Singapore now drives two-thirds of MPACT's NPI as VivoCity compounds quietly at +7.6% — but overseas reversions are bleeding and Moody's drops the trust a notch to Baa2

Mapletree Pan Asia Commercial Trust (MPACT) on Tuesday 28 April reported a 4Q FY25/26 DPU of 1.90 Singapore cents, down 2.6% year-on-year, on an S$8.3M one-off tax charge from the Festival Walk Tower divestment that completed on 2 February 2026. Full-year FY25/26 (year ended 31 March 2026) DPU of 7.97 cents was 0.6% lower than FY24/25's 8.02 cents. Excluding the tax charge, 4Q DPU would have been 2.04 cents (+4.6% YoY) and FY DPU 8.11 cents (+1.1% YoY). Reported gross revenue and NPI were 5.5% and 5.9% lower for the quarter, and 4.6% and 4.3% lower for the full year. Aggregate leverage improved to 36.5% from 37.7%, weighted average all-in cost of debt fell to 3.16% from 3.51%, and ICR strengthened to 3.2 times from 2.8 times. NAV per unit S$1.73 (vs S$1.78). Three divestments were completed during FY25/26 — TS Ikebukuro and ABAS Shin-Yokohama in August 2025, and Festival Walk Tower in February 2026 at HKD1.96B (S$328.1M) — with net proceeds deployed towards debt reduction. Singapore now contributes 61% of AUM and 66% of NPI, up from 60% pre-divestments, anchoring the manager's stated 'reshaped for resilience' framing.

4Q FY25/26 Gross Revenue S$210.7M (-5.5% YoY); NPI S$159.6M (-5.9% YoY); Finance Expenses S$42.4M (-17.9% YoY, an improvement); Distributable Income S$100.2M (-3.3% YoY); DPU 1.90 cents (-2.6% YoY). FY25/26 Gross Revenue S$867.3M (-4.6% YoY); NPI S$654.4M (-4.3% YoY); Finance Expenses S$186.8M (-15.3% YoY, an improvement); Distributable Income S$421.4M (-0.4% YoY); DPU 7.97 cents (-0.6% YoY). Singapore Gross Revenue and NPI on a comparable basis (excluding Mapletree Anson, divested 31 July 2024) up 2.3% and 4.1% YoY respectively for the full year. Portfolio committed occupancy 89.4% (vs 89.6% prior year). Portfolio WALE 2.4 years (Retail 1.8 years, Office/Business Park 2.9 years). Aggregate leverage 36.5% (vs 37.3% at 31 December 2025 and 37.7% at 31 March 2025). Weighted average all-in cost of debt 3.16% (vs 3.20% at 31 December 2025 and 3.51% at 31 March 2025). ICR 3.2x trailing 12 months (vs 3.1x and 2.8x). Fixed-rate debt share 75.1%. Distributable income hedged into SGD ~95% on rolling four-quarter basis. Total gross debt S$5.7B; available liquidity ~S$0.9B. Average term to maturity 3.0 years; no single financial year facing more than 23% of debt refinancing. Total portfolio valuation S$15.2B (-2.1% YoY); excluding FX impact (-S$301.1M from stronger SGD vs HKD/JPY/KRW), total portfolio valuation broadly stable at -0.2%. Singapore valuation +S$278M (+3.1%); overseas operational valuation decline -S$301.7M; FX impact -S$301.1M. NAV per unit S$1.73 (vs S$1.78 prior year); ex-FX NAV per unit would have been S$1.75. Moody's corporate rating Baa2 (negative) at FY25/26, downgraded one notch from Baa1 (negative) at FY24/25. Sharon Lim, CEO of the Manager, stated that 'FY25/26 was a year of deliberate reshaping' — describing the three divestments, debt reduction and cost management as having made MPACT 'more resilient than it was a year ago,' with Singapore now contributing 66% of NPI 'reflecting our focus on quality assets in our core market.'

1. THE RESHAPING IS REAL BUT THE OPERATING ENGINE INSIDE THE NEW SHAPE IS BIFURCATED — SINGAPORE GROWING SOLIDLY, OVERSEAS REVERSIONS ACROSS HK / CHINA / JAPAN ARE DEEPENING:

The manager's 'reshaped for resilience' framing is structurally accurate at the balance-sheet level — three divestments completed at S$1.1B+ aggregate, gearing down 120bps, cost of debt down 35bps, ICR up 40bps, Singapore weighting up to 66% of NPI from 60%. But the operating engine inside the reshaped portfolio is pulling in opposite directions across geographies, and the reported numbers actually understate how stark the divergence has become. Singapore on a comparable basis (ex-Mapletree Anson) delivered FY25/26 NPI growth of +4.1%, anchored by VivoCity (NPI +7.6% FY, +6.4% 4Q) and supported by Other Singapore Properties (rental reversion +5.6%) and the Mapletree Business City cornerstone holding firm at 96.4% occupancy with another top-ten tenant renewed in 4Q. The Singapore valuation uplift was +S$278M (+3.1%). Overseas, by contrast, full-year rental reversions read negative across every market the trust holds: Festival Walk Hong Kong -10.8%, China properties (Gateway Plaza + Sandhill Plaza) -21.3%, Japan properties -3.1%. The China figure is the standout — twenty-one percent below expiring rents on a 215,666 sq ft volume, with Gateway Plaza in Beijing's Lufthansa submarket continuing to face cost-conscious occupiers shifting to surrounding submarkets. Festival Walk's -10.8% reversion was secured at 100% committed occupancy — that is, the manager retained the tenants but at materially lower rents, which reads as a deliberate prioritisation of occupancy over headline rents. Japan's reported committed occupancy of 75.1% at FY-end masks the post-31-March reality: Fujitsu Limited's lease at Fujitsu Makuhari Building expired on 31 March 2026, leaving Japan's like-for-like occupancy at 57.1% on 1 April. The Pinnacle Gangnam South Korea is the bright overseas spot — reversion +51.3% off a high base, occupancy 99.9% — but it represents only 1% of AUM. The reported portfolio valuation decline of -2.1% reads worse than the underlying because FX did much of the damage: -S$301.1M of the -S$324.9M total decline was the SGD strengthening against HKD, JPY and KRW. Ex-FX, total portfolio valuation was broadly stable at -0.2%. The reshaping has reduced overseas exposure to 39% of AUM and 34% of NPI; the question for FY26/27 is whether overseas operating headwinds stop deepening or whether further divestments will be required to insulate the trust from continued reversion pressure. The manager's own outlook language — 'portfolio optimisation efforts will continue as the Manager sharpens focus on quality assets' — reads as preparation for further disposals, particularly in Greater China and Japan-Makuhari.

2. VIVOCITY IS THE DISPROPORTIONATE VALUE DRIVER AND THE AEI PLAYBOOK IS NOW BEING EXPORTED TO FESTIVAL WALK ON A FRACTION OF THE CAPEX:

VivoCity at 31 March 2026 was valued at S$4.062B — 27% of MPACT's S$15.2B AUM, 29% of FY25/26 portfolio NPI, and the single asset doing the work that the rest of the SG-anchored cornerstone book cannot. FY25/26 metrics: NPI +7.6% YoY (4Q +6.4%), rental reversion +14.1% across 154,233 sq ft of leases, committed occupancy 99.7%, tenant sales S$1.094B (+3.7% YoY), shopper traffic 45.4 million (+3.6% YoY), valuation +5.4% YoY (+S$207M). The Basement 2 AEI was completed in phases through 3Q FY25/26 at approximately S$43M of capital expenditure, with Phase 2's carpark-to-retail conversion adding 14,000 sq ft of retail lettable area. Stabilised return on investment is over 10%. The new and refreshed tenant lineup tells the demand story specifically: Din Tai Fung, A&W's ninth Singapore outlet, Birds of Paradise gelato, Ya Kun, plus refreshed concepts at Kopitiam, Paradise Hotpot (the long-standing Beauty In The Pot reinvented), MINISO, and new-to-mall fashion (Andar Korean athleisure, Lovet, Natureland Spa, the experiential SPLATTIFY studio). The Year-of-the-Horse Chinese New Year programming added engagement layer — TANGS CNY Fair with 45 brands, a 20-lion dance performance, Fu-Lu-Shou mascot appearances, large-scale outdoor plaza installations. Forward catalyst: VivoCity benefits from the upcoming direct connectivity to Marina Bay MRT scheduled for completion in 2026, plus the Greater Southern Waterfront master plan rollout under URA Master Plan 2019. The same AEI playbook is now being deployed at Festival Walk on a much smaller capex base. An 18,800 sq ft single-tenant cluster across three floors (UG, L1, L2) is being reconfigured into six concepts — a mix of new lifestyle (Fortress, Rituals) and four new F&B operators including Golden Dragon Sizzler Restaurant. Capital expenditure is approximately HKD5.3M (S$0.9M equivalent), with a projected stabilised ROI of close to 50%. Completion expected in 2Q FY26/27. The smaller HKD capex relative to S$43M at VivoCity is partly a function of the harder Hong Kong retail environment but also the math of the percentage ROI — a smaller revenue base with smaller capex can produce a higher percentage return on a smaller absolute number. The strategic question is whether the AEI lift translates at Festival Walk the way it has at VivoCity: VivoCity's reversions were already +14.1% pre-AEI in a strong tenant-sales environment (+3.7% FY); Festival Walk's reversions were -10.8% pre-AEI in a 4Q tenant-sales recovery driven specifically by 'spending on higher-value luxury items' (manager's framing). The AEI is the right intervention; whether HK retail can carry the post-AEI uplift the way SG retail has is the open question for FY26/27 and FY27/28.

3. THE FY26/27 OPTICAL DPU RECOVERY IS MECHANICAL — BUT THE UNDERLYING ENGINE RECOVERY NEEDS OVERSEAS REVERSIONS TO STOP DEEPENING, AND MOODY'S DOWNGRADE TO BAA2 SIGNALS THE RATING-AGENCY VIEW THAT THE RESHAPING HAS NOT YET FULLY STABILISED THE CREDIT PROFILE:

Reported FY25/26 DPU of 7.97 cents was 0.6% below the 8.02 cents of FY24/25; ex the S$8.3M one-off tax charge it would have been 8.11 cents (+1.1%). For FY26/27, the optical recovery is partly mechanical — the one-off tax charge clears, finance expense compression continues into a full-year run-rate (the 3.16% trailing 12-month cost of debt is below the FY25/26 weighted average), and reduced borrowings post-divestment reduce absolute interest cost — but four operational headwinds counter the mechanical lift. First, Fujitsu Makuhari's full-year vacancy lands in FY26/27: Japan committed occupancy resets from 75.1% reported to 57.1% like-for-like on 1 April, taking out a single-tenant building's NPI contribution until backfilled. Second, China rental reversions are guided to remain pressured: -21.3% in FY25/26 was secured at 83.9% portfolio occupancy, and the deck flags 'continued downward pressure on rents for the remainder of 2026' as new supply (1.5M sqm in 2026 alone, c.49% of the three-year pipeline) lands in Beijing. Third, Hong Kong Kowloon East faces 1.4M sq ft of new retail supply in 2026 from four major developments — direct competitive pressure on Festival Walk's catchment, particularly The Twins Phase 2, Scramble Hill, The KEyPoint, and Cullinan Sky Mall. Fourth, FX pressure — if SGD strength versus HKD, JPY and KRW persists into FY26/27, translation losses continue regardless of underlying property performance. The manager's distribution mechanism is straightforward: MPACT does not deploy a divestment-gain-top-up bridge of the kind CapitaLand Ascott Trust uses through its multi-year AEI tunnel. Headline DPU is the operating-cash-flow number less the mechanical one-off. There is no engineered defensive layer to absorb operational softening — what the engine produces is what unitholders receive. Moody's downgraded MPACT's corporate rating one notch to Baa2 (negative) at FY25/26, from Baa1 (negative) at FY24/25 — a credit signal that is conspicuously absent from the press release narrative. The manager's framing emphasises gearing down to 36.5%, ICR up to 3.2x, cost of debt down to 3.16%; the rating agency view is that across the same period the credit profile net-deteriorated by one notch, with the negative outlook preserved. Both readings are accurate in their respective frames — balance-sheet-ratio improvement is real, but it has not been sufficient to offset the operating-base softening that Moody's is weighing. The cost-of-capital implication is that further refinancings will be priced against the lower rating; the structural offset is the strong distributable-income hedge structure and the ample debt headroom (c.S$2B+ to the 50% MAS aggregate leverage cap). The watch-item for the next four quarters is whether overseas reversions stabilise in the -5% to -10% band (allowing the AEI exports to do their work) or whether the -21.3% China benchmark deepens further, in which case MPACT's reshaping will look like the first phase of a multi-year disposal programme rather than a completed restructuring.

At MPACT's FY25/26 reference close of S$1.32 on 31 March 2026, the trust delivered 12.0% total return for the year — capital appreciation of 5.6% (S$1.25 → S$1.32) plus distributions paid out of 6.4%. Since IPO (April 2011 at S$0.88), total return is 190.4%, comprising 50.0% capital appreciation and 140.4% distributions. By 27 April 2026 (the trading day immediately preceding results), units had re-rated approximately 6% from the FY-end reference to close at S$1.40 within a S$1.39–1.41 day range, suggesting some of the deleveraging-and-reshaping narrative was already being priced in by results day. At S$1.40 close, the trailing FY25/26 DPU of 7.97 cents implies a yield of 5.69%; market capitalisation at 5,284M units in issue is approximately S$7.4B. NAV per unit S$1.73 implies P/NAV of 0.81x at S$1.40, in line with Pan-Asia commercial REIT peer set. Aggregate leverage 36.5% leaves c.13.5pp of headroom to the 50% MAS limit; debt headroom roughly S$2B+ at 50% gearing. Cash and undrawn committed facilities total S$0.9B. Top-ten tenants contribute 21.4% of gross rental income, anchored by Google Asia Pacific at MBC (6.2%), BMW at Gateway Plaza (3.3%), and Merrill Lynch Global Services at BOAHF (2.0%). Trade-mix diversification across F&B (17.2%), IT Services & Consultancy (14.3%), Fashion (7.8%) and Banking & Financial Services (6.2%). The 4Q FY25/26 distribution of 1.90 cents per unit will be paid on Wednesday 17 June 2026 to unitholders on record as at 5.00 p.m. Thursday 7 May 2026; ex-date 9.00 a.m. Wednesday 6 May 2026.

MPACT FY25/26 is the year the reshaping landed: three divestments completed at S$1.1B+ aggregate, proceeds deployed to debt, gearing 36.5% from 37.7%, cost of debt 3.16% from 3.51%, ICR 3.2x from 2.8x, Singapore weighting up to 66% of NPI from 60%. The manager's 'reshaped for resilience' framing is structurally accurate. But the operating engine inside the reshaped portfolio is bifurcated: Singapore +4.1% NPI on comparable basis anchored by VivoCity at +7.6% NPI / +14.1% reversion / +5.4% valuation; overseas reversions at -10.8% (Festival Walk), -21.3% (China), -3.1% (Japan); Fujitsu Makuhari single-tenant departure leaves Japan at 57.1% like-for-like occupancy from 1 April; Moody's downgraded one notch to Baa2 (negative). Reported DPU 7.97 cents down 0.6%; ex-S$8.3M tax charge it would have been 8.11 cents (+1.1%). For FY26/27 the optical recovery is partly mechanical (one-off clears, finance expense compression continues) but the underlying engine recovery requires overseas reversions to stop deepening — a watch-item rather than a base case. VivoCity is the disproportionate value driver — 27% AUM, 29% NPI, +7.6% growth, S$43M Basement 2 AEI delivering >10% ROI, Marina Bay MRT connectivity inbound 2026 — and the AEI template is being exported to Festival Walk on HKD5.3M capex targeting close to 50% projected ROI, completion 2Q FY26/27. The investment case is increasingly: own MPACT for the SG anchor and the VivoCity engine, accept the overseas operating drag as the cost of geographic diversification, watch the AEI ROI conversion in Hong Kong as the leading indicator for whether the reshaping is complete or ongoing, and watch the China rental-reversion trajectory as the leading indicator for whether further disposals are needed.