Mapletree full-year earnings dip 3%

Mapletree full-year earnings dip 3%

But operating profit rises 35%; revenue jumps 69% to $365.6m


MAPLETREE Investments posted a 3 per cent dip in net earnings for the year ended March 31, 2008 to $1.04 billion because of lower net revaluation gain and higher net finance cost.


Operating profit, however, rose 35 per cent to $146.9 million on the back of first full-year contributions from VivoCity and St James Power Station (SJPS) and maiden contribution from The Beacon, a residential project at Cantonment Road.


The fully owned subsidiary of Temasek Holdings also achieved much higher occupancy and rental rates from all its investment properties across the board.


Revenue jumped 69 per cent to $365.6 million with VivoCity and SJPS contributing a total $99.5 million and The Beacon contributing $47.5 million.


The Temasek unit booked a net revaluation gain of $879 million (after deferred tax provision) for the latest financial year, lower than the $971.2 million in the preceding year.


Mapletree chairman Edmund Cheng said the group is exploring several mixed-use commercial projects in Vietnam (in Ho Chi Minh City, Hanoi and the provinces abutting them). ‘In line with our business model, we will seed these projects with our own balance sheet, and will consider the possibility of starting a Vietnam-focused fund once we have achieved a significant asset size,’ he said in his message in Mapletree’s latest annual report.


Elsewhere in the report, the group revealed it is ‘in the advanced stage of evaluating several projects comprising a wide spectrum of property types, from office, retail, residential, to industrial and service residential properties, with a view to seed a new Vietnam fund with these assets over the next few months’.


When asked, Mapletree’s spokeswoman said the Vietnam fund will be started within the next 12 months but this will depend on market conditions in Vietnam. The fund size will be at least US$500 million.


Mapletree’s real estate assets, both owned and managed, stood at $8.9 billion as at March 31, 2008, up 59 per cent from $5.6 billion a year earlier. Of these, its third-party assets under management (AUM) amounted to $3.1 billion, an increase of 94 per cent, while the group’s owned assets grew nearly 45 per cent from $4 billion to $5.7 billion.


Fee income, excluding fee income from associates, grew 40 per cent last year. The group’s AUM and fee income will be boosted significantly in the current financial year from the Mapletree India-China Fund launched in April this year and a new Mapletree-Arcapita Bank fund formed to hold the $1.7 billion portfolio of properties acquired from JTC Corp.


In an interview with BT in April this year, Mapletree CEO Hiew Yoon Khong projected the group’s total assets could hit $15 billion to $20 billion in a year.


The India-China fund has secured a US$600 million commitment at the initial closing and is currently marketing its second closing with a target to secure a total commitment of US$1.5 billion.


In Singapore, the group is developing Mapletree Business City, an office and business park with 1.7 million sq ft of total net lettable area and slated for completion in second-half 2010.


It is also developing a 19-storey Grade A office building at Anson Road called Mapletree Anson, which is expected to be ready in mid-2009. These two assets could be potentially sold at some point to the proposed Mapletree Commercial Trust.


This trust was to have been listed here earlier this year holding about $3 billion of the group’s assets in the HarbourFront and Alexandra Precincts with VivoCity as the anchor asset. However, the launch has been deferred due to unfavourable stock market conditions.


Source: Business Times

Mapletree planning $682m fund in Vietnam

Mapletree planning $682m fund in Vietnam


REAL estate firm Mapletree Investments is setting up a US$500 million (S$682 million) fund to invest in properties in fast-growing Vietnam, to be launched within 12 months.

The Temasek Holdings unit said it is setting up the fund to ‘harness Vietnam’s rising development cycle, and to tap into the growing affluence of the middle-class segment of its population’.


Mapletree unveiled its plans for the fund in its recently published annual report.


It is ‘currently in the advanced stages of evaluating several projects comprising a wide spectrum of property types, from office, retail and residential to industrial and service residential properties, with a view to seed a new Vietnam fund with these assets over the next few months’.


Mapletree spokesman Shae Hung Yee said the company plans to launch the fund, which will be at least US$500 million in size, within the next 12 months.


This timeline, however, may be altered depending on ‘market conditions’, she said. ‘We will make sure the time is right before starting any fund,’ she added.


Mapletree’s fund will include its own seed money, said Ms Shae, who added that the firm is considering ‘syndicating the fund’ out to like-minded investors with aligned interests.


The move is part of Mapletree’s efforts to tap into the high growth potential of emerging markets such as China, India and Vietnam, said chairman Edmund Cheng in the company’s annual report.


Mapletree posted a net profit of $1.04 billion for the financial year ended March 31, down 3 per cent from the year before.


On Tuesday, it announced that it had completed a $1.71 billion acquisition of industrial landlord JTC Corporation’s assets in Singapore.


The JTC properties, comprising 39 multi-storey factories and 23 offices and warehouses, had originally been slated for a real estate investment trust. Plans to list the trust were subsequently scrapped due to poor market conditions.


Mapletree owns and manages $5.7 billion worth of real estate assets in Singapore, including the VivoCity mall and St James Power Station. It manages about $4.8 billion worth of assets in the region. The latter figure includes the recent JTC acquisition.


Source: Straits Times

More instability expected in REIT market before it picks up

More instability expected in REIT market before it picks up


SINGAPORE: UBS said more instability is expected in the relatively cool real estate investment trust (REIT) market before it picks up, and this turnaround could happen as early as the last quarter this year.


Although REITs have been under pressure in the current volatile market, some other market-watchers said they expect to see new REITs being launched within the next six to 12 months.


Retail and healthcare REITs, along with the lowly geared and plain vanilla ones, will be among the first to pick up, before the others do.


Mark Ebbinghaus, MD, Head of Real Estate, Lodging & Leisure, UBS, said: “The market will look increasingly for strong sponsorship. Independents will find it tougher whereas a large, well-sponsored vehicle with a sound management will probably come out first.”


UBS thinks it will take at least another six months before things get better.


“In terms of the broader global market where we’re a little of two-thirds of the way down, there’s still some instability to come through. It may take another six months. It’s still very uncertain that we would be gearing up for more significant activity in 2009, but that could be brought back a quarter to the last quarter of this year,” he said.


Other market-watchers noted that the general easing of liquidity once the sub-prime issue works its way through the system will also give REITs a boost.


Justin Chiu, Executive Director of Cheung Kong Holdings, said: “Right now, because of higher liquidity problems, REIT operators do have problems with borrowing. REIT unit prices have dropped quite a bit so expected yield is higher for investors. But as market consolidates, yield will compress once more, making it easier to make further acquisitions. I expect new REITs will come into the Singapore market in the next six to 12 months.”


REITs have enjoyed a honeymoon period in Asia since the first one was launched in 2001. But they have sold off more than 15 percent in value since last year.


Still, most market-watchers are positive that fundamentals continue to be relatively good for most real estate companies around the world.


Source: Channel NewsAsia

Mapletree and Arcapita form joint venture to hold JTC industrial portfolio

Mapletree and Arcapita form joint venture to hold JTC industrial portfolio


SINGAPORE: Mapletree Investments has formed a joint venture with Arcapita Bank of Bahrain to hold a portfolio of industrial properties bought from JTC Corp.


The assets are worth a combined 1.7 billion Singapore dollars.


Arcapita will hold a 56.5 per cent stake in the joint venture called Mapletree Industrial Trust (MIT).


Mapletree will own 25.1 per cent, while the rest will be held by Mapletree Industrial Fund, a pan-Asian private real estate industrial fund sponsored by Mapletree.


In a statement, Mapletree said the acquisition of JTC’s industrial property portfolio, which was announced in April, has been completed.


The properties include 39 blocks of flatted factories, 12 amenity centres, three multi-tenanted business park buildings and one warehouse building.


The assets have been officially transferred to MIT on July 1.


Mapletree Industrial Fund Management will manage the properties. – CNA/vm


Source: Channel NewsAsia

A-Reit targets $5b portfolio size by 2010

A-Reit targets $5b portfolio size by 2010

Unitholders approve issuing new units, convertibles to add to financing options


ASCENDAS Real Estate Investment Trust (A-Reit) is looking to invest some $500 million in industrial properties and business space each year to reach its target portfolio size of $5 billion by the end of 2010.


A-Reit will expand its portfolio through development projects and yield-accretive acquisitions.


The annual investment target is achievable, said Tan Ser Ping, CEO of A-Reit manager Ascendas Funds Management (S) Ltd. A-Reit’s latest investment has been the $246.8 million purchase of 31 International Business Park, Creative Technology’s headquarters building in Jurong East.


A-Reit unitholders yesterday approved a general mandate to issue new units or convertible securities in the financial year ending March 31, 2009. ‘This mandate would provide A-Reit with the necessary financing flexibility to respond to market opportunities,’ said Mr Tan.


Nevertheless, ‘the manager does not expect any immediate need to utilise the mandate to either issue new equity or debt securities such as convertible bonds’, he said.


To diversify funding sources, A-Reit is also putting in place a medium-term note issuance programme, Mr Tan told BT. This should be ready by the end of the third quarter or early fourth quarter.


With a gearing level of around 38 per cent in March, A-Reit also has debt capacity for near-term investments, Mr Tan said. ‘Access to capital is more difficult now, but … the better Reits, including A-Reit, have still got strong support from banks. Our existing banking lines are intact.’


Mr Tan believes that rental growth for business and science park properties and hi-tech industrial properties will remain healthy in A-Reit’s current financial year – rents for business and science park properties, for instance, are likely to grow by around 15 per cent.


However, he points out that uncertainty in the global economic environment will continue to cast a shadow over local conditions.


A-Reit units fell four cents yesterday to close at $2.21. CLSA issued a ‘buy’ call on the counter last week.


Source: Business Times

Allco REIT gets go-ahead to build hotel at China Square Central

Allco REIT gets go-ahead to build hotel at China Square Central


SINGAPORE : Allco Commercial REIT has been given the green light to build a 10-storey hotel with about 350 rooms at China Square Central.


The Urban Redevelopment Authority (URA) has granted Allco REIT permission to add 16,000 square metres of gross floor area to the development in the central business district.


The development currently consists of a 15-storey office block and 38 conservation shop house units.


Allco REIT has also been granted permission to convert some existing car parks into office space.


The URA approval is valid for six months starting from the end of June. – CNA/ms


Source: Channel NewsAsia

Suntec REIT secures S$400m to refinance its bridging loans

Suntec REIT secures S$400m to refinance its bridging loans


SINGAPORE: Suntec REIT has secured a S$400 million loan to refinance its bridging loans.


It will be carried out through an unsecured club loan facility from a panel of banks.


The facility is for a period of three years.


The loan will help Suntec refinance an outstanding loan after its acquisition of one third of the One Raffles Quay building in the central business district.


With this new deal, Suntec REIT will not need additional refinancing until financial year 2009. – CNA/vm


Source: Channel NewsAsia