In his Aug 3 report, Guha notes that MPACT has had a slow start to the year. Excluding the merger with its sister REIT, the trust’s revenue and net property income (NPI) for 1QFY2024 ended June rose 4.1% and 0.3% y-o-y respectively.

The lower NPI growth was the result of higher operating expenses due to utilities. To this end, Guha notes that borrowing cost rose 64 basis points y-o-y to 3.17%, negating the steady operations. He adds that the guidance is for further rise as swaps reprice.

“Coupled with depreciation of Renminbi and Japanese Yen against Singapore dollar and a larger base of units, distribution per unit (DPU) fell 3.1% q-o-q or 12.8% y-o-y,” he adds.

MPACT’s portfolio occupancy inched up by 30 basis points to 95.7% from the previous quarter, largely due to higher occupancy at mTower at Alexandra Road.

Meanwhile, all markets except Greater China recorded positive rental uplifts, contributing to a portfolio rental reversion of 2.4%.

<span class='see_also_inread'><b>See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='/capital/brokers-calls/rhb-pegs-isoteams-tp-5-cents-after-rights-issuance?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>RHB pegs ISOTeam’s TP at 5 cents after rights issuance</a></b></span>

MPACT’s core assets saw strong rental uplifts, ranging from 7.1% at Mapletree Business City to 12.3% at VivoCity, with the latter recording a 3.7% increase in tenant sales y-o-y.

Although Festival Walk in Hong Kong saw tenant sales growth of 12.1%, rents had a negative reversion of 9.4%, Guha highlights.

To reflect lower margins and higher borrowing costs, Guha has lowered his DPU estimates for FY2024 and FY2025 by about 5%.

As at 2.54pm, units in MPACT are trading 2 cents lower or -1.25% down at $1.58.

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