SINGAPORE – Mapletree Investments Pte Ltd (“Mapletree” or “the Group”) today announced its results for the financial year ended 31 March 2014 (“FY13/14”) with robust profit after tax and minority interests (“PATMI”) of S$859.4 million, and healthy return on equity (“ROE”) of 10.6%. Total owned and managed assets (“Assets under Management” or “AUM”) increased to S$24.6 billion, while shareholder’s funds grew to S$8.3 billion. Mapletree further closed the year with a low net gearing of 8%, which positions the Group well to capitalise on future growth opportunities.

Group Chief Executive Officer Mr Hiew Yoon Khong said: “In FY13/14, we strengthened our capital management business and broadened our earnings opportunities with the launch of Mapletree China Opportunity Fund II (“MCOF II”). Mapletree’s steady and consistent financial performance validates our business strategy, which is to build a comprehensive and diverse offering of real estate investment products that increases our recurring earnings and at the same time, meet our long-term objective of sustaining high returns, as reflected in the healthy ROE of 10.6% in FY13/14”.

FY13/14 saw Mapletree raise US$1.4 billion for MCOF II, well above the initial target of US$1 billion. The fund closed within 10 months of its marketing launch in October 2012, and just two months after its first close of US$1.1 billion at the end of June 2013. MCOF II is one of the largest China-focused private equity real estate funds raised to-date, and is the second China-focused fund sponsored by Mapletree. A strong testament to Mapletree’s capital management capabilities and international recognition of MCOF II’s fundraising success was the accolade of ‘Asia Capital Raise of the Year’ at the 2013 Global Private Equity Real Estate (PERE) Awards.

With MCOF II, Mapletree now has five private funds, with third-party AUM growing at a five-year compounded annual growth rate of 32% to S$18.2 billion as at 31 March 2014. The Group’s third-party AUM assets span seven countries in Asia, namely Singapore, China, Japan, Vietnam, South Korea, Malaysia and India.

Total revenue for FY13/14 was S$548.6 million, compared to S$686.3 million in FY12/13. The drop was mainly due to the deconsolidation of Festival Walk and Mapletree Anson, which were divested to Mapletree Greater China Commercial Trust (“MGCCT”) and Mapletree Commercial Trust (“MCT”), respectively. PATMI was S$859.4 million, a 7.8% fall from a year ago. The decline was due to a lack of disposal gains that lifted PATMI last year.

FY13/14 caps the five-year period that Mapletree set for itself to achieve significant growth across six key performance indicators. 

“Five years ago, we set ourselves six growth challenges and have achieved significant growth in those areas. Looking ahead, we will continue to use the same well-balanced targets to benchmark our performance. While continuing to grow in scale, we are mindful of maintaining the consistency of our earnings and returns going forward,” said Mr Hiew.

Five-year financial performance

• Achieved five-year Net Asset Value (“NAV”) CAGR of 11.4%
• Delivered five-year average ROIE of 14.1%
• Expanded EBIT + SOA to S$472.0 million
• Grown Fee Income to S$203.2 million
• Scaled AUM 2.1 times to S$24.6 billion
• Increased third-party AUM to 74% of total AUM

Other five-year highlights

• Grown from 1 real estate investment trust (“REIT”) to 4 REITs listed on the SGX mainboard
• Completed flagship development, Mapletree Business City (“MBC”), in Singapore
• Exported the Mapletree signature brands, VivoCity and MBC, overseas to China and Vietnam
• Received 16 Building and Construction Authority Green Mark and 5 Leadership in Energy and Environmental Design (LEED) accreditations for its environmentally sustainable developments in Singapore and overseas

Looking ahead

On the prospects of Mapletree’s key markets, Mr Hiew said: “Over the last 12 months, we were concerned about the volatility that could arise across markets in Asia once the start of the QE tapering was made known, and as such we started FY13/14 cautiously, with a net gearing of almost zero. While our concerns have been allayed so far and the outlook for Asian markets remains stable, it is not expected to be robust. Therefore going forward, our strategy within Asia is to selectively focus on specific asset classes and micro-markets where we see opportunities to invest in and acquire good quality, high returns assets. We will also begin expanding beyond Asia into regions such as Europe and the US, and into new real estate sectors, to further diversify earnings.”

Mapletree recently announced its acquisition of a 49 percent stake in Oakwood Asia Pacific Pte, Ltd. (“OAP”), the Asia arm of Oakwood Worldwide – a well-known corporate and serviced apartment business. The deal will also see Mapletree acquire and develop corporate and serviced apartment assets within Asia, Europe and North America.

On the development front, Mapletree successfully bidded for three sites in FY13/14, namely the Kowloon East commercial site and the Tsing Yi logistics site in Hong Kong SAR, and the Tai Seng industrial site in Singapore.

During the year, the Group also made significant inroads into logistics development projects in China, with three completed land bids and several other investment agreements. China is seeing rising demand for modern logistics properties, which it has a limited supply of. This creates many opportunities to develop such facilities in the country.

In Singapore, Mapletree commenced the development of MBC II, the second phase of MBC. MBC II will comprise a 30-storey tower (making it Singapore’s tallest business park) and three podium buildings ranging from five to eight storeys over a total site area of 108,000 sqm. This design will offer a wide range of space configurations to meet the diverse requirements of tenants. With a GFA of 124,800 sqm, MBC II will feature state-of-the-art infrastructure, an eco-friendly design and sustainable building features. It is slated for completion in 2016, and is part of Mapletree’s ongoing efforts to rejuvenate and transform the Alexandra precinct.

When completed, these development projects will be offered to the respective Mapletree REIT platforms on a right of first refusal basis to support their growth.