Net profit falls for Mapletree Investments

Signage for Mapletree Business City, operated by Mapletree Investments Pte, outside an office building in Singapore.
Signage for Mapletree Business City, operated by Mapletree Investments Pte, outside an office building in Singapore.PHOTO: BLOOMBERG

Earnings take a hit from lower revaluation gains, but underlying performance still strong

Mapletree Investments yesterday reported lower profit for its last financial year as earnings took a hit from lower revaluation gains that reflected the challenging business environment.

Still, its underlying performance remained strong as very positive signs emerged for the property group, with growth in its recurring income and ongoing investments in overseas markets.

In the 12 months to March 31, Mapletree's net profit dropped 3.8 per cent year on year to $965.2 million, the firm reported yesterday. This came as gains from asset revaluation dropped from $545.9 million in financial year 2015 to $404.1 million this year.

The top line, however, remained robust, with revenue growing 15 per cent to $1.88 billion, due partly to contributions from new market assets in the United States, Australia and Europe.

Mapletree is not listed but the group is the asset sponsor and manager of four Singapore-listed real estate investment trusts (Reits): Mapletree Logistics Trust, Mapletree Industrial Trust, Mapletree Commercial Trust and Mapletree Greater China Commercial Trust.

In all, Mapletree's assets under management totalled $34.7 billion at the end of the financial year, up 22.3 per cent from 2015.

  • AT A GLANCE

  • REVENUE:
    $1.88 billion (+15%)

    NET PROFIT:
    $965.2 million (-3.8%)

    ASSETS UNDER MANAGEMENT:
    $34.7 billion (+22.3%)

Returns remain strong with return on equity at 9.6 per cent, and averaging 10.2 per cent over two years from 2015 - the start of Mapletree's new five-year business plan.

"We are pleased with our performance, which is set against the backdrop of an economic slowdown in Asia, our core market," said Mapletree group chief executive Hiew Yoon Khong.

"Importantly, we set out to raise the proportion of recurring earnings when we embarked on our new five-year business plan in financial year 2015, and we have made strong progress towards that objective," he added.

Growing recurring earnings is a priority for many Singapore real estate firms amid a stagnant property market in Singapore.

For Mapletree, its recurring profit made up 54.8 per cent of the group's total, up from the five-year average of 39.9 per cent.

Part of this growth came from further geographical diversification. In the latest financial year, Mapletree bought six corporate lodging and serviced apartments in Australia and the US, and five office buildings in Australia. In Europe, Mapletree bought four office properties and a student housing portfolio in Britain and an office building in Germany.

Back in Asia, Mapletree is looking to tap fresh opportunities in Vietnam, where the development of Saigon South Place continues. In China, some $1 billion has been invested in 18 logistics projects.

The Mapletree Business City II in Singapore, the second phase development of its flagship business park project here, got its temporary occupation permit in April and is nearly 50 per cent committed.

A version of this article appeared in the print edition of The Straits Times on June 01, 2016, with the headline 'Net profit falls for Mapletree Investments'. Print Edition | Subscribe