Long time readers will know that one of the first articles I wrote on FH was titled “Why I plan to never sell Mapletree Commercial Trust”.
Well, there’s a lesson in there to never say never in investing.
Because yes if Mapletree Commercial Trust had stayed as Mapletree Commercial Trust we wouldn’t be having this discussion today.
But as fate would have it, Mapletree Commercial Trust bought over Mapletree North Asia Commercial Trust to create today’s Mapletree Pan Asia Commercial Trust (MPACT).
And boy… things have only gone downhill since then.
2Q Financial Results for MPACT are a disaster – DPU down 11.6%
Let’s not mince words.
MPACT’s 2Q financial results is nothing short of an unmitigated disaster.
DPU is down 11.6% on a year on year basis.
Yes if you strip out one-offs from a property tax refund the DPU is down 9.6%, but hey that is still a disaster.
Why are things so bad?
It comes down to 2 reasons.
First – the overseas portfolio is underperforming (which we already knew and is not new).
But whereas previously this was mainly limited to the Hong Kong Festival Walk and the China properties, this has not spread to the Japan properties.
And to make things worse – some of the Singapore properties, in particular Mapletree Business City, is starting to show some weakness.
Let’s discuss each.
MPACT’s Overseas portfolio is underperforming
This one should come as no surprise, as it has already been the case for a while.
But the overseas portfolio that MPACT acquired from MNACT (used to be Mapletree Greater China Commercial Trust a long time ago) is not doing great.
You can see the revenue and net property income (NPI) numbers below.
For Hong Kong’s Festival Walk, the worst looks to be
