- Recurring PATMI up 21.6% year-on-year to S$643.6 million
- Return on Equity (“ROE”) of 12.8% and Return on Invested Equity (“ROIE”) of 18.7%
- Total Owned and Managed Assets under Management (“AUM”) increased to S$39.5 billion
SINGAPORE – Mapletree Investments (“Mapletree” or “the Group”) delivered a record PATMI1 of S$1,413.7 million, a 46.5% increase in the financial year ended 31 March 2017 (“FY16/17”). Backed by strong recurring earnings, investment and other gains as well as revaluation gains, the Group recorded a higher ROE of 12.8% and a higher ROIE of 18.7% as compared to a year ago.
Overall revenue and recurring PATMI rose to S$2,328.8 million and S$643.6 million respectively, representing a year-on-year increase of 23.9% and 21.6% respectively. This was driven by earnings from:
- The Group’s acquisitions in Vietnam, the US (“United States”), the UK (“United Kingdom”) and Australia;
- Completion of properties previously under development – such as Mapletree Business City II in Singapore and Mapletree Logistics Hub Tsing Yi in Hong Kong SAR;
- Contributions from its four managed REITs.
Said Mr Hiew Yoon Khong, Mapletree Group Chief Executive Officer: “While we have grown in scale over the years, we have remained focused on maintaining consistency in our earnings. To seek continued growth, we have gradually expanded from an Asia-centric company to a global company with presence in 12 economies since FY14/15. We had also ventured into new asset classes of student housing, corporate housing and serviced apartments over the recent years. This strategy has paid off with strong recurring earnings accounting for 45.5% of our total profits this year and allowing us to achieve our highest profitability yet.”
Gaining ground internationally
In the UK, Mapletree acquired Green Park, a 79-hectare freehold business park in Thames Valley, Reading in May 2016. The business park has a committed occupancy of approximately 92% and has a net lettable area of close to 130,000 square meters (“sqm”), with a further development potential of close to 82,000 sqm.
In FY16/17, Mapletree continued to grow its international presence in the corporate housing sector, with the acquisition of Oakwood Worldwide (“Oakwood”), a global provider of corporate housing and serviced apartment solutions in February 2017. This acquisition followed an earlier partnership with Oakwood which started in 2014, and has been part of the Group’s long-term strategy to expand globally into this asset class.
During the year, Mapletree’s AUM increased to S$39.5 billion, supported by recent acquisitions, revaluation gains from newly completed properties and the four Mapletree managed REITs. Assets in new markets – Europe, the US and Australia continued to grow, accounting for 14.2% of total AUM or S$5.6 billion in FY16/17. These markets contributed to 13.5% of the Group’s EBIT+SOA2, while Singapore-based properties continued to remain a main contributor to EBIT+SOA2 at 51.9%.
Value enhancing capital management
Mr Hiew added: “As part of our capital management strategy, we successfully closed Singapore’s first student housing-focused trust, Mapletree Global Student Accommodation Private Trust (“MGSA P-Trust”), securing US$535 million in equity. We will continue to grow a sizeable portfolio of student housing assets, as we see increasing demand from private investors who seek stable and strong returns from the anti-cyclical nature of this asset class. We plan to syndicate another private equity fund focused on this asset class if market conditions are right.”
In February 2017, MJLD, a private Japan-focused real estate development fund managed by Mapletree acquired three logistics properties in Japan. With this acquisition, MJLD has significantly increased its proportion of capital deployed since its establishment in 2014. Prior to this, in August 2016, Mapletree Business City I was successfully injected into Mapletree Commercial Trust (“MCT”), and was well received by MCT unitholders and reinforced MCT’s standing as a leading S-REIT.
Continued focus on Asia with successful development execution
While growing its global footprint, Mapletree continued to enhance its position in Asia, with acquisitions and development milestones achieved during the year. In Vietnam, the Group acquired Kumho Asiana Plaza3, a prime mixed-use complex in Ho Chi Minh City. This is Mapletree’s largest acquisition of a completed, income-producing property in the country to date. It has offices, serviced apartments and a hotel over a gross floor area (“GFA”) of 146,000 sqm.
In March 2017, the Group opened Mapletree Business Centre, its first office development of international Grade A specifications with strong leasing commitments. This is the second phase of the Group’s precinct transformation at Saigon South Place, located in the affluent district 7 of Ho Chi Minh City.
To meet the growing demand of high specifications logistics and e-commerce sectors in China, Mapletree grew its logistics development projects in the country, bringing the total GFA to 2,800,000 sqm, a year-on-year increase of 81%. More than 80% of total GFA across 34 projects is located in Tier 1 and 2 cities.
Also in China, VivoCity Shanghai was officially opened on 26 May 2017 with a committed occupancy of 95%. As the retail component of Mapletree’s mixed-use development in Shanghai’s Minhang district, the mall serves the residential community as well as the working community of the adjacent Mapletree Business City Shanghai.
In Hong Kong SAR, Mapletree’s first logistics development project in the country – Mapletree Logistics Hub Tsing Yi, an 11-storey ramp-up Grade A logistics facility, successfully achieved a high committed occupancy of close of 97% within a year, following its completion in March 2016. This prime logistics asset has allowed Mapletree to generate high returns from the initial development cost.
Footnotes
1PATMI denotes net profit (after tax and non-controlling interests) attributable to Perpetual Securities Holders and Equity Holder of the Company.
2Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated companies and joint ventures (SOA), excluding revaluation, SOA gains or losses relating to disposal, foreign exchange and derivatives gains or losses.
3To be renamed to mPlaza Saigon.
