• High return on invested equity¹ (“ROIE”) at 21.6% and return on equity² (“ROE”) of 11.2%
• Increased total owned and managed assets under management (“AUM”) by 8.6% to S$60.5 billion
• Resilient performance despite challenging macro environment; on track to achieving key performance indicators set for third Five-Year Plan

SINGAPORE – Mapletree Investments Pte Ltd (“Mapletree” or “the Group”) is pleased to announce today that the Group has recorded a PATMI³ of S$1.78 billion for the financial year 2019/2020 (“FY19/20”) ended 31 March 2020. The Group also delivered the highest recurring earnings of S$752 million in five years, a year-on-year (“y-o-y”) growth of about 5% from FY18/19. Due to lower asset revaluation and disposal gains, PATMI decreased by 18% from the historical peak of S$2.16 billion recorded in the previous financial year. 

On FY19/20’s performance, Mr Hiew Yoon Khong, Mapletree Group Chief Executive Officer said, “Despite the challenging macro environment, Mapletree delivered creditable and resilient results in the first year of its third Five-Year Plan. We have fortunately focused on strengthening our balance sheet by reducing our gearing for FY19/20. In the current uncertain environment, this will continue to be our key focus for financial year 2020/2021. The Covid-19 pandemic is expected to bring about uncertainty to our earnings in the coming years. However, we are cautiously optimistic in our business going forward, as we believe that Mapletree’s strong balance sheet and a disciplined approach in executing key elements of its business model will place the Group in good stead to weather the economic headwinds. We have built up a well-diversified global portfolio; both geographically and in terms of asset classes, which is especially critical in the current challenging environment.”

“A significant proportion (~35% of AUM) of our portfolio is in logistics and data centres which are relatively less affected by the pandemic. This has cushioned our expected reduction in profitability going forward,” added Mr Hiew.  
 
The Group recorded a 1% y-o-y increase in revenue to S$3,877 million in FY19/20 from S$3,821.2 million in FY18/19. 

EBIT + SOA⁴ recorded a 10% growth to S$2,308.1 million, largely due to the stable performance of the Group’s four Singapore-listed real estate investment trusts (“REITs”), contributions from Europe and US logistics and data centre businesses as well as fees from our capital management business. ROIE rose significantly to 21.6% from 10.4% in FY18/19 as a result of higher disposal gains from the divestment of Mapletree Bay Point in Hong Kong SAR in May 2019 and Mapletree Business City II (“MBC II”) in Singapore, in November 2019. 

The Group grew its AUM to S$60.5 billion in FY19/20 from S$55.7 billion in FY18/19. This was mainly attributable to Mapletree’s growing presence in US and Europe.

Aside from improvements in recurring earning streams from underlying operations, the Group’s performance was further enhanced, in part, by earnings from (see Additional Information below for a detailed list):

• Deepened exposure in markets beyond Asia Pacific. Mapletree acquired commercial assets at a total transaction value of approximately S$1 billion in Australia, Ireland and Poland. In addition, Mapletree added two completed Purpose-Built Student Accommodation (“PBSA”) and its first PBSA development to the United Kingdom (“UK”) portfolio as well as expanded data centre operations in North America.
• Strong development pipeline. 27 new China logistics developments were added in FY19/20, bringing the Group’s global logistics footprint to six million square metres (“sqm”) of gross floor area (“GFA”). The logistics asset class remains as the largest contributor to the Group’s AUM, comprising ~30% or S$18.1 billion of total AUM. 
• Enhanced recurring income through strong capital management. In November 2019, the Group syndicated Mapletree Australia Commercial Private Trust (“MASCOT”) which raised A$654 million (~S$592 million) in equity. Mapletree also completed the successful syndication of Mapletree US & EU Logistics Private Trust (“MUSEL”) with equity raised of US$1.8 billion (~S$2.5 billion) in March 2020. The Group has also executed several capital recycling initiatives in FY19/20. In FY19/20, third-party managed AUM accounted for S$42.2 billion (69.8% of total AUM). Over the last decade, Mapletree has grown its third-party managed AUM by more than five times. 

Added Mr Hiew, “Moving forward, the Group will continue to focus on a calibrated approach in executing our business model which involves investments, asset and capital management to continue to sustain the Group’s consistent returns. Our success in syndicating both MASCOT and MUSEL as well as capital recycling initiatives are a testament to Mapletree’s ability in delivering consistently strong returns to our investors. In FY19/20, we also managed to obtain alternative sources of funding through a sustainability-linked loan as well as lower our net gearing through active capital management initiatives. We are currently exploring the possibility of launching more funds or REIT platforms over the next couple of years, including a private fund comprising the current European commercial portfolio which we have already acquired.”

The Group kicked off the new financial year ending 31 March 2021 with the successful exit of two Mapletree-managed private funds. MIC Fund was launched in 2008 with a committed capital of US$1.2 billion (~S$1.7 billion) to invest in commercial, residential and mixed-use property developments in China and India. Upon the end of its investment period in 2013, MIC Fund had made seven investments. These projects have been progressively divested and the fund was fully realised in April 2020, achieving a net internal rate of return⁵ (“IRR”) of about 13.6% and 2.0 times equity multiple. MJLD, which was set up in 2014 to invest mainly in logistics development assets in Japan, has divested all its assets with expected return of a net IRR⁵ of 23.7% and of about 1.8 times equity multiple in end June 2020. Together with MJOF which was successfully realised in March 2019 with a net IRR⁵ of 27.1% and 1.88 times equity multiple, the Group has demonstrated a sterling track record for our Japan investments and fund management capabilities.

In line with the Government’s agenda of supporting the workforce amid the economic downturn brought about by Covid-19, Mapletree remains committed in supporting Singapore’s workforce. The Group has been hiring and recruiting, including for our Mapletree Associate Programme (“MAP”) and Mapletree Executive Programme, and will not be utilising any Government funding under Singapore’s Job Support Scheme or similar schemes in other countries. In total, 10 graduates were hired under the MAP over the last three months. To further support Mapletree’s growth in the coming years and to nurture talents in the real estate industry, the Group will continue to recruit good talents and offer internship places including to those from the Mapletree-supported SMU Real Estate Programme.

Additional Information:
More details about earnings platforms:

In May 2019, the Group acquired West Station, its first commercial asset in Warsaw, Poland. The property is fully occupied and enjoys excellent access to key transportation nodes. In the Irish market, Mapletree acquired two properties totalling more than 50,000 sqm of net lettable area (“NLA”) – The Sorting Office, located in the heart of Dublin’s Silicon Docklands and Nova Atria, located in Sandyford Business Park, were acquired in June 2019 and October 2019 respectively. 111 Pacific Highway, a 24-storey, Grade A commercial building located in North Sydney, Australia with approximately 18,600 sqm NLA was added to the portfolio in July 2019. 

Two PBSA assets located in Coventry, the UK were added to the student housing portfolio in October 2019. Comprising a total of 1,127 beds, these assets are in close proximity to Coventry University. Mapletree also completed its first UK student housing development project, Westwood Student Mews with 453 beds in December 2019 near Warwick University. As of 31 March 2020, the Group’s student accommodation portfolio – including those held under MGSA and Mapletree – comprises a total of 50 PBSA assets with over 22,000 beds located across 33 cities in the UK, the US and Canada.

Further inroads were made into the North America data centre market with the US1.4 billion (~S$1.9 billion) acquisition of three fully fitted hyperscale data centres and 10 powered shell data centres in November 2019 and January 2020 respectively via a 50:50 jointly owned vehicle of Mapletree and Mapletree Industrial Trust. Measuring a total NLA of 193,350 sqm, the 13 data centres are 100% leased to established tenants comprising cloud, colocation and enterprise users. 

Other development projects include 27 new logistics properties in China, bringing the Group’s global logistics footprint to six million sqm of GFA, which marked a 40% increase y-o-y from FY18/19. 

Apart from geographical expansion, Mapletree’s business strategy continues to be focused on effective capital management to ensure high recurring income and to mitigate earnings volatility. 

At MASCOT’s closing in November 2019, the Trust successfully raised A$654 million (~S$592 million) in equity and was fully invested in a portfolio of 10 Grade A office assets located in key gateway cities, namely Sydney, Melbourne, Adelaide, Brisbane and Perth. In March 2020, the Group completed the successful syndication of MUSEL. MUSEL is capitalised with equity of US$1.8 billion (~S$2.5 billion) and fully invested in a portfolio comprising 262 logistics assets in 26 states in the US and 20 cities in seven European countries with a total investment value of US$4.3 billion (~S$6 billion). 

In November 2019, Mapletree Commercial Trust acquired MBC II from the Group at S$1.55 billion. 

Additionally, Mapletree Logistics Trust acquired a portfolio of seven logistics properties across Malaysia, Vietnam and China from Mapletree at S$411.8 million while Mapletree North Asia Commercial Trust acquired two office buildings in Japan at about S$480 million from the Group in February 2020. 

West Station, Mapletree’s first commercial acquisition in Warsaw, Poland, comprises two office buildings with approximately 69,000 sqm of NLA

The Group completed its first UK student housing development project, Westwood Student Mews, located in Warwickshire, in December 2019

Mapletree Chengdu Qingbaijiang Logistics Park is a 107,379 sqm NLA development project that was completed in FY19/20

Footnotes
¹ROIE computed based on adjusted* PATMI over the Group’s equity held at original invested cost. 
²ROE denotes return on equity and is computed based on PATMI attributable to equity holder of the Company over shareholder’s funds.
³PATMI denotes net profit (after tax and non-controlling interests) attributable to Perpetual Securities Holders and Equity Holder of the Company. 
⁴Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated companies and joint ventures (SOA), excluding residential profits, incentive fee from private funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange and derivatives gains or losses. 
⁵After expenses, taxes and base management fee but before carried interest.

*Adjusted to exclude non-cash and non-operating items such as unrealised revaluation gains or losses mark-to-market fair value adjustments, gains or losses on foreign exchange, negative goodwill and dilution gains and losses and include OIC gains from any gains or losses on disposal and corporate restructuring surplus or deficit.