MAPLETREE Pan Asia Commercial Trust’s : N2IU 0% (MPACT) distribution per unit (DPU) fell by 9.1 per cent to 2.20 Singapore cents for its third quarter ended Dec 31, 2023.

Gross revenue was up 0.8 per cent to S$241.6 million for the quarter, from S$239.8 million previously, said the manager in a bourse filing on Monday (Jan 29).

Net property income grew 1.7 per cent to S$182.4 million, from S$179.4 million in the corresponding year-earlier period.

MPACT’s manager said the growth was primarily driven by Singapore’s “robust performance”, which delivered positive contribution despite higher utility expenses.

While Hong Kong and Japan delivered steady earnings in local currency terms, their contributions were dampened by a stronger Singapore dollar.

Distributable income declined 9.3 per cent year on year to S$115.3 million, from S$127 million previously.

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The distribution will be paid out on Mar 14 after books closure on Feb 6.

Giving an outlook on the Singapore market, the manager said that the retail sector could face challenges, including persisting inflationary pressures, manpower shortages, and high operating costs.

The continued strength of the Singapore dollar could also encourage outbound travel, impacting local retail sales.

As for Singapore office rentals, the manager noted that approximately 3.9 million square feet of new office space is expected from 2024 to 2025, averaging 2 million sq ft per year, which is higher than the past five-year annual average of 1.1 million sq ft.

But ongoing global economic uncertainties are expected to dampen office demand and slow rental growth in 2024. “The build up of shadow and secondary spaces, as well as new supply, could add further pressure.”

Overall, macroeconomic challenges including persistent geopolitical conflicts, high inflation rates, and protracted period of high interest rates remain. Amid these broad challenges, MPACT’s strategy focuses on “sustaining healthy occupancy levels and ensuring steady rental revenue, while managing cost efficiency”, said its manager.

In the long run, the Reit’s strength is underpinned by its core assets – the Mapletree Business City and VivoCity – combined with its manager’s operational expertise, it said. “These position MPACT to adeptly navigate current headwinds and seize emerging opportunities.”

Units of the Reit closed S$0.02 or 1.4 per cent lower at S$1.39 on Monday before the announcement.