The Group will continue to invest in new markets and grow its recurring income streams to generate strong returns
- Profit After Tax and Minority Interests (“PATMI”) of S$965.2 million
- Recurring PATMI up 11.7% year-on-year
- Return on Equity (“ROE”) of 9.6%
- Five-year Net Asset Value Compounded Annual Growth Rate (“NAV CAGR”) of 11.8%1 per annum
- Total Owned and Managed Assets under Management (“AUM”) of S$34.7 billion
Singapore – Mapletree Investments Pte Ltd (“Mapletree” or “the Group”) reported PATMI of S$965.2 million for the financial year ended 31 March 2016 (“FY15/16”), a 3.8% drop from a year ago due to lower revaluation gains. Returns remain strong with ROE at 9.6% for the year, and averaging at 10.2% over two years from FY14/15 – the start of Mapletree’s new five-year business plan.
Recurring PATMI increased 11.7% from a year ago to S$529.4 million on the back of strong operating performances from the Group’s existing assets and its four listed real estate investment trusts (“REITs”), leasing contributions from new assets, and higher fee income.
Said Mr Hiew Yoon Khong, Mapletree Group Chief Executive Officer: “We are pleased with our performance, which is set against the backdrop of an economic slowdown in Asia, our core market. Importantly, we set out to raise the proportion of recurring earnings when we embarked on our new five-year business plan in FY14/15, and we have made strong progress towards that objective in this second year of execution.
“Recurring PATMI made up 54.8% of overall PATMI in FY15/16, as compared with our historical five-year average of 39.9%. Over the remaining three years, we want to continue growing our recurring earnings so that it will account for most of PATMI. This will provide strong cash flow, strengthen our business and ensure that Mapletree delivers consistent earnings and returns.”
Revenue climbed 15% to S$1.9 billion on the back of contributions from the Group’s assets in its new markets of Australia, the United States (“the US”) and Europe; contributions from SC VivoCity, the Group’s first mall in Vietnam; and properties held under its REITs.
As at 31 March 2016, AUM grew by S$6.3 billion from a year ago to S$34.7 billion, with the Group’s investments in new markets accounting for close to half of this increase. Acquisitions the Group made in new markets during the year include six corporate lodging and serviced apartment assets in Australia and the US; five office buildings in Australia; four office properties and a student housing portfolio in the United Kingdom (“the UK”); and an office building in Germany.
Earlier this month, the Group acquired Green Park in the UK, which currently provides about 1.4 million square feet (“sq ft”) of Grade A lettable space and is 93% occupied.
Said Mr Hiew: “Mapletree’s performance shows that we made the right move to invest outside of Asia amid the continued economic slowdown in the region, and we expect that our investments in the new markets of Australia, the US and Europe will underpin growth and contribute strongly to recurring income over the next three years.”
Within Asia, Mapletree will continue to focus on specific asset classes and micro-markets where investment opportunities remain attractive.
Added Mr Hiew: “In China, we remain keen to invest in modern logistics real estate projects, as well as office and residential developments, in select cities.
“We also see interesting opportunities in Vietnam that we are keen to tap. Unlike most of Asia, Vietnam is delivering strong growth. The office market in Ho Chi Minh City has seen a significant increase in demand with new and existing companies expanding their presence, while its residential market recorded strong sales volume in 2015 that is expected to continue gaining momentum.”
FINANCIAL HIGHLIGHTS
| (S$ million) | FY15/16 | FY14/15 | Variance |
| Revenue | 1,878.9 | 1,633.9 | + 15.0% |
| EBIT + SOA2 | 1,326.9 | 1,141.4 | + 16.3% |
| Recurring PATMI | 529.4 | 474.0 | + 11.7% |
| PATMI | 965.2 | 1,003.6 | – 3.8%* |
| AUM | 34,746.2 | 28,415.4 | + 22.3% |
| Shareholders’ Funds | 9,941.3 | 9,330.1 | + 6.6% |
* Excluding revaluation gains, PATMI rose 22.6% to S$561.1 million from S$457.7 million
Footnotes
1NAV CAGR is adjusted for dividends distributed to shareholder and calculated excluding non-controlling interests and perpetual securities and with NAV as of 31 March 2011 as starting base.
2Earnings before interest and taxes (EBIT) plus share of operating profit of associated companies and joint ventures (SOA), excluding revaluation, SOA gains/losses relating to disposal, foreign exchange and derivatives gains/losses.
OPERATIONAL HIGHLIGHTS
Broadening presence beyond Asia
Over the past two years, in anticipation of slower growth in Asia, the Group has been actively exploring growth opportunities beyond Asia in new markets such as the US, Europe and Australia to diversify its income streams.
Europe – The UK and Germany
In FY15/16, Mapletree acquired four office buildings and a portfolio of student housing properties in the UK, as well as an office building in Munich, Germany.
Post 31 March 2016, Mapletree acquired Green Park, a 79-hectare (“ha”) business park in Reading, Thames Valley, the UK. Green Park currently has approval to provide about 2.1 million sq ft in lettable space, and plans are underway to increase this to about 2.5 million sq ft to meet demand.
The US
Mapletree acquired five corporate lodging properties in the US in FY15/16. The Group now owns eight corporate lodging assets in the country.
Australia
Mapletree acquired five office assets and one serviced apartment property in FY15/16.
Core operations in Asia
Even amid the economic slowdown, Asia continues to offer strong development and investment opportunities that Mapletree is keen to tap. The region remains the Group’s core market.
Singapore
Mapletree Business City II (“MBC II”), the second phase of the Group’s flagship business park development Mapletree Business City, received its Temporary Occupation Permit (“TOP”) in April 2016 and is close to 50% committed to date.
In December 2015, Mapletree divested its 30% stake in Keppel Bay Tower to Keppel Corporation and Keppel Land as part of a share swap transaction, in exchange for the latter’s 39% stake in HarbourFront Tower 1 and HarbourFront Tower 2.
Hong Kong SAR
Mapletree Logistics Hub Tsing Yi, a ramp-up logistics facility spanning 11 storeys and a GFA of 915,000 sq ft, attained its TOP in March 2016 and is 57% committed to date.
Meanwhile, construction of Mapletree’s Grade A office building in Kowloon East with a GFA of 660,000 sq ft is progressing well. Completion is expected in the third quarter of 2017 and pre-leasing activities have commenced.
China
Mapletree is making good progress developing several large-scale mixed-use projects. Phase four of the 42-ha Nanhai Business City, which comprises residential developments, is selling well, with close to 90% (544) of the 616 launched units sold. Over at the 8.5-ha Mapletree Ningbo Mixed-Use Development, the first phase involving residential properties will be launched over the coming few months.
At the 11.9-ha office cum retail development Mapletree Business City Shanghai and VivoCity Shanghai, work to secure leasing commitments for its office space has commenced, while VivoCity Shanghai is scheduled to welcome shoppers by year-end.
Mapletree has invested in 18 logistics development projects with a total development cost (“TDC”) of S$1 billion. Together, these developments will offer an estimated net lettable area (“NLA”) of 16.6 million sq ft and as at end March, six developments with an NLA of 6.2 million sq ft have been completed.
Japan
Mapletree invested in a nine-storey retail asset in Osaka in October 2015 and construction is set to begin in the third quarter of 2016. Upon completion in early 2018 the mall, with a GFA of 226,000 sq ft, will be fully leased to one of Japan’s largest electronics retailers.
The Group’s two Japan-focused funds continued to expand in the country. MJOF, an office fund, acquired three office buildings for JPY40 billion in FY15/16. The fund now owns nine office assets located in on or around the fringe of the Tokyo CBD, and within the Greater Tokyo area.
Meanwhile, MJLD, a logistics development fund, has to date invested a total of JPY16 billion in seven logistics facilities, of which four are through its joint venture with ITOCHU Corporation.
Construction of the Group’s serviced apartment project in Azabudai, Tokyo, is on track and will be managed by Mapletree’s associate Oakwood Asia Pacific upon completion in early 2017.
Vietnam
FY15/16 saw the opening of SC VivoCity, Mapletree’s first shopping mall in Vietnam, which has been enjoying strong footfalls since it first welcomed visitors in April 2015. As at 31 March 2016, almost 90% of its 440,000 sq ft in NLA has been leased.
SC VivoCity is the first phase of Saigon South Place, a 4.4-ha integrated mixed-use development project that Mapletree is developing in Ho Chi Minh City’s District 7. When completed, Saigon South Place will comprise retail, office, serviced apartments and residential space.
Construction of the adjoining office complex has started and is expected to be completed by end 2016, while work on the serviced apartments and residential block will commence soon and both buildings are scheduled for completion by end 2017.
Malaysia
Mapletree is currently developing two logistics developments which collectively have a TDC of S$411 million. The projects in Shah Alam and Tanjung Pelepas will offer a GFA of 3.7 million sq ft when completed in in March 2018 and May 2017 respectively.
