Company Coverage
Mapletree Pan Asia Commercial Trust (MPACT SP): Green Shoots In Hong Kong And Japan
BUY (Maintained)
Current price:
Target price:
Upside:
S$1.21
S$1.71
41.3%
Analyst
Highlights
- Festival Walk recorded the second consecutive quarter of healthy tenant sales growth at 4% yoy with sustained spending on luxury goods in 1QFY27. We expect the negative reversions to gradually moderate due to healthy retail sales boosted by positive wealth effect.
- Strong demand within central Tokyo has spilled over to the Makuhari sub-market. MPACT has initiated discussions with several potential new tenants, including a potential replacement tenant for the entire FMB.
- Singapore remains MPACT's core earnings anchor and contributed 68% of portfolio NPI in 1QFY27. Maintain BUY. Target price: S$1.71.
Analysis
- Modest recovery for Hong Kong’s retail malls. Hong Kong’s retail rental market is gradually recovering, supported by the return of tourist spending, improving leasing demand from Mainland Chinese brands, financial institutions and selected F&B operators. Vacancy rates have declined in key shopping districts, which has translated to modest rental growth. Unfortunately, neighbourhood malls continue to face headwinds from growing northbound spending by Hong Kong residents in Mainland China.
- Benefitting from influx of international students. The Hong Kong government has lifted the policy cap for international student quota at public universities from previous 20% to 40% in academic year 2024/25 and to 50% in academic year 2026/27. The policy liberalisation aims to establish Hong Kong as an education hub. Enrolment for international students has since registered a steady increase. Festival Walk should benefit from increased footfall from undergraduate and graduate students at City University and Baptist University, which are located nearby. Management conscientiously optimises its tenant mix to cater to the preference of youth/students.
- Green shoot of recovery at Festival Walk. Festival Walk recorded tenant sales growth of 4% yoy in 1QFY27, the second consecutive quarter of sustained spending on higher-value luxury goods. Mapletree Pan Asia Commercial Trust (MPACT) has completed the reconfiguration of 18,800sf of space across three floors into a curated mix of F&B, lifestyle, beauty and health concepts. The enhancement has been operational since Jul 26 and generated ROI of close to 50%. Festival Walk incurred negative rental reversion of 9.1% in 1QFY27. We expect the negative reversions to gradually moderate due to healthy retail sales boosted by positive wealth effect from a recovery in residential home prices.
Highlights
- Festival Walk recorded the second consecutive quarter of healthy tenant sales growth at 4% yoy with sustained spending on luxury goods in 1QFY27. We expect the negative reversions to gradually moderate due to healthy retail sales boosted by positive wealth effect.
- Strong demand within central Tokyo has spilled over to the Makuhari sub-market. MPACT has initiated discussions with several potential new tenants, including a potential replacement tenant for the entire FMB.
- Singapore remains MPACT's core earnings anchor and contributed 68% of portfolio NPI in 1QFY27. Maintain BUY. Target price: S$1.71.
Analysis
- Modest recovery for Hong Kong’s retail malls. Hong Kong’s retail rental market is gradually recovering, supported by the return of tourist spending, improving leasing demand from Mainland Chinese brands, financial institutions and selected F&B operators. Vacancy rates have declined in key shopping districts, which has translated to modest rental growth. Unfortunately, neighbourhood malls continue to face headwinds from growing northbound spending by Hong Kong residents in Mainland China.
- Benefitting from influx of international students. The Hong Kong government has lifted the policy cap for international student quota at public universities from previous 20% to 40% in academic year 2024/25 and to 50% in academic year 2026/27. The policy liberalisation aims to establish Hong Kong as an education hub. Enrolment for international students has since registered a steady increase. Festival Walk should benefit from increased footfall from undergraduate and graduate students at City University and Baptist University, which are located nearby. Management conscientiously optimises its tenant mix to cater to the preference of youth/students.
- Green shoot of recovery at Festival Walk. Festival Walk recorded tenant sales growth of 4% yoy in 1QFY27, the second consecutive quarter of sustained spending on higher-value luxury goods. Mapletree Pan Asia Commercial Trust (MPACT) has completed the reconfiguration of 18,800sf of space across three floors into a curated mix of F&B, lifestyle, beauty and health concepts. The enhancement has been operational since Jul 26 and generated ROI of close to 50%. Festival Walk incurred negative rental reversion of 9.1% in 1QFY27. We expect the negative reversions to gradually moderate due to healthy retail sales boosted by positive wealth effect from a recovery in residential home prices.
BUY (Maintained)
Current price:
Target price:
Upside:
S$1.21
S$1.71
41.3%
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
Related articles
Company Coverage
31 Jul 2026
Mapletree Pan Asia Commercial Trust (MPACT SP): 1QFY27: Green Shoots In Hong Kong And Japan
Company Coverage
11 Aug 2026
Oversea-Chinese Banking Corp (OCBC SP): 2Q26: Momentous Blockbuster Results
Company Coverage
27 Aug 2026
Pan-United Corporation (PAN SP): 1H26: Leveraging Market Leadership to Capture Industry Growth
Our latest research
Company Coverage
16 Sept 2026
Singapore Airlines (SIA SP): Near-term Outlook Clouded By Elevated Jet Fuel Prices Amid Middle East Tensions
Company Coverage
11 Sept 2026
Singapore Telecommunications (ST SP): Driving Long-Term ROIC Goals
Company Coverage
10 Sept 2026