercial Trust’s recent earnings call painted a mixed picture, with stable contributions from Singapore and improved capital management being overshadowed by significant challenges. The company faced declining revenues, a lower distribution per unit (DPU), and negative rental reversions in its overseas markets, reflecting a cautious sentiment among stakeholders.

Singapore Portfolio Stability

The Singapore properties of Mapletree Commercial Trust showed resilience, with contributions increasing by 1.4% year-on-year, excluding Mapletree Anson. These properties accounted for about 53% of the fourth quarter’s portfolio gross revenue and net property income (NPI), highlighting their critical role in the company’s overall performance.

Improved Capital Management

The company made strides in capital management, reducing its aggregate leverage ratio from 40.5% a year ago to 37.7% as of March 31, 2025. This improvement was largely aided by the divestment of Mapletree Anson, showcasing effective financial strategies in place.

Positive Rental Reversions in Key Segments

Mapletree Commercial Trust reported healthy rental reversions in key Singapore properties such as MBC, VivoCity, and mTower. This positive trend underscores the strength of its domestic market, even as challenges persist elsewhere.

Successful Green Bond Issuance

In a move towards sustainable financing, MPACT successfully issued a seven-year green bond in March 2025. This issuance extended the average term of the maturity of its debt to 3.3 years, reflecting the company’s commitment to long-term financial health and sustainability.

Decline in Overall Revenue and NPI

The fourth quarter saw a decline in gross revenue and NPI by 6.8% and 7.4% year-on-year, respectively. This downturn was primarily due to the absence of contributions from Mapletree Anson and lower overseas contributions, indicating areas that need attention.

DPU Decline

The distribution per unit (DPU) experienced a significant decline, with the amount available for distribution at SGD 103.6 million and a DPU of SGD 0.0195, down 14.8% year-on-year for the fourth quarter. This decline highlights the financial pressures the company is facing.

Challenges in China and Japan

Mapletree Commercial Trust continues to face challenges in China, with weak leasing demand, and in Japan, where non-renewals and valuation declines, particularly in the Makuhari area, have been problematic. These issues point to the difficulties in maintaining stable operations in these regions.

Negative Rental Reversions in Overseas Markets

Overseas markets, including Festival Walk in Hong Kong and properties in China, experienced negative rental reversions due to market pressures. This trend emphasizes the need for strategic adjustments to counteract these adverse conditions.

Forward-Looking Guidance

Looking ahead, Mapletree Pan Asia Commercial Trust (MPACT) highlighted several key financial metrics for the fourth quarter and full fiscal year of 2024-2025. Despite the challenges, the company maintained a financial flex of SGD 1.2 billion in cash and undrawn committed facilities, ensuring sufficient liquidity for its obligations. The overall portfolio valuation rose to approximately SGD 16 billion, and the net asset value (NAV) per unit increased by 1.7% to SGD 1.78, providing a foundation for future growth.

In summary, Mapletree Commercial Trust’s earnings call revealed a company navigating through a complex landscape. While stable contributions from Singapore and improved capital management are positive signs, the challenges in overseas markets and declining financial metrics underscore the need for strategic focus. Stakeholders will be keenly watching how the company addresses these issues moving forward.