Mapletree Pan Asia Commercial Trust Earnings: Near-Term Challenges Priced In, Units Attractive

No-moat Mapletree Pan Asia Commercial Trust’s, or MPACT’s, third-quarter fiscal 2024 (year ends in March) results were in line with our expectations. Net property income rose 1.7% year on year, driven by better performance from its Singapore properties, partly offset by currency headwinds due to the strong Singapore dollar. Distribution per unit fell 9.1% year on year due to higher interest costs and the absence of the one-off gain from the cross-currency interest-rate swap. With no major surprises, we leave our assumptions unchanged and retain our fair value estimate of SGD 1.74. We believe concerns over the trust’s China portfolio, and the upcoming office supply in the Labrador submarket adding competition to the trust’s Mapletree Business City and mTower, have been priced in by the market. Accordingly, we think the trust is currently undervalued and investors should start accumulating MPACT.