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54. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
SOUTH EAST ASIA AND GROUP RETAIL
The South East Asia and SINGAPORE COMMERCIAL divested in November 2019 to MCT,
adding another quality asset in
Group Retail business MCT's portfolio.
Creating value through renewal
unit develops, invests in and rejuvenation
and manages eight asset Mapletree embarked on the adaptive VIETNAM
reuse of St James Power Station at
classes (office, retail, the HabourFront Precinct to create Growth and stability
business parks, residential, a new business destination at the Mapletree’s portfolio of high-quality
serviced apartments, hotel, prime part of the Greater Southern commercial assets in central Ho
Waterfront. When completed, it will Chi Minh City (HCMC) and Hanoi
industrial and warehouses) become the new global headquarters continued to enjoy high occupancies
in the region, to establish of Dyson, a leading international and positive rent reversions. Asset
a platform for sustainable technology company. The restored enhancement initiatives at SC VivoCity
monument will also house a heritage increased net lettable area (NLA) and
returns. gallery and a heritage trail featuring created space for new anchor tenants.
maritime artefacts.
The hospitality assets also saw
The business unit generates
Land at the site of the former SPI improvements in room rates.
income for the Group Building has been reclaimed for InterContinental Hotel performed
through its portfolio of future development. Planning well, clinching Vietnam's Leading
permission for the residential site at Hotel and Vietnam's Leading Business
operating assets, as well as King’s Dock has been obtained and Hotel in the World Travel Awards
through various investment further design of the development 2019. However, the restriction
and capital management and construction of the sales gallery of international travel and social
is in progress. distancing measures as a result of
activities including a real the Covid-19 pandemic impacted
estate mezzanine fund and The success of Mapletree Business the hospitality sector in the last two
development profits. City II (MBC II) marked the months of the fiscal year.
completion of the transformation of
Alexandra Precinct into a premium Mapletree’s residential project in
As at 31 March 2020, business hub. Interest in MBC II Vietnam, One Verandah, obtained
made it an ideal acquisition target for its Temporary Occupation Permit
the combined real estate
Mapletree Commercial Trust's (MCT) in April 2020 and is on schedule
portfolio totalled S$3.7 portfolio. The asset was successfully for handover.
billion across Singapore,
Vietnam and Malaysia. In
Financial Year 2019/2020
(FY19/20), the business unit
contributed S$261.1 million
to the Group’s EBIT + SOA1.
Fee income contributions
were S$0.9 million.
Prime Minister Lee Hsien Loong featured MBC II, and the potential of the Greater Southern
WaterFront, in the 2019 National Day Rally. The success of MBC II has led Alexandra Precinct to
be the home of the best global companies and recognised as an established business precinct.
(Photo: Ministry of Communications and Information of Singapore)
55.
FY19/20 also saw the completion and
successful lease-up of the Build-to-
Suit facility and new phases of the
industrial park at Binh Duong.
MALAYSIA
Mapletree provides mezzanine loan
financing for three residential projects
in Kuala Lumpur (KL) and Selangor.
28BLVD and Lexa Residence are
fully sold and have already obtained
vacant possession.
Through the amalgamation and extension of shop units and lease lines, additional NLA was created at
COVID-19 PANDEMIC SC VivoCity, Vietnam.
The pandemic took a toll across many
countries as it spread throughout Asia domestic product (GDP) growth Office. Vacancies remain elevated
from January 2020. forecast a second time to be between at 8.2% for the non-central business
-7% and -4% for 2020. district retail sector, and about
Our priority has been to safeguard the 72,207 sqm of supply is expected to
health and welfare of staff, tenants According to the Urban complete in 2020.
and the community. Assistance to Redevelopment Authority, retail
support tenants has also been vacancy rates rose to 8%, while rentals Vietnam’s hospitality sector saw a
rolled out. fell by 2.3% in Q1 2020, from the 48.8% fall in foreign visitors for the
2.3% increase in the previous quarter. first five months of 2020. Overall
The larger impact of Covid-19 will be Despite rental reliefs, Covid-19 is occupancy rates for HCMC declined
felt and seen in FY20/21 as respective expected to greatly affect retail in 2020. to 48%, due to the overhang from
governments roll out enforcements the restriction of international air
of Covid-19 measures, from social Vietnam travel and contraction in the global
distancing, travel restrictions, closures The Covid-19 pandemic saw economic outlook.
and lockdowns of varying degrees. Vietnam’s GDP growth rate decline to
3.8% y-o-y in Q1 2020, while inflation Malaysia
Retail and hospitality businesses rates fell to 2% y-o-y, the lowest rate Malaysia’s GDP growth slowed
will remain the more impacted of increase in several years. Over the to 4.3% in 2019, from 4.7% in
asset classes. same period, registered foreign direct the previous year. To reduce the
investment reached US$8.6 billion, significant amount of unsold
Mapletree initiated a programme in completed condominium and
representing a 20.6% decline y-o-y.
February 2020 to deliver free lunch to apartment stocks in KL and Selangor,
our frontline healthcare care workers HCMC Grade A office occupancies the price threshold for foreigners
to encourage and show support to contracted by 4.3 percentage points was lowered from MYR1 million to
them. The meals provided were from to 92.7% due to the addition of MYR600,000 in 2020.
Mapletree's tenants and was one 141,743 square metres (sqm) of
of the first measures of helping our new office buildings.
tenants affected by slower business 1 Earnings before interest and tax (EBIT)
due to Covid-19. Notwithstanding the increase in plus share of operating profit or loss
of associated companies and joint
supply, the stock of international- ventures (SOA), excluding residential
MARKET REVIEW AND grade office buildings in HCMC profits, incentive fee from private funds’
divestment, revaluation gains or losses,
OUTLOOK remains limited and this should divestment gains or losses, foreign
support rents and occupancies exchange and derivatives gains or losses.
Singapore moving forward.
Based on data from the Ministry References:
of Trade and Industry (MTI), the In Hanoi, Grade A office vacancy i. Ministry of Trade and Industry, Singapore
Singapore economy contracted reached 8.3%. Another 126,000 sqm ii. Ministry of Planning and Investment,
0.7% year-on-year (y-o-y) in Q1 is expected to be added in 2020 General Statistics Office of Vietnam
2020, reflecting the fall in external and this should weigh on the rental iii. URA Realis
demand and supply chain disruptions outlook for the foreseeable future. iv. BNM Quarterly Bulletin
from policies implemented by v. NAPIC
governments worldwide to curb Retail sales declined 4.8% y-o-y for vi. CBRE Reports
the Covid-19 outbreak. MTI had the first five months of 2020, based vii. Knight Frank Report
also downgraded Singapore’s gross on reports from the General Statistics viii. JLL REIS
56. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
LOGISTICS DEVELOPMENT
Mapletree’s Logistics CHINA VIETNAM
Development business unit As at 31 March 2020, Mapletree has Mapletree Logistics Park Bac Ninh
develops and manages 87 logistics properties2 spread across Phase 3, located in north Vietnam,
53 Chinese cities, with a total net was completed in May 2019. The
the Group's logistics
lettable area (NLA) of over 6 million Grade A logistics facility which spans
development projects. It square metres (sqm). In FY19/20, 47,732 sqm of GFA, attracted healthy
oversees a strong portfolio Mapletree acquired 27 sites with demand from established 3PLs and
a total investment value exceeding achieved 100% occupancy upon
of 38 logistics facilities in S$1.6 billion. completion. Development of Phases
China, Malaysia, Vietnam 4 and 5 is underway and they are
and Australia, valued at MALAYSIA slated for completion in May 2021.
S$2.6 billion as of 31 March Mapletree acquired two industrial Mapletree also completed the
2020. In Financial Year sites in Shah Alam, Selangor, Malaysia, acquisition of a 28.2-hectare (ha)
in November 2019. This area serves site in Yen My Industrial Park,
2019/2020 (FY19/20), the Greater Kuala Lumpur and is highly Hung Yen Province. The proposed
business unit contributed sought after by third-party logistics logistics park is supported by
S$57.6 million and S$3.1 operators (3PLs) and end-users for well-developed infrastructure and
domestic distribution and last- highways connecting to Hanoi and
million to the Group’s EBIT mile delivery. the Hai Phong seaport. Development
+ SOA1 and fee income commenced in February 2020 and
The first site covers 61,491 sqm and the first of three phases is expected
respectively. will be redeveloped into a four-storey to yield 60,566 sqm of GFA (out of
ramp-up warehouse facility with a total GFA of 177,134 sqm) when
128,585 sqm of gross floor area (GFA). completed in August 2021.
The second site occupies a land area of
157,034 sqm and will be redeveloped In the south, Mapletree commenced
into three blocks of four-storey ramp- the construction of Mapletree
up facilities with a combined GFA of Logistics Park Binh Duong Phase 4
342,020 sqm. Permodalan Nasional in December 2019. Located at the
Berhad, one of the largest fund intersection of major highways with
management companies in Malaysia, access to seaports and Ho Chi Minh
holds a 30% stake in this project. City, the property's easy accessibility
allows it to cater to both domestic
In December 2019, Mapletree consumption and import-export
Logistics Hub - Shah Alam, that is logistics. With its strategic location
under Mapletree’s existing portfolio, and growing market demand, the
was acquired by Mapletree Logistics development has secured strong pre-
Trust (MLT) for MYR826 million leasing commitment for 76% of NLA
(~S$272 million).
Mapletree Logistics Hub - Tanjung Pelepas, Iskandar, located in the Port of Tanjung Pelepas, Malaysia,
comprises two blocks of two-storey ramp-up warehouses and a block of one-storey warehouse with
total GFA of approximately 133,000 sqm.
57.
from end-users and 3PLs. The 61,696
sqm general warehouse is expected
to be completed in October 2020.
Mapletree Logistics Park Bac Ninh
Phase 2 and Mapletree Logistics
Park Binh Duong Phase 1 were
acquired by MLT for US$36 million
(~S$49.9 million) in November 2019.
AUSTRALIA
Mapletree established AlexandraLog
AUS Assets Pty Ltd in October 2019 to
spearhead its logistics development
Mapletree Logistics Park Bac Ninh Phase 3, a Grade A logistics facility in Vietnam, was completed in
in Australia. The acquisition of a May 2019.
36.3-ha site in Crestmead, Brisbane,
Queensland, is scheduled for
completion in September 2020. 29.8% of total warehouse space in macroeconomic fundamentals and a
established industrial areas of Klang robust domestic consumption market.
With excellent access to the Logan Valley and Johor Bahru respectively.
Motorway, as well as Brisbane city, port In both areas, warehouse space is While the Covid-19 situation has
and airport, the proposed logistics park at almost 100% occupancy. These brought significant headwinds to
will be developed over four phases to factors support a promising outlook the Australian and global economy,
provide a total GFA of 191,888 sqm. for logistics properties. While the logistics sector is expected to
Covid-19 has affected cross-border remain relatively resilient, driven by
MARKET REVIEW AND trade and selected industries, the sustained population growth and rising
OUTLOOK recently announced RM250 billion online retail penetration. In particular,
stimulus package is likely to ease its supermarket and e-commerce tenants
China are benefitting from strong sales
dampening impact on the economy.
By the end of 2019, China's growth as more people stay at home
premium warehouse stock reached due to social distancing measures. In
Vietnam
approximately 60 million sqm. addition, government infrastructure
Vietnam’s economy grew by 7%
Nationwide, while the average vacancy investments to boost the efficiency
in 2019, which was mainly driven
rate rose to 12.1%, rental growth of national freight and supply chains
by increased exports and private
remained healthy in most markets. will continue to play a significant role
consumption. The World Bank
forecasts a gross domestic product in Queensland’s long-term growth.
More diversified industries such
growth of around 6.5% for Vietnam Upcoming infrastructure developments
as e-commerce and retail have
underpinned the demand for high- over the next few years. include improvement and expansion
quality warehouse space in China. works for Brisbane Airport, and
Activity by retail and trade enterprises Growth in demand for logistics Brisbane Port, as well as a new
picked up, with e-commerce and 3PLs warehousing has been driven by inland freight rail between Melbourne
accounting for more than 70% of new manufacturing activities for exports, and Brisbane. These investments in
leases signed. Despite the economic booming e-commerce and retail physical infrastructure to support and
fallout from Covid-19, the fresh food sales. Recent global disruptions such facilitate logistics activities, combined
and cold chain sectors may see faster as the United States-China trade with the continued growth in the
growth, whereas the e-commerce and war and Covid-19 have encouraged e-commerce market, are expected
express delivery sectors are expected businesses to re-configure and to sustain the demand for warehouse
to stay resilient. diversify their supply chains. Vietnam, space in the region.
with its established infrastructure and
Malaysia production networks, will benefit from
The Malaysian economy expanded the supply chain shifts. In addition, the
by 3.6% in Q4 2019, its weakest growing demand for convenience,
in a decade, while growth for such as on-demand delivery of fresh 1 Earnings before interest and tax (EBIT)
the year was 4.3% (2018: 4.7%). goods, has spurred the development of plus share of operating profit or loss
The healthy growth rates of the of associated companies and joint
end-to-end cold-chain networks and ventures (SOA), excluding residential
e-commerce and retail trade sectors demand for cold stores in the country. profits, incentive fee from private funds’
nevertheless contributed to a higher divestment, revaluation gains or losses,
demand for warehouse space. This Australia divestment gains or losses, foreign
exchange and derivatives gains or losses.
is accompanied with a notable Queensland’s economy is projected
2 Of the 87 properties, 15 are held under
lack of Grade A warehouse stock to outperform the national average joint ventures between Mapletree Invesments
which accounts for only 12.1% and over the next 10 years, due to strong and MLT.
58. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
CHINA AND INDIA
Mapletree’s China and QUALITY DEVELOPMENTS In January 2020, mTower Beijing, an
WELL RECEIVED IN CHINA international Grade A office building
India business units seek located within the Lize Financial
to capitalise on real estate In Foshan, handover of the second Business District, was handed over.
opportunities in these two construction phase of Nanhai The 24-storey building with LEED for
Business City Phase 4 started in Core and Shell Gold certification, has
large emerging markets. October 2019. Nine out of the 12 a total gross floor area (GFA) of about
residential blocks have launched 51,000 square metres (sqm). Catering
for sale since August 2018. As at to the new economy financial
The business units develop, industries, mTower Beijing will be
31 March 2020, nearly 90% of the
invest and manage real units had been sold. The Education directly next to major transportation
estate assets in China and Zone is fully operational, including hubs with three subway lines – Line
Crestar Kindergarten, Etonhouse 14, Line 16 (under construction) and
India, and oversee two International School, Guangwai New Airport Line (under planning),
private real estate funds, International Testing Center and as well as an underground link to
Mapletree Training and Development the City Terminal (under planning).
namely Mapletree India
Center. As at 31 March 2020, the Upon completion of the City
China Fund (MIC Fund)1 Education Hub office achieved Terminal and New Airport Line, the
and Mapletree China a 90% commitment rate. Beijing Daxing International Airport
will be a 20-minute ride from the
Opportunity Fund II The divestment of VivoCity Nanhai, property. mTower Beijing is within
(MCOF II). which is the retail mall component of 5 kilometres (km) proximity to Beijing
Nanhai Business City, was completed South Railway Station and Beijing
on 10 March 2020 despite the West Railway Station, 2 km direct
As at 31 March 2020, the Covid-19 pandemic. access to West 2nd Ring Road and
business units accounted 7 km from Finance Street. Within a
Mapletree Ningbo Mixed-Use 3 km radius, mTower Beijing enjoys
for S$2.7 billion of the the full benefits from surrounding
Development Phase 1 (residential
Group’s total assets under and retail) successfully obtained amenities which include a five-star
management. In Financial its occupation permit (OP) in June hotel, luxurious shopping mall and
2019. In addition to the 13 residential apartments, among others.
Year 2019/2020 (FY19/20), blocks which have been fully sold
the business units’ and 99% handed over, more than In March 2019, Mapletree acquired
90% of parking space has also been mPlaza Guangzhou, an office building
combined EBIT + SOA2 with a GFA of about 100,000 sqm.
sold. Phase 2 (retail mall) and Phase 3
was S$55.2 million, while (medical centre) topped out in May The asset, which is currently being
fee income contributions 2019 and July 2019 respectively. prepared for handover, will target
Both phases are expected to obtain e-commerce, telecommunications
were S$107.2 million. their OP in Q3 2020. and business service companies.
A night view of Mapletree Ningbo Mixed-Use Development Phase 1.
59.
Located at the Pazhou area, the India
asset is serviced by multiple metro The Indian economy grew by 5.6%
lines, with the area designated by in the first half of 2019 and slowed
the Guangzhou Government as to 4.7% by the end of the year. The
an artificial intelligence and digital services sector contributed 3.8% to the
economy pilot zone featuring high total growth, whereas manufacturing,
quality projects by Alibaba, Tencent, construction and the automobile
Xiaomi etc. industry were impacted negatively.
In response, the Government
AN EXPANDING FOOTPRINT implemented measures to boost
IN INDIA demand and improve the ease of doing
Existing tenants at Global Technology Park business. These included reducing
in Bengaluru continued to increase their
Mapletree’s maiden investment space demand, adding up to a total leasing of
the corporate tax rate from 30% to
in India was the acquisition and 50,429 sqm NLA in 2019, bringing the asset's 22%, reducing repurchase agreement
overall occupancy to approximately 99.1%. rate by 135 basis points to about 5.2%
development of Global Technology
Park in Bengaluru in 2011. Since then, as well as the removal of dividend
the Group’s presence in India has distribution tax on companies and
expanded to other key office markets MARKET REVIEW AND capital expenditure of an estimated
of Chennai and Pune, with overall OUTLOOK INR2 trillion on infrastructure.
office vacancy rates under 10%. The
office portfolio now comprises a net China India's real estate market continued
lettable area (NLA) of approximately Despite having the slowest gross to perform in 2019, attracting
631,740 sqm across the projects. domestic product (GDP) growth in approximately US$5 billion in private
three decades due mainly to trade equity investments. New supply
tensions with the United States, and net absorption of office space
In December 2019, the Group
China’s real estate market remained increased year-on-year by 45%
acquired its first development
largely active in 2019. Shanghai, the and 40% respectively. Four out of
project in Pune, Maharashtra with
country’s largest institutional real the six largest cities saw vacancies
the acquisition of a 7.7-acre land
estate market, recorded a fourth under 10%.
parcel. The site is prominently
located within the established office consecutive year of over
RMB100 billion in transaction value India’s GDP forecast is revised
micro-market of Kharadi. Planned
of en-bloc commercial properties. downward from 1.9% to between
as a Grade A commercial office
However, concerns over the trade war 0% and -3% for FY2021 in light of
development, this will be Mapletree’s the Covid-19 situation. Repurchase
began to weigh on sentiment in the
second development project in India agreement rate was further reduced
second half of the year.
after successfully completing Global by 75 basis points to 4.4%. Services
Technology Park in Bengaluru. Yields were stagnant during the year, – especially the retail, aviation and
owing to downward pressure on entertainment sectors – are expected
At Global Infocity Park Chennai, one of rentals and capital values from new to steeply contract. Deferment in real
the major tenants continued to expand completions. Offices in emerging and estate office demand and slowdown
its space requirements, occupying decentralised business locations are in investments are expected,
approximately 12,350 sqm. Other becoming better positioned to attract accompanied by likely compression in
key leases secured during the tenants for cost savings, particularly yields due to drop in interest rates.
financial year included a leading in the post Covid-19 operating
international bank which opted for environment.
an additional 6,600 sqm and a
In the aftermath of the Covid-19 1 MIC Fund was fully realised in April 2020.
fintech firm which expanded by
outbreak in China, the government 2 Earnings before interest and tax (EBIT)
another 4,900 sqm. New options plus share of operating profit or loss
were also added to the food and has pushed for business resumption of associated companies and joint
beverage space. and resorted to pump priming. The ventures (SOA), excluding residential
disruption to the property market profits, incentive fee from private funds’
divestment, revaluation gains or losses,
Existing tenants at Global Technology varies across asset classes, with the divestment gains or losses, foreign
Park, Bengaluru, continued to retail sector being the hardest hit, exchange and derivatives gains or losses.
increase their space demand by while office and residential sectors
leasing an additional 24,585 sqm. face a relatively short-lived business References:
Adding up to a total leasing of 50,429 disruption. The tech sector could be i. Standard Chartered Research
sqm NLA in 2019, the asset's overall the only outperformer because of ii. Government of India
occupancy is approximately 99.1%. its crucial role in containing the virus iii. Reserve Bank of India
and also its significance in China’s next iv. International Monetary Fund
development phase, which involves v. JLL Real Estate Intelligence Services
tech decoupling from the US. vi. Report by Anarock Capital
60. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
AUSTRALIA & NORTH ASIA
The Australia & North Asia AUSTRALIA JAPAN
business unit focuses on Mapletree continued to expand Omori Prime Building and mBAY
deepening Mapletree’s its portfolio of office properties POINT Makuhari, located in Tokyo
presence in Australia, in major Australian cities with the and Chiba respectively, were acquired
addition of 111 Pacific Highway, by Mapletree North Asia Commercial
Hong Kong SAR, Japan and a 24-storey commercial building with Trust at a price of JPY38 billion
South Korea, and explores a net lettable area of approximately (~S$513 million) on 28 February 2020.
18,600 square metres (sqm). The
opportunities in new real
freehold Grade A office building Meanwhile, MJLD, which had
estate asset classes in is strategically located close to investments in 12 logistics facilities
these countries. Sydney's central business district, with a total value of JPY103 billion
Greenwood Plaza Shopping Centre (~S$1.39 billion), was fully divested
and the North Sydney train station. during the financial year. Eleven of
The business unit also The acquisition was completed on the projects were divested to both
manages two private 31 July 2019. foreign and domestic third parties
including real estate investment trusts
equity funds: Mapletree's At its closing on 30 November 2019, (REITs), private funds and corporates.
Japan-focused logistics MASCOT had successfully raised Mapletree Kobe Logistics Centre, its
A$654 million (~S$592.4 million) in 12th project, was divested to Mapletree
development fund (MJLD) equity, with 72.9% of commitment Logistics Trust and the transaction
and Mapletree Australia received from third-party investors closed on 28 February 2020.
Commercial Private Trust including pension funds, insurance
companies, regional banks and Separately, the handover of
(MASCOT). With owned corporates, as well as high net Oakwood Suites Yokohama, a 175-
and managed assets of worth and family office investors. unit Oakwood-managed serviced
MASCOT’s portfolio consists of 10 apartment located in Yokohama, was
S$1.9 billion as at 31 March Grade A office assets featuring high completed on 27 March 2020. The
2020, the business unit occupancy and a well-diversified handover marked the completion of
contributed S$103.7 million tenant base. The properties are the forward purchase made in 2016.
situated in key gateway cities, Occupying the 46th to 51st floors of
to the Group’s EBIT + SOA1, namely Sydney, Melbourne, The Tower Yokohama Kitanaka, the
and S$85.3 million in fee Adelaide, Brisbane and Perth. high-rise development overlooking
the Yokohama Bay is set to commence
income in Financial Year
operations in late 2020.
2019/2020.
111 Pacific Highway, a 24-storey Grade A commercial building, is strategically located close to Sydney's
central business district, Greenwood Plaza Shopping Centre and the North Sydney train station.
61.
MARKET REVIEW AND
OUTLOOK
Australia
In 2019, global investment demand
for Australian real estate continued
to set new benchmarks as total
transaction values for the office
sector exceeded A$20 billion.
As a result of solid real estate
fundamentals, the sector attracted
strong interest from both domestic
and global capital sources including
listed REITs, unlisted funds, private
equity firms and sovereign wealth funds.
Since the start of 2020, the outbreak
of Covid-19 has materially dampened
activity in both the investment and
The handover of Oakwood Suites Yokohama, a 175-unit Oakwood-managed serviced apartment
occupier markets. As Covid-19 in overlooking the Yokohama Bay in Japan, was completed on 27 March 2020.
Australia escalated in March 2020,
national travel bans, lockdowns
and safe distancing measures were The Covid-19 pandemic and renewed been pre-leased with reportedly low
introduced requiring non-essential social unrest pose new downside cancellation rates.
businesses to remain closed. The risks and a further contraction of the
Federal Government also responded Hong Kong SAR economy is expected On the contrary, the outbreak of
swiftly with three economic stimulus in 2020. The heightened uncertainty Covid-19 had seen positive impact
packages equivalent to over adds to challenges already faced by for the logistics sector, with some
A$320 billion. The full impact of the property market and may continue logistics occupiers seeking short-
Covid-19, however, is still uncertain to exert downward pressure on term expansion of spaces to stock up
as containment remains the key to capital values and rentals. merchandise such as daily necessities
economic recovery. As at end April to meet the significant increase in
2020, although Australia achieved Japan consumer demand. In particular, the
notable success in controlling Office vacancies hit historical lows Covid-19 situation is seen to accelerate
Covid-19 domestically, investment in 2019. Major markets including the switch of the main demand driver
activity is expected to remain Sapporo, Saitama, Tokyo, Yokohama, of the sector from third-party logistics
muted until the global contagion is Nagoya, Osaka, Kyoto and Fukuoka to e-commerce occupiers.
contained. Although the occupier recorded vacancy rates of under 1% as
market is also expected to face at end 2019. Due to strong demand,
negative pressure in rents and rents rose in all cities in 2019. Sendai,
vacancies in the short term, the Yokohama, Kanazawa, Kyoto, Osaka,
impact is not expected to be uniform Kobe, and Hiroshima all saw full-year 1 Earnings before interest and tax (EBIT)
with defensive assets better able increases in rent compared to 2018. plus share of operating profit or loss
to weather the downturn. Over of associated companies and joint
the long term, the outlook is more ventures (SOA), excluding residential
The negative impact of Covid-19 is profits, incentive fee from private funds’
positive with underlying demand for projected to be larger than that of the divestment, revaluation gains or losses,
office space supported by continued Global Financial Crisis. Specifically, divestment gains or losses, foreign
growth in population and the creation exchange and derivatives gains or losses.
a delayed leasing market downturn
of new digital and technology jobs. is expected, starting in late 2020
References:
with a more pronounced impact
Hong Kong SAR i. Australia Office Investment, Review and
on secondary grade buildings. The Outlook 2020
Hong Kong SAR slipped into recession Japanese government has since ii. Hong Kong Census and Statistics
in 2019 amid the United States- responded with two stimulus packages Department
China trade war and months of equivalent to a record JPY234 trillion. iii. CBRE 2020 Japan Real Estate Market
anti-government protests. Real gross The Tokyo office leasing market, with Outlook
domestic profit contracted by 1.2% all-grade vacancy at 1% in Q1 2020, iv. CBRE Asia Pacific Real Estate Market
year-on-year, shrinking for the first Outlook 2020
is expected to see some degree of
time in a decade. The lack of Chinese v. CBRE Australia Weekly Research Update
resiliency in prime-grade properties. April 6
investors also reduced market activity, Out of the 200,000 tsubo of Grade A vi. CBRE Japan Logistics Market View Q4 2019
with only a handful of commercial office space scheduled for completion vii. Colliers Tokyo Office Market 2020 Q1
property assets changing hands. in 2020, approximately 90% has Review and Outlook
62. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
GROUP LODGING
Mapletree’s Group STUDENT ACCOMMODATION the US is progressing on schedule.
The new 405-unit/513-bed
Lodging business unit Mapletree's student accommodation accommodation adjoining the
develops, acquires and portfolio – including those held University of Pennsylvania campus
manages the Group’s under MGSA and Mapletree is scheduled for completion and
Investments – comprises a total operational by FY20/21.
global lodging assets (i.e. of 50 Purpose-Built Student
student accommodation, Accommodation (PBSA) assets with SERVICED & MULTIFAMILY
over 22,000 beds located across RESIDENCES
serviced apartments and 33 cities in the United Kingdom
multifamily assets), as well (UK), the United States (US) and Mapletree’s serviced and multifamily
Canada. Including projects under residence portfolio consists of
as grows the Oakwood
development, the total assets under 15 serviced apartments and four
business worldwide. The management (AUM) amount to multifamily assets totalling over 3,800
business unit also includes a approximately S$3.6 billion. units with an AUM of approximately
S$2 billion. Of which, S$1.7 billion is
private real estate fund, the MGSA currently holds 25 assets in the part of Group Lodging’s AUM with
Mapletree Global Student UK and 10 assets in the US, with a total the remaining contributed by other
Accommodation Private AUM of about S$2 billion. As the fund business units. Of the 15 serviced
manager of MGSA, Mapletree optimises apartment assets, 11 are located in
Trust (MGSA). the portfolio returns and maximises the US, two in Japan and one each
asset value through proactive in Australia and Vietnam. Meanwhile,
asset management, operational four multifamily assets are located
With owned and managed improvement and enhancing the in the US. The serviced apartment
assets of S$5.3 billion residents’ experience. assets are located either in dedicated
(excluding Oakwood) as at standalone buildings or part of a
In October 2019, Mapletree larger residential complex.
31 March 2020, the business successfully acquired two PBSA
unit contributed S$61.8 properties totalling 1,127 beds in the The portfolio mix allows for a range
UK. Both are located close to Coventry of fully serviced apartments, mixed
million to the Group’s EBIT University, which ranks among the top serviced/conventional apartments
+ SOA1, and S$32.9 million 15 universities in the UK2. and pure multifamily assets. The
serviced apartments cater to both
in fee income in Financial
Mapletree also completed its first short and extended stay as well as
Year 2019/2020 (FY19/20). UK student housing development business and leisure clientele. On the
project, Westwood Student Mews, other hand, the multifamily assets
in December 2019. The 453-bed appeal to the longer-term residential
development is in close proximity to rental market.
the University of Warwick’s campus,
which is ranked 9th in the UK2. Having a range of products
allows Mapletree to serve the
The construction of Mapletree’s first accommodation needs of different
university housing development in market segments, with the flexibility
to adapt to changing business needs
and environments.
Oakwood operations
Oakwood is the operating arm of
Mapletree, managing both Mapletree-
owned and third-party assets in the
serviced apartment business.
Oakwood’s managed assets
The newly acquired building, Millennium View, include a portfolio of 67 Oakwood-
in Coventry, the UK. branded properties, of which 15
are owned by Mapletree while the
63.
remaining 52 are owned by third government policies, which allow
parties. Geographically, 23 of its for a growth in international student
properties are located in the US numbers over the next decade.
while 44 are in Asia. In FY19/20, the
average occupancy of Oakwood’s Serviced & multifamily residences
managed assets was 86%, with guests In 2019, even though the US
registering more than 2.3 million hospitality sector saw supply
room nights during the year at a increasing more than demand, it
relatively stable average daily rate was able to maintain a modest ADR
(ADR) of US$152 (~S$211). growth rate of 1.2% and occupancy of
66%, consistent with figures in 2018.
Oakwood Apartments Sanya, China.
Expanding Oakwood’s While occupancy remained consistent,
global footprint growth in ADRs has been affected by
Oakwood launched the following the reduction in corporate travel.
MARKET REVIEW AND
managed properties in FY19/20,
OUTLOOK The US multifamily sector remained
including:
Student accommodation resilient with stable vacancy rates
• Oakwood Apartments Sanya, China nationally in 2019. Rental growth
In the US, university enrolment
• Oakwood Hotel Journeyhub remains strong at the national level
remained healthy relative to previous
Pattaya, Thailand and major metropolitan areas, at
years at approximately 19.9 million
• Oakwood Hotel Journeyhub above historic average of 3.4% per
students in 2019, up slightly from
Phuket, Thailand annum since 1990.
19.8 million in 2018. The US National
• Oakwood Suites Bangkok, Thailand
Center for Educational Statistics
• Oakwood Residence Cikarang, Despite global travel bans and
has forecasted that enrolment will
Indonesia lockdowns as a result of Covid-19,
increase by more than 400,000 to the Group is optimistic about the
• Oakwood Residence Hanoi, Vietnam
20.3 million students by 2028. Overall longer-term recovery as the demand
• Five properties in Seattle, the US,
rental growth for US student housing for serviced apartments is largely
through a strategic partnership
continues at a modest pace with driven by long-term business
with Wilshire Capital:
effective rents being 5% higher in the demand. However, the recovery of this
• Ballard 57
first quarter of 2020 than the same sector will depend on the speed and
• Fox and Finch
period last year. strength of the improvement in the
• Tellus on Dexter
• The Lofts at the Junction general economy. In the multifamily
In the UK, full-time student numbers sector, the demand remains stable.
• The Redwood
have been steadily increasing, with
Increasing projects in the pipeline an enrolment of about 1.9 million
Oakwood will launch the following students for the 2018/19 academic
developments in the next two years: year, a 2.1% increase from the
previous year. International students
• Oakwood Hotel & Apartments from non-European Union countries
Dandenong, Australia (98 hotel grew 7.5% from the previous year to
rooms and serviced apartments) 319,565. PBSA market fundamentals 1 Earnings before interest and tax (EBIT)
• Oakwood Hotel & Apartments plus share of operating profit or loss
are expected to remain strong, with of associated companies and joint
Chongli, China (173 hotel rooms demand forecasted to increase by an ventures (SOA), excluding residential
and serviced apartments) average annual growth rate of 2.1% by profits, incentive fee from private funds’
• Oakwood Hotel & Apartments divestment, revaluation gains or losses,
2030. This, together with the limited divestment gains or losses, foreign
Yangon, Myanmar (128 serviced PBSA development pipeline, will exchange and derivatives gains or losses.
apartments) likely result in a continued structural 2 Guardian University Guide 2020.
• Oakwood Premier Melbourne, undersupply.
Australia (392 hotel rooms and References:
serviced apartments) As the current Covid-19 pandemic i. Axiometrics
• Oakwood Suites Chongli, China continues to evolve, the health, safety ii. Real Capital Analytics
(118 serviced apartments) and well-being of student residents iii. National Center for Educational Statistics
• Oakwood Suites Yokohama, Japan and staff remains at the forefront (NCES)
(175 serviced apartments) of the Group’s priority. Overall, the iv. Higher Education Statistics Agency (HESA)
medium- to long-term outlook for v. JLL – UK Student Accommodation Report
Going forward, Oakwood will continue 2019
to build its pipeline to manage the student housing sectors in both
vi. Cushman & Wakefield – US Lodging
Oakwood-branded properties globally. the UK and US remains fundamentally Industry Overview 2019
attractive due to demographic vii. Freddie Mac Multifamily – Multifamily 2020
growth, rising participation rates for Outlook
higher education, and supportive viii. Stratfor 2020 Second Quarter Forecast64. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
EUROPE AND USA
Mapletree’s Europe and COMMERCIAL with the acquisition of Nova Atria
at a TIV of S$0.3 billion. The asset is
USA (EUSA) business unit Mapletree continues to explore located in one of Dublin’s leading
evaluates, acquires and cities where growth is underpinned submarkets and has exceptional
manages assets in a range by technology, pharmaceutical, life connectivity to the city.
sciences and other specific drivers.
of real estate sectors. In Europe, for example, Warsaw At 3 Hardman Street, Manchester,
These include commercial, is the largest business processes the UK, Mapletree completed the
outsourcing centre and Dublin has refurbishment of both East and
logistics and data centre West receptions and implemented
the fastest growth in technology
assets. EUSA’s mandate is worker population. the revised signage strategy. These
focused on broadening are in line with efforts to increase
Mapletree acquired its first commercial asset values in maximising revenue,
and deepening Mapletree’s asset in Poland, West Station, with a reducing costs and increasing
exposure beyond the Asia Total Investment Value (TIV) of occupiers’ satisfaction through active
S$0.3 billion in May 2019. The fully asset management efforts.
Pacific region, by investing
occupied asset enjoys excellent access
in new and existing asset to key transportation nodes, being LOGISTICS
classes across key gateway strategically located next to Warszawa
Zachodnia Train Station, which is a key Mapletree’s portfolio of logistics
cities in Europe, the United regional transportation hub in Warsaw assets spans across 26 states in
Kingdom (UK) and the serving international and national the US and 20 cities in Europe.
United States (US). trains and bus connections. With a combined gross floor area of
5.6 million square metres (sqm), all
In June 2019, Mapletree entered into 283 assets were acquired over the
With owned and managed a forward contract to acquire The course of 2018 and early 2019.
Sorting Office in Dublin City Centre,
assets of S$12.1 billion broadening its exposure in Europe Most of the assets are held under
as at 31 March 2020, the with a TIV of S$0.4 billion. The city is Mapletree US & EU Logistics Private
business unit contributed known as an attractive global location Trust (MUSEL), a fully invested core
for foreign direct investments due to fund with a TIV of US$4.3 billion
S$520 million to the a combination of high productivity (~S$6 billion) and US$1.8 billion
Group’s EBIT + SOA1, and a competitive cost base. Coupled (~S$2.5 billion) in equity. Mapletree
with a young and educated workforce, closed the syndication of MUSEL
and S$29.9 million in
it has developed into an economic on 31 March 2020. Consistent with
fee income in Financial hub for the technology and financial Mapletree’s approach to other
Year 2019/2020. sectors due to its pro-business policies sponsored private funds, the Group
and favourable tax-rate environment. has retained a 33% stake2 in MUSEL
to align with investor interests.
Mapletree further expanded its
footprint in Dublin in October 2019 In MUSEL’s first year of operations,
the focus was on driving leasing
activities with 0.8 million sqm of
leases executed since the fund's
inception. This generated healthy
rental reversion of 9.6%. The MUSEL
portfolio enjoys healthy operating
statistics, with a committed
occupancy of 95.7% and a weighted
average unexpired lease term of
4.1 years as at 31 March 2020. Its
robust performance enabled MUSEL
West Station comprises two 14-storey office to deliver a cash yield of 5.5% to
buildings with 68,851 sqm of NLA in Warsaw,
Poland.
investors, which was above forecast.65.
With strong support from a well-
diversified tenant base including
those from the e-commerce,
consumer goods, third-party logistics
(3PL) and supporting industries,
Mapletree has experienced high
demand for its logistics spaces in
the US and European markets. On
the back of continued growth in
the sector, e-commerce tenants
have been increasing their presence
in the portfolio, especially in last
mile locations.
DATA CENTRES
Mapletree continued to expand its Nova Atria, located in Sandyford Business Park, Dublin, Ireland, comprises two adjoining six-storey
North America data centre portfolio office blocks that occupy a total NLA of 31,140 sqm.
with its second acquisition of 13 data
centres with a total net lettable area
(NLA) of 193,293 sqm following the logistics market continued to Leasing activities in key cities were
Group’s first foray into the North prosper, with the overall vacancy driven by the technology, media,
American data centre market with rate remaining low at 4.4%, while and telecom sector, followed by
the acquisition of 14 data centres at rental grew by 5%. Demand from banking and financial services, and
US$750 million (~S$1,039.6 million) e-commerce and 3PL occupiers professional services. Tight supply
in December 2017. drove the development of new and positive occupier demand
logistics spaces while the food and supported rents across the key cities,
Mapletree acquired 10 powered beverage industry continues to be the with annual rental growth of 5.4%.
shell data centres at a purchase fastest-growing industry as grocery The outlook for 2020 is for further
consideration of approximately companies modernise supply chains rental growth, as supply shortages
US$557.3 million (~S$772.5 million) to support burgeoning online sales. are likely to continue as much of the
through a 50:50 joint venture with speculative space being developed is
Mapletree Industrial Trust and jointly Weighed down by slowing likely to be let before completion.
acquired an 80% interest with Digital international trade and weak
Realty to co-invest in three fully fitted manufacturing activities, the With uncertainties caused by factors
hyperscale data centres at a purchase Eurozone registered a growth of 1.2% such as Covid-19, United States-
for 2019. The unemployment rate, China trade negotiations, as well as
consideration of approximately
however, fell to 6.2% at the end of the US presidential election, growth is
US$810.6 million (~S$1,123.7 million).
2019, its lowest since 2000. Driven expected to moderate in the US and
The 13 data centres are located
by strong e-commerce growth, the Europe in 2020.
across North America with 12 in the
European logistics market in 2019
US and one in Canada. The assets
recorded the highest net absorption
are predominantly sited on freehold since 2009, while the overall vacancy
land3 and strategically located in rate remained low at 4.3%. 1 Earnings before interest and tax (EBIT)
key markets, with six properties plus share of operating profit or loss
concentrated in Northern Virginia, of associated companies and joint
The UK reported 1.4% growth in 2019, ventures (SOA), excluding residential
the world’s largest data centre market. which is stronger than 2018 and has profits, incentive fee from private funds’
In addition, the portfolio boasts long emerged as the third fastest growing divestment, revaluation gains or losses,
divestment gains or losses, foreign
leases with embedded rental growth economy in G7, despite uncertainties exchange and derivatives gains or losses.
coupled with tenants from the global surrounding Brexit deadlines and 2 Excluding directors’ and senior
cloud and colocation providers. a general election. While growth is management’s stake in MUSEL.
expected to soften in 2020 to 1.1%, 3 All data centres are sited on freehold
For more details, please refer to and pick up to 1.5% in 2021 with a land, except 2055 East Technology Circle,
page 68. Phoenix, which has a remaining land
managed trade deal, the UK remains lease tenure of about 63.8 years as at
an attractive investment destination 31 December 2019.
MARKET REVIEW AND for reasons such as transparency,
OUTLOOK liquidity, very strong occupational References:
markets, and its reputation as a hub i. Bureau of Economic Analysis, United States
The US economy expanded by of innovation and talent. With a Department of Commerce
2.3% in 2019. Strong employment slowing of global economic growth, ii. Eurostat
continued to be the primary driver, the high yields and spread over risk- iii. CBRE Research
with consumer spending accounting free rates enhances the attractiveness iv. Bloomberg
for nearly 70% of growth. The US of investments in UK. v. JLL66. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
MAPLETREE LOGISTICS TRUST
Mapletree Logistics Trust DELIVERING A RESILIENT PRUDENT CAPITAL
PERFORMANCE MANAGEMENT
(MLT) is a Singapore-listed
real estate investment Despite headwinds from slowing Proactive capital management
trust (REIT) that invests in global growth, unresolved United ensuring a strong balance sheet and
States-China trade conflict and the financial flexibility to seize market
and manages a diversified disruptions brought on by the opportunities is a core element of
portfolio of 145 quality, Covid-19 outbreak, MLT’s portfolio MLT’s strategy. MLT’s balance sheet
well-located, income- remained resilient and continued remains robust with a well-staggered
to deliver stable returns in FY19/20. debt maturity profile of 4.1 years and
producing logistics assets Gross revenue rose 8% year-on-year an aggregate leverage ratio of 39.3%
in Singapore, Hong Kong to S$490.8 million, while net property as at 31 March 2020. To mitigate the
SAR, Japan, China, Australia, income increased by 12.6% to impact of currency and interest rate
S$438.5 million. MLT’s improved volatilities on distribution, about 82%
South Korea, Malaysia performance was driven by organic of the income stream in FY20/21 has
and Vietnam. growth from its existing portfolio, been hedged into Singapore dollars,
contributions from accretive while approximately 77% of total debt
acquisitions as well as the completed has been hedged into fixed rates.
As at 31 March 2020, the redevelopment of Mapletree Ouluo
business unit's total assets Logistics Park Phase 1 in China. The During the year, MLT launched an
amount distributable to unitholders equity fundraising exercise, raising
under management was rose by 11.7% to S$301.7 million while S$250 million through a private
S$8.8 billion. It contributed distribution per unit was 2.5% higher placement to partially fund the
S$405.7 million to at 8.142 cents. acquisitions of seven modern logistics
properties in Malaysia, Vietnam and
Mapletree’s EBIT + SOA1 In view of the market uncertainties, China. MLT also further diversified
and S$72.6 million to fee active asset and lease management its funding sources to secure its first
income2 in Financial Year focusing on tenant retention and sustainability-linked loan of S$200
portfolio occupancy was a key million, becoming the first Singapore-
2019/2020 (FY19/20). priority for management. Portfolio listed REIT to link its renewable
occupancy was maintained at a stable energy generation target to financing.
level throughout the year, ending at
MLT was included as a
98% as at 31 March 2020. The lease Debt due in FY20/21 amounts to
component stock in the expiry profile is well-staggered with a S$242 million or 6% of total debt.
benchmark Straits Times weighted average lease expiry (by net With available committed credit
lettable area) of 4.3 years. facilities of over S$700 million, MLT
Index (STI) in December has more than sufficient facilities to
2019. The inclusion will meet its maturing debt obligations.
further enhance MLT’s profile
among global investors and
increase its trading liquidity.
Mapletree Logistics Hub - Shah Alam in Malaysia is a Grade A ramp-up logistics facility with a total
gross floor area (GFA) of approximately 237,810 sqm.67.
ENHANCING REGIONAL
NETWORK
In FY19/20, MLT strengthened its Asia
Pacific network connectivity through
acquisitions of quality, well-located
assets in its key markets. During the
year, MLT completed the acquisitions
of nine modern logistics facilities
in Malaysia, Vietnam, China, Japan,
and South Korea for approximately
S$752.8 million. Mapletree Kobe Logistics Centre, completed in April 2019, is a freehold modern four-storey logistics
facility with a GFA of 102,127 sqm located in Kobe, Japan.
The S$411.8 million acquisition of a
portfolio of seven logistics properties leasing options, as well as leveraging
OPTIMISING PORTFOLIO YIELD
from its Sponsor, Mapletree its regional network to offer solutions
Investments – one in Malaysia, two During the year, MLT completed the for tenants who are looking to
in Vietnam and a 50% interest in four divestment of five properties in Japan, diversify and seek alternative
China properties – has enhanced namely Gyoda Centre, Iwatsuki B distribution channels. At the same
MLT’s geographic diversification Centre, Atsugi Centre, Iruma Centre time, MLT will continue to maintain
across attractive logistics markets and Mokurenji Centre, for a total sale a strong financial position, while
underpinned by favourable consideration of JPY17,520 million pursuing strategic opportunities for
demand-supply dynamics. Built to (~S$211.6 million). Another property acquisitions to further enhance its
modern specifications and located in China, Mapletree Waigaoqiao competitiveness.
in close proximity to city centres, Logistics Park3, which MLT has
these properties are leased to a held since 2008, was divested for Looking beyond Covid-19, the longer
strong tenant base which includes RMB330 million (~S$63.7 million). term outlook for logistics markets in
prominent consumer brands such as The divestments free up capital and Asia Pacific remains optimistic. The
Watsons and Ashley Furniture, and provide the financial flexibility for demand for well-located modern
leading regional e-commerce players MLT to pursue investments of logistics space is expected to be
such as Lazada and Shopee. higher-yielding, modern facilities. sustained by positive structural
trends such as e-commerce growth
In Japan, the acquisition of Mapletree MARKET REVIEW AND and the modernisation of supply
Kobe Logistics Centre from OUTLOOK chains. Notably, the pandemic has
Mapletree-managed private fund increased online penetration rates
MJLD at an agreed property value of The Covid-19 outbreak has resulted and accelerated both online sales
JPY22,200 million (~S$299.8 million) in severe disruptions to economic and the automation of warehouses.
further strengthened MLT's portfolio activities and supply chains, amid Additionally, the diversification of
in an attractive logistics market facing lockdowns and social distancing supply chains in response to the
scarcity of Grade A supply. The measures. The global economy United States-China trade conflict
modern freehold logistics property is forecast to contract by 3% in and Covid-19 outbreak is expected
in a prime location in Kobe is leased 2020 while growth in Asia Pacific is to benefit the logistics markets in
to a high-quality tenant base. projected to stall at 0%. Vietnam and Malaysia where MLT
also has a strong presence.
In FY19/20, MLT also completed MLT’s diversified portfolio across
the acquisition of a quality logistics geographies and tenant trade sectors
facility in South Korea for KRW35.8 has demonstrated its resilience during 1 Earnings before interest and tax (EBIT)
billion (~S$41.2 million) and entered these challenging times. However, plus share of operating profit or loss of
associated companies and joint ventures
into a forward purchase agreement the evolving Covid-19 situation may (SOA), excluding residential profits,
for a warehouse in Melbourne, continue for an extended period. incentive fee from private funds’ divestment,
In a softening or volatile economic revaluation gains or losses, divestment gains
Australia at an agreed property value or losses, foreign exchange and derivatives
of A$18.4 million (~S$16.7 million). environment, demand for warehouse gains or losses.
Both properties are designed space, occupancy and rental rates 2 Includes REIT management fees.
with modern specifications and may be negatively impacted. 3 Divested 100% equity interest in
offer excellent connectivity to MapletreeLog Integrated (Shanghai) (HKSAR)
Against the climate of uncertainties, Limited and its wholly-owned subsidiary,
transportation infrastructure such as MapletreeLog Integrated (Shanghai) Co.,
MLT remains focused on tenant Ltd, which is in turn the registered owner of
highways and airports.
retention and enhancing portfolio Mapletree Waigaoqiao Logistics Park.
resilience. This includes working
closely with tenants to provide Reference:
customised support and flexible i. International Monetary Fund68. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020
OPERATIONS REVIEW
MAPLETREE INDUSTRIAL TRUST
Mapletree Industrial Trust DELIVERING STABLE RETURNS the issue price range and saw strong
participation from a broad spectrum
(MIT) is a Singapore-listed MIT continued to deliver stable of investors. MIT’s aggregate leverage
real estate investment returns in FY19/20, with a 14.5% ratio remained healthy at 37.6% as
trust (REIT) that manages year-on-year increase in distributable at 31 March 2020. All loans due in
income to S$265.3 million. The the subsequent FY20/21 had already
a diverse portfolio of 87 improved performance was mainly been refinanced. Excluding facilities
industrial properties in due to higher contributions from due to expire in FY20/21, MIT still
acquisition and development has ample committed facilities of
Singapore and 27 data
projects, as well as contributions about S$380 million available
centres in North America from the newly acquired 13 data for drawdown.
(through the joint ventures centres in North America held under
MRODCT. Distribution per unit (DPU) EXPANDING PRESENCE IN THE
with Mapletree Investments for FY19/20 increased by 0.7% to DATA CENTRE SECTOR
in Mapletree Redwood 12.24 cents. Tax-exempt income
Data Centre Trust and of S$6.6 million relating to the MIT expanded its presence in the
distributions declared by joint fast-growing data centre sector with
Mapletree Rosewood Data ventures in Q4 FY19/20 had been the US$1.4 billion (~S$1.9 billion) data
Centre Trust (MRODCT). withheld for greater flexibility in centre portfolio acquisition in North
The properties in Singapore cash management, in view of the America. MRODCT, a 50:50 joint
uncertainties from the Covid-19 venture with Mapletree Investments
include Hi-Tech Buildings, pandemic. Had the tax-exempt and MIT, acquired an 80% interest
Flatted Factories, Business income distribution been included, in three fully fitted hyperscale data
DPU for FY19/20 would have been centres at a purchase consideration
Park Buildings, Stack-up/
12.54 cents. of about US$810.6 million (~S$1.1
Ramp-up Buildings and billion), with Digital Realty holding
Light Industrial Buildings. Through proactive capital the remaining 20%. MRODCT also
management, MIT maintained a acquired 10 powered shell data
strong balance sheet and financial centres from Digital Realty at a
Managed by Mapletree flexibility to capture investment purchase consideration of about
Industrial Trust Management opportunities. To partially fund the US$557.3 million (~S$772.5 million).
acquisition of 13 data centres in The acquisitions of three fully fitted
Ltd, the REIT seeks to provide North America, MIT successfully hyperscale data centres and 10
unitholders with sustainable raised about S$400 million from a powered shell data centres were
private placement on 17 September completed on 1 November 2019
and growing returns through
2019. The private placement was and 14 January 2020 respectively.
proactive asset management, about 6.3 times covered at the top of
value-creating investment The 13 data centres are predominantly
management and prudent sited on freehold land3, with 12 in
the United States (US) and one in
capital management. Canada. All properties are 100%
leased to established tenants, which
As at 31 March 2020, the comprise a mix of cloud, colocation
and enterprise users. With a total
business unit’s total assets net lettable area of 193,350 square
under management (AUM) metres (sqm), they are situated in
was S$5.9 billion. In Financial key markets, with six properties in
Northern Virginia, the world’s largest
Year 2019/2020 (FY19/20), it data centre market. These acquisitions
contributed S$315.7 million will improve the resilience of MIT's
portfolio with the increased freehold
to Mapletree’s EBIT + SOA1, 44490 Chilum Place (ACC2), Northern Virginia
is one of the 13 data centres acquired in land component and long leases with
and S$64.2 million to fee North America via a 50:50 joint venture with embedded rental growth.
Mapletree Investments.
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