SINGAPORE – Mapletree Investments Pte Ltd (“Mapletree” or “the Group”) is pleased to announce a net profit of S$1.02 billion in Financial Year 2020/2021 (“FY20/21”) which ended 31 March 2021, before a one-off accounting gain from the deconsolidation of Mapletree Industrial Trust (“MIT”). Including the one-off accounting adjustment, the Group recorded a net profit2of S$1.85 billion, a 4% increase from the previous financial year. The resilient performance underscored the strong focus on operations and capital recycling efforts, complemented by some S$175 million in revaluation gains. The Group’s profit is underpinned by its significant exposure to sectors that continue to show growth through the pandemic.
FY20/21’s revenue fell 29.4% year-on-year (“y-o-y”) to S$2,735.9 million in FY20/21 due partly to the accounting treatment from the deconsolidation of MIT and the weaker performance of Mapletree’s retail and lodging assets. However, effective Group-wide cost containment measures have helped cushion the negative impact of Covid-19. The Group’s assets under management (AUM) increased 9.6% to S$66.3 billion in FY20/21.
Mapletree’s EBIT + SOA3, whose largest contributors are the four Singapore-listed REITs, was at S$1,862.9 million. Recurring PATMI remains strong at S$633.3 million with contributions from existing portfolios and further enhanced by full-year contributions from data centre assets in the United States (“US”) and commercial assets in Global Technology Park in Bengaluru, India. The Group reported a ROE1and ROIE4of 10.6% and 8.6% respectively in FY20/21.
As at FY20/21, the Group had strong cash reserves of S$2,021.3 million and reduced its net gearing ratio by two percentage points to 60.5%. Shareholder’s funds have also increased by 9.8% to S$17,660.1 million.
Mr Hiew Yoon Khong, Mapletree’s Group Chief Executive Officer said, “Mapletree delivered another set of robust results despite the overall weakened business sentiment. Undoubtedly, Covid-19 has brought about near to medium-term challenges; however the Group’s good operating performance has shown the resilience of our business model and strategies. During the year, we continued to deploy a significant amount of capital amounting to S$2.3 billion into the logistics and data centre sectors. These sectors, which have outperformed other asset classes during the pandemic period, contributed some S$596.2 million or 32% to the Group’s EBIT + SOA3. We will continue to firstly, focus on managing and improving our operating performances of our assets; secondly, sourcing, investing and developing assets which will deliver attractive and consistent returns globally in identified developed as well as developing markets; thirdly, strengthening our financial position by prudent capital management including monetisation of assets through syndication efforts. With these strategies being executed, we are on track to achieve the targets set in our current Five-Year Plan”.
In FY20/21, the Group expanded its office portfolio with several acquisitions in North America, South Korea and the Netherlands at a total transaction value of approximately S$1.8 billion. Mapletree also made its maiden entry into the India logistics sector with the acquisition of a total gross floor area (“GFA”) of 103,268 square metres (“sqm”) of warehouse spaces. In addition, several land plots were acquired for residential development in China, logistics development in Kyushu, Japan and Brisbane, Australia, as well as for the development of its first data centre in Hong Kong SAR. The total investment including development amounted to S$3.7 billion in FY20/21.
In line with building scalable capital management platforms, the Group syndicated its first European office fund, Mapletree Europe Income Trust (“MERIT”) in March 2021, which successfully raised EUR507 million (~S$812.9 million). MERIT is fully invested at closing and owns seven Grade A office assets worth EUR1.2 billion (~S$1.9 billion) in key growth cities across Europe and the United Kingdom. The Group also executed several capital recycling initiatives in support of its stable of listed REITs, including (1) a S$1.1 billion portfolio of logistics properties in China, Malaysia and Vietnam as well as the remaining 50% interest in 15 China facilities to Mapletree Logistics Trust (“MLT”), and (2) the remaining 60% stake in Mapletree Redwood Data Centre Trust which holds 14 data centres in the US to MIT for US$494.0 million (S$662.0 million). The total amount of capital recycled in FY20/21 amounted to S$3.1 billion.
Added Mr Hiew, “Mapletree continues to receive strong interest from investors for our private funds which deliver good long-term investment performance. Going forward, the Group will continue to assess investors’ appetite and market demand and aim to launch new funds across various markets and asset classes. These include a US office fund, a China-focused fund, and a second US logistics fund. The Group may also look into putting together suitable portfolios into the REIT market in the coming years. Our investment opportunity pipeline looks healthy and we are confident of sourcing for quality investment assets for our various public and private platforms.”
Underpinning the Group’s further expansion in the various markets involves having a strong team on the ground to source for opportunities as well as to execute asset and property management of our assets. Mapletree will continue to grow its onshore offices with local talents in new locations to support our expansion plans. Currently, Mapletree has 22 offices in 13 markets globally.
Additional information on key highlights in FY20/21:
Mapletree made its maiden entry into the India logistics sector in May 2020 through a forward purchase agreement to acquire three warehouses of about 58,818 sqm of GFA in Chakan, Pune, scheduled for completion by Q2 2022. In February 2021, the Group further acquired an additional estimated 44,450 sqm of fully completed warehouses adjacent to these assets. In addition to Mapletree's existing office assets in Bengaluru, Chennai and Pune, the Group expanded its commercial footprint to include Mumbai, with the acquisition of approximately 25,516 sqm of land for office development.
Through a joint acquisition with Mapletree North Asia Commercial Trust (“MNACT”), the Group co-invested in The Pinnacle Gangnam, a freehold office building in Seoul, South Korea for KRW452 billion (~S$535.1 million) in October 2020. The property has direct access to an underground subway station, providing excellent connectivity to the Seoul metropolitan area.
In the US, Mapletree acquired 11 office buildings in Raleigh, North Carolina in September and November 2020; Uptown Station in Oakland, California in March 2021; and Galatyn Commons, a four-building office portfolio in Richardson, Texas in April 2021. These acquisitions broaden Mapletree’s exposure in the US commercial market with a total investment value of US$1 billion (~S$1.3 billion). In Europe, Mapletree marked its first foray into the Dutch commercial market with the acquisition of six office buildings in Papendorp Park in Utrecht for EUR147 million (~S$235.7 million) and these assets form part of the MERIT fund portfolio.
Strong Capital Management
As at 31 March 2021, the Group’s total funds under management was approximately S$26 billion, an increase of 10.6% y-o-y. In addition to MERIT, which is Mapletree’s 11thprivate equity fund, the Group had also syndicated Mapletree US & EU Logistics Private Trust (“MUSEL”) in April 2020, MUSEL closed at approximately S$1.8 billion in total fund equity and is seeded with 262 logistics assets across 26 states in the US and 20 cities in seven European countries.
In June 2020, Mapletree’s Japan logistics development fund (MJLD) was fully realised, achieving a return of 1.8 times equity multiple and a net internal rate of return (IRR)5of 23.7%.
On the public market, the Mapletree-listed REITS – MLT, MIT, Mapletree Commercial Trust and MNACT generated healthy total returns of 27.4%, 17.9%6, 21.0% and 37.5%7respectively. Through private placements, MIT and MLT raised S$410 million and S$500 million respectively. MLT also raised an additional S$144 million via a preferential offering.
In terms of logistics developments, the Group acquired a prime land parcel measuring 116,431 sqm in Kyushu, Japan in November 2020. Upon completion in Spring 2024, it will be Kyushu’s largest logistics warehouse with two blocks of multi-storey logistics facilities at a combined GFA of 231,956 sqm.
In November 2020, Mapletree completed the acquisition of a 36.3-hectare site in Crestmead, Brisbane, Australia which will be developed into Mapletree Logistics Park – Crestmead. The project will deliver approximately 200,000 sqm of high-grade logistics warehousing and office space across nine buildings.
In China, the Group added 16 completed logistics parks to its portfolio in FY20/21. A total of 48 projects are currently under development, including 12 newly acquired sites. As at 31 March 2021, Mapletree operates 58 logistics properties spanning 39 cities in China, covering a total net lettable area (“NLA”) of about 4.2 million sqm.
Other logistics developments include a Grade A, four-storey ramp-up warehouse facility in Shah Alam, Malaysia, which will yield 130,000 sqm of GFA upon completion by end-2022. In addition, with the completion of several logistics parks in northern and southern Vietnam, a total GFA of approximately 440,000 sqm will be added to the portfolio. Mapletree is acquiring another 39.5-hectare site in northern Vietnam to develop some 250,000 sqm of logistics facilities.
In February 2021, Mapletree acquired a land plot for HK$813 million (~S$140.4 million) in Hong Kong SAR which will be developed into the Group’s first data centre in the city. Slated for completion by 2023, the approximately 4,000 sqm site will be developed into a high load data centre capable of delivering up to 50MVA of building power.
In Singapore, The Reef at King’s Dock, jointly developed by Mapletree and Keppel Land is a 429-unit landmark waterfront residential property situated in the HarbourFront precinct. As at 31 March 2021, 80% of total units have been taken up.
With 43,282 sqm of GFA across six office buildings, Papendorp Park in Utrecht is one of the properties in MERIT’s portfolio. The buildings were 99% occupied as at December 2020.
The Group acquired a portfolio of 11 office properties totalling an NLA of ~110,400 sqm in Perimeter Park, North Carolina, the US.
Mapletree Yinchuan Logistics Park, which has an NLA of 74,823 sqm, is one of the 58 logistics properties completed in China in FY20/21.
1 ROE denotes return on equity and is computed based on PATMI attributable to Equity Holder of the Company over shareholder’s funds.
2 PATMI denotes net profit after tax and non-controlling interests attributable to Perpetual Securities Holders and Equity Holder of the Company.
3 Earnings 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.
4 ROIE is computed based on adjusted* PATMI over the Group’s equity held at original invested cost (“OIC”). *Adjusted to exclude non-cash and non-operating items such as unrealised revaluation gains or losses mark-to-market fair value adjustments, gain and losses on foreign exchange, negative goodwill and dilution gain and loss and include OIC gains from any gains or losses on disposal and corporate restructuring surplus or deficit.
5 After expenses, taxes and base management fee but before carried interest.
6 Sum of distributions and capital appreciation for the period over the closing unit price of S$2.430 as at 31 March 2020.
7 Sum of the percentage increase in unit price and total distribution yield for the period. Total distribution yield for FY20/21 is based on available DPU to Unitholders of 6.175 Singapore cents for FY20/21 over closing unit price of S$1.06 as at 31 March 2021.