Temasek Holdings’ Mapletree Investments has topped the billion-dollar mark in earnings for the year ended March 31, 2007, thanks to a huge $971.2 mill

Temasek Holdings’ Mapletree Investments has topped the billion-dollar mark in earnings for the year ended March 31, 2007, thanks to a huge $971.2 million net revaluation gain.

The Singapore investment company’s subsidiary also revealed in its latest annual report plans to launch more real estate investment trusts (Reits) on the Singapore Exchange (SGX) this year.

Mapletree - a Singapore real estate company with an Asian focus - reported a profit after tax and minority interests of $1.07 billion, up from the previous year’s net profit of $144.54 million. But without the $971.2 million net revaluation gain, operating profit was still up $31.8 million or 41 per cent at $109 million, with the boost coming from the positive market outlook in Singapore.

The group’s $971.2 million net revaluation gain was a quantum leap from the previous year’s $1.04 million. This increase was mainly contributed by VivoCity, which was completed in October 2006, as well as the increase in value of Mapletree’s other commercial properties, mostly offices.

The Reits that Mapletree plans to launch on SGX include Mapletree Commercial Trust with the VivoCity mall as the anchor asset and with revenue streams from office, retail and entertainment properties in Singapore. The group, which aims to be a leading real estate capital management company, is also in discussion with Indonesia’s Lippo Group to co-manage an Indonesia-focused shopping mall Reit, Mapletree Investments’ chairman Edmund Cheng said, without elaborating, in his annual report message.

Market watchers reckon that VivoCity itself, with about one million square feet net lettable area, could be worth more than $1.6 billion and that the group could also inject into the proposed Mapletree Commercial Trust its other nearby properties such as St James Power Station, HarbourFront Centre (formerly World Trade Centre), Mapletree’s stakes in HarbourFront Towers One and Two office blocks, PSA Building and PSA Vista. The combined value of the entire portfolio, including VivoCity, could be around $3 billion, say industry observers.

As for the Indonesia-focused mall Reit venture with Lippo, market watchers note Lippo controls 40 malls through its various units. An industry player says it makes sense for Lippo to partner a proven name in the Singapore Reit business if it wants to list a shopping centre Reit in Singapore.

The group’s commercial property portfolio includes HarbourFront Centre, HarbourFront Towers One and Two (Mapletree owns 61 per cent of the two buildings), Keppel Bay Tower (30 per cent), SPI Building, St James Power Station, PSA Building and PSA Vista. Mapletree’s industrial property portfolio includes Tanjong Pagar and Pasir Panjang distriparks and Alexandra Distripark (including The Comtech, a high-tech industrial building).

In all, the group’s investment’s properties were valued at $3.72 billion as at March 31, 2007, up from $1.83 billion a year earlier. However, properties under development fell from $569.7 million to $157.7 million due to the re-classification of VivoCity property from ‘properties under development’ to ‘investment properties’ at market valuation upon its completion late last year.

Mapletree’s operating profit rose from $77.2 million for financial year ended March 2006 to almost $109 million in FY March 2007 on the back of a 34.7 per cent jump in revenue to $216.6 million. The higher revenue was due mainly to the opening of VivoCity, as well as improved occupancy and rental rates achieved by the group’s other properties. This was partly offset by loss of revenue from properties that were injected into Mapletree Logistics Trust (MLT). The group’s revenue was also boosted from higher fee income, contributed mainly by the SGX-listed MLT. The group also received a new fee income stream from one of its new funds - the privately held Mapletree Industrial Fund. Fee income accounted for 9 per cent of the group’s revenue for FY March 2007, up from a 5 per cent share for FY March 2006, reflecting Mapletree Investments’ expansion into the capital management business.

In line with the improved performance, Mapletree Investments’ return on equity rose from 6 per cent in FY March 2006 to 37 per cent in FY March 2007. Return on total assets also increased from 6 per cent to 30 per cent over the same period.

Source: The Business Times, 28 June 2007