54. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWSOUTH EAST ASIA AND GROUP RETAILThe South East Asia and SINGAPORE COMMERCIAL divested in November 2019 to MCT, adding another quality asset inGroup Retail business MCT's portfolio. Creating value through renewalunit develops, invests in and rejuvenationand manages eight asset Mapletree embarked on the adaptive VIETNAM reuse of St James Power Station atclasses (office, retail, the HabourFront Precinct to create Growth and stabilitybusiness parks, residential, a new business destination at the Mapletree’s portfolio of high-qualityserviced apartments, hotel, prime part of the Greater Southern commercial assets in central Ho Waterfront. When completed, it will Chi Minh City (HCMC) and Hanoiindustrial and warehouses) become the new global headquarters continued to enjoy high occupanciesin the region, to establish of Dyson, a leading international and positive rent reversions. Asseta platform for sustainable technology company. The restored enhancement initiatives at SC VivoCity monument will also house a heritage increased net lettable area (NLA) andreturns. gallery and a heritage trail featuring created space for new anchor tenants. maritime artefacts. The hospitality assets also sawThe 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 performedthrough its portfolio of future development. Planning well, clinching Vietnam's Leading permission for the residential site at Hotel and Vietnam's Leading Businessoperating assets, as well as King’s Dock has been obtained and Hotel in the World Travel Awardsthrough various investment further design of the development 2019. However, the restrictionand capital management and construction of the sales gallery of international travel and social is in progress. distancing measures as a result ofactivities including a real the Covid-19 pandemic impactedestate mezzanine fund and The success of Mapletree Business the hospitality sector in the last twodevelopment 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 inAs at 31 March 2020, business hub. Interest in MBC II Vietnam, One Verandah, obtained made it an ideal acquisition target for its Temporary Occupation Permitthe combined real estate Mapletree Commercial Trust's (MCT) in April 2020 and is on scheduleportfolio totalled S$3.7 portfolio. The asset was successfully for handover.billion across Singapore,Vietnam and Malaysia. InFinancial Year 2019/2020(FY19/20), the business unitcontributed S$261.1 millionto the Group’s EBIT + SOA1.Fee income contributionswere 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 andsuccessful lease-up of the Build-to-Suit facility and new phases of theindustrial park at Binh Duong.MALAYSIAMapletree provides mezzanine loanfinancing for three residential projectsin Kuala Lumpur (KL) and Selangor.28BLVD and Lexa Residence arefully sold and have already obtainedvacant possession. Through the amalgamation and extension of shop units and lease lines, additional NLA was created atCOVID-19 PANDEMIC SC VivoCity, Vietnam.The pandemic took a toll across manycountries as it spread throughout Asia domestic product (GDP) growth Office. Vacancies remain elevatedfrom 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 aboutOur priority has been to safeguard the 72,207 sqm of supply is expected tohealth and welfare of staff, tenants According to the Urban complete in 2020.and the community. Assistance to Redevelopment Authority, retailsupport tenants has also been vacancy rates rose to 8%, while rentals Vietnam’s hospitality sector saw arolled 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. OverallThe larger impact of Covid-19 will be Despite rental reliefs, Covid-19 is occupancy rates for HCMC declinedfelt and seen in FY20/21 as respective expected to greatly affect retail in 2020. to 48%, due to the overhang fromgovernments roll out enforcements the restriction of international airof Covid-19 measures, from social Vietnam travel and contraction in the globaldistancing, 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 MalaysiaRetail and hospitality businesses rates fell to 2% y-o-y, the lowest rate Malaysia’s GDP growth slowedwill remain the more impacted of increase in several years. Over the to 4.3% in 2019, from 4.7% inasset classes. same period, registered foreign direct the previous year. To reduce the investment reached US$8.6 billion, significant amount of unsoldMapletree 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 foreignersto encourage and show support to contracted by 4.3 percentage points was lowered from MYR1 million tothem. 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) ofof 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 residentialMARKET 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, SingaporeSingapore 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 Vietnam2020, reflecting the fall in external and this should weigh on the rental iii. URA Realisdemand and supply chain disruptions outlook for the foreseeable future. iv. BNM Quarterly Bulletinfrom policies implemented by v. NAPICgovernments worldwide to curb Retail sales declined 4.8% y-o-y for vi. CBRE Reportsthe Covid-19 outbreak. MTI had the first five months of 2020, based vii. Knight Frank Reportalso downgraded Singapore’s gross on reports from the General Statistics viii. JLL REIS
56. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWLOGISTICS DEVELOPMENTMapletree’s Logistics CHINA VIETNAMDevelopment business unit As at 31 March 2020, Mapletree has Mapletree Logistics Park Bac Ninhdevelops 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. Thethe Group's logistics lettable area (NLA) of over 6 million Grade A logistics facility which spansdevelopment projects. It square metres (sqm). In FY19/20, 47,732 sqm of GFA, attracted healthyoversees a strong portfolio Mapletree acquired 27 sites with demand from established 3PLs and a total investment value exceeding achieved 100% occupancy uponof 38 logistics facilities in S$1.6 billion. completion. Development of PhasesChina, Malaysia, Vietnam 4 and 5 is underway and they areand 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 the2020. 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 proposedbusiness unit contributed sought after by third-party logistics logistics park is supported byS$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 andmillion 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 expectedrespectively. 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 61,696sqm general warehouse is expectedto be completed in October 2020.Mapletree Logistics Park Bac NinhPhase 2 and Mapletree LogisticsPark Binh Duong Phase 1 wereacquired by MLT for US$36 million(~S$49.9 million) in November 2019.AUSTRALIAMapletree established AlexandraLogAUS Assets Pty Ltd in October 2019 tospearhead its logistics development Mapletree Logistics Park Bac Ninh Phase 3, a Grade A logistics facility in Vietnam, was completed inin Australia. The acquisition of a May 2019.36.3-ha site in Crestmead, Brisbane,Queensland, is scheduled forcompletion 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 hasand airport, the proposed logistics park at almost 100% occupancy. These brought significant headwinds towill 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 byMARKET REVIEW AND trade and selected industries, the sustained population growth and risingOUTLOOK recently announced RM250 billion online retail penetration. In particular, stimulus package is likely to ease its supermarket and e-commerce tenantsChina are benefitting from strong sales dampening impact on the economy.By the end of 2019, China's growth as more people stay at homepremium warehouse stock reached due to social distancing measures. In Vietnamapproximately 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 drivenrate rose to 12.1%, rental growth of national freight and supply chains by increased exports and privateremained 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 developmentsas e-commerce and retail haveunderpinned the demand for high- over the next few years. include improvement and expansionquality warehouse space in China. works for Brisbane Airport, andActivity by retail and trade enterprises Growth in demand for logistics Brisbane Port, as well as a newpicked up, with e-commerce and 3PLs warehousing has been driven by inland freight rail between Melbourneaccounting for more than 70% of new manufacturing activities for exports, and Brisbane. These investments inleases signed. Despite the economic booming e-commerce and retail physical infrastructure to support andfallout from Covid-19, the fresh food sales. Recent global disruptions such facilitate logistics activities, combinedand cold chain sectors may see faster as the United States-China trade with the continued growth in thegrowth, whereas the e-commerce and war and Covid-19 have encouraged e-commerce market, are expectedexpress delivery sectors are expected businesses to re-configure and to sustain the demand for warehouseto stay resilient. diversify their supply chains. Vietnam, space in the region. with its established infrastructure andMalaysia production networks, will benefit fromThe Malaysian economy expanded the supply chain shifts. In addition, theby 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 lossThe healthy growth rates of the of associated companies and joint end-to-end cold-chain networks and ventures (SOA), excluding residentiale-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 underlack of Grade A warehouse stock to outperform the national average joint ventures between Mapletree Invesmentswhich accounts for only 12.1% and over the next 10 years, due to strong and MLT.
58. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWCHINA AND INDIAMapletree’s China and QUALITY DEVELOPMENTS In January 2020, mTower Beijing, an WELL RECEIVED IN CHINA international Grade A office buildingIndia business units seek located within the Lize Financialto 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, haslarge 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 financialThe business units develop, industries, mTower Beijing will be 31 March 2020, nearly 90% of theinvest and manage real units had been sold. The Education directly next to major transportationestate assets in China and Zone is fully operational, including hubs with three subway lines – Line Crestar Kindergarten, Etonhouse 14, Line 16 (under construction) andIndia, 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 CityChina Fund (MIC Fund)1 Education Hub office achieved Terminal and New Airport Line, theand Mapletree China a 90% commitment rate. Beijing Daxing International Airport will be a 20-minute ride from theOpportunity 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 directAs at 31 March 2020, the Covid-19 pandemic. access to West 2nd Ring Road andbusiness units accounted 7 km from Finance Street. Within a Mapletree Ningbo Mixed-Use 3 km radius, mTower Beijing enjoysfor S$2.7 billion of the the full benefits from surrounding Development Phase 1 (residentialGroup’s total assets under and retail) successfully obtained amenities which include a five-starmanagement. 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 soldthe business units’ and 99% handed over, more than In March 2019, Mapletree acquired 90% of parking space has also been mPlaza Guangzhou, an office buildingcombined EBIT + SOA2 with a GFA of about 100,000 sqm. sold. Phase 2 (retail mall) and Phase 3was S$55.2 million, while (medical centre) topped out in May The asset, which is currently beingfee income contributions 2019 and July 2019 respectively. prepared for handover, will target Both phases are expected to obtain e-commerce, telecommunicationswere 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 Indiaasset 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 slowedthe Guangzhou Government as to 4.7% by the end of the year. Thean artificial intelligence and digital services sector contributed 3.8% to theeconomy pilot zone featuring high total growth, whereas manufacturing,quality projects by Alibaba, Tencent, construction and the automobileXiaomi etc. industry were impacted negatively. In response, the GovernmentAN EXPANDING FOOTPRINT implemented measures to boostIN INDIA demand and improve the ease of doing Existing tenants at Global Technology Park business. These included reducing in Bengaluru continued to increase theirMapletree’s maiden investment space demand, adding up to a total leasing of the corporate tax rate from 30% toin 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 TechnologyPark in Bengaluru in 2011. Since then, as well as the removal of dividendthe Group’s presence in India has distribution tax on companies andexpanded to other key office markets MARKET REVIEW AND capital expenditure of an estimatedof Chennai and Pune, with overall OUTLOOK INR2 trillion on infrastructure.office vacancy rates under 10%. Theoffice portfolio now comprises a net China India's real estate market continuedlettable area (NLA) of approximately Despite having the slowest gross to perform in 2019, attracting631,740 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 spaceIn 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 ofproject in Pune, Maharashtra with country’s largest institutional real the six largest cities saw vacanciesthe acquisition of a 7.7-acre land estate market, recorded a fourth under 10%.parcel. The site is prominentlylocated within the established office consecutive year of over RMB100 billion in transaction value India’s GDP forecast is revisedmicro-market of Kharadi. Planned of en-bloc commercial properties. downward from 1.9% to betweenas a Grade A commercial office However, concerns over the trade war 0% and -3% for FY2021 in light ofdevelopment, this will be Mapletree’s the Covid-19 situation. Repurchase began to weigh on sentiment in thesecond 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%. ServicesTechnology Park in Bengaluru. Yields were stagnant during the year, – especially the retail, aviation and owing to downward pressure on entertainment sectors – are expectedAt Global Infocity Park Chennai, one of rentals and capital values from new to steeply contract. Deferment in realthe major tenants continued to expand completions. Offices in emerging and estate office demand and slowdownits 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 inkey 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 operatinginternational 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 losswere also added to the food and has pushed for business resumption of associated companies and jointbeverage 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, foreignPark, Bengaluru, continued to retail sector being the hardest hit, exchange and derivatives gains or losses.increase their space demand by while office and residential sectorsleasing 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 Researchsqm NLA in 2019, the asset's overall the only outperformer because of ii. Government of Indiaoccupancy 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 2019/2020OPERATIONS REVIEWAUSTRALIA & NORTH ASIAThe Australia & North Asia AUSTRALIA JAPANbusiness unit focuses on Mapletree continued to expand Omori Prime Building and mBAYdeepening Mapletree’s its portfolio of office properties POINT Makuhari, located in Tokyopresence in Australia, in major Australian cities with the and Chiba respectively, were acquired addition of 111 Pacific Highway, by Mapletree North Asia CommercialHong Kong SAR, Japan and a 24-storey commercial building with Trust at a price of JPY38 billionSouth Korea, and explores a net lettable area of approximately (~S$513 million) on 28 February 2020. 18,600 square metres (sqm). Theopportunities in new real freehold Grade A office building Meanwhile, MJLD, which hadestate asset classes in is strategically located close to investments in 12 logistics facilitiesthese 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 ofThe business unit also The acquisition was completed on the projects were divested to bothmanages two private 31 July 2019. foreign and domestic third parties including real estate investment trustsequity 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 Mapletreedevelopment fund (MJLD) equity, with 72.9% of commitment Logistics Trust and the transactionand 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, wasS$1.9 billion as at 31 March Grade A office assets featuring high completed on 27 March 2020. The2020, the business unit occupancy and a well-diversified handover marked the completion ofcontributed 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 ofto the Group’s EBIT + SOA1, namely Sydney, Melbourne, The Tower Yokohama Kitanaka, theand S$85.3 million in fee Adelaide, Brisbane and Perth. high-rise development overlooking the Yokohama Bay is set to commenceincome 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 ANDOUTLOOKAustraliaIn 2019, global investment demandfor Australian real estate continuedto set new benchmarks as totaltransaction values for the officesector exceeded A$20 billion.As a result of solid real estatefundamentals, the sector attractedstrong interest from both domesticand global capital sources includinglisted REITs, unlisted funds, privateequity firms and sovereign wealth funds.Since the start of 2020, the outbreakof Covid-19 has materially dampenedactivity in both the investment and The handover of Oakwood Suites Yokohama, a 175-unit Oakwood-managed serviced apartmentoccupier 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, lockdownsand safe distancing measures were The Covid-19 pandemic and renewed been pre-leased with reportedly lowintroduced requiring non-essential social unrest pose new downside cancellation rates.businesses to remain closed. The risks and a further contraction of theFederal Government also responded Hong Kong SAR economy is expected On the contrary, the outbreak ofswiftly with three economic stimulus in 2020. The heightened uncertainty Covid-19 had seen positive impactpackages equivalent to over adds to challenges already faced by for the logistics sector, with someA$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 upas containment remains the key to capital values and rentals. merchandise such as daily necessitieseconomic recovery. As at end April to meet the significant increase in2020, although Australia achieved Japan consumer demand. In particular, thenotable success in controlling Office vacancies hit historical lows Covid-19 situation is seen to accelerateCovid-19 domestically, investment in 2019. Major markets including the switch of the main demand driveractivity is expected to remain Sapporo, Saitama, Tokyo, Yokohama, of the sector from third-party logisticsmuted until the global contagion is Nagoya, Osaka, Kyoto and f*ckuoka to e-commerce occupiers.contained. Although the occupier recorded vacancy rates of under 1% asmarket 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 lossto weather the downturn. Over of associated companies and jointthe 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, foreigngrowth in population and the creation exchange and derivatives gains or losses. a delayed leasing market downturnof new digital and technology jobs. is expected, starting in late 2020 References: with a more pronounced impactHong Kong SAR i. Australia Office Investment, Review and on secondary grade buildings. The Outlook 2020Hong Kong SAR slipped into recession Japanese government has since ii. Hong Kong Census and Statisticsin 2019 amid the United States- responded with two stimulus packages DepartmentChina trade war and months of equivalent to a record JPY234 trillion. iii. CBRE 2020 Japan Real Estate Marketanti-government protests. Real gross The Tokyo office leasing market, with Outlookdomestic profit contracted by 1.2% all-grade vacancy at 1% in Q1 2020, iv. CBRE Asia Pacific Real Estate Marketyear-on-year, shrinking for the first Outlook 2020 is expected to see some degree oftime in a decade. The lack of Chinese v. CBRE Australia Weekly Research Update resiliency in prime-grade properties. April 6investors also reduced market activity, Out of the 200,000 tsubo of Grade A vi. CBRE Japan Logistics Market View Q4 2019with only a handful of commercial office space scheduled for completion vii. Colliers Tokyo Office Market 2020 Q1property assets changing hands. in 2020, approximately 90% has Review and Outlook
62. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWGROUP LODGINGMapletree’s Group STUDENT ACCOMMODATION the US is progressing on schedule. The new 405-unit/513-bedLodging business unit Mapletree's student accommodation accommodation adjoining thedevelops, acquires and portfolio – including those held University of Pennsylvania campusmanages 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 Studentstudent accommodation, Accommodation (PBSA) assets with SERVICED & MULTIFAMILY over 22,000 beds located across RESIDENCESserviced apartments and 33 cities in the United Kingdommultifamily assets), as well (UK), the United States (US) and Mapletree’s serviced and multifamily Canada. Including projects under residence portfolio consists ofas grows the Oakwood development, the total assets under 15 serviced apartments and fourbusiness worldwide. The management (AUM) amount to multifamily assets totalling over 3,800business unit also includes a approximately S$3.6 billion. units with an AUM of approximately S$2 billion. Of which, S$1.7 billion isprivate real estate fund, the MGSA currently holds 25 assets in the part of Group Lodging’s AUM withMapletree Global Student UK and 10 assets in the US, with a total the remaining contributed by otherAccommodation 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 inTrust (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 locatedWith owned and managed improvement and enhancing the in the US. The serviced apartmentassets 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 PBSAunit 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, mixedmillion 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 bothin fee income in Financial Mapletree also completed its first short and extended stay as well asYear 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 allowparties. Geographically, 23 of its for a growth in international studentproperties are located in the US numbers over the next decade.while 44 are in Asia. In FY19/20, theaverage occupancy of Oakwood’s Serviced & multifamily residencesmanaged assets was 86%, with guests In 2019, even though the USregistering more than 2.3 million hospitality sector saw supplyroom nights during the year at a increasing more than demand, itrelatively 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 byOakwood launched the following the reduction in corporate travel. MARKET REVIEW ANDmanaged properties in FY19/20, OUTLOOK The US multifamily sector remainedincluding: 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 phu*ket, 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, withIncreasing projects in the pipeline an enrolment of about 1.9 millionOakwood will launch the following students for the 2018/19 academicdevelopments 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 ReportGoing forward, Oakwood will continue 2019to build its pipeline to manage the student housing sectors in both vi. Cushman & Wakefield – US LodgingOakwood-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 Forecast
64. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWEUROPE AND USAMapletree’s Europe and COMMERCIAL with the acquisition of Nova Atria at a TIV of S$0.3 billion. The asset isUSA (EUSA) business unit Mapletree continues to explore located in one of Dublin’s leadingevaluates, acquires and cities where growth is underpinned submarkets and has exceptionalmanages 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 andlogistics and data centre West receptions and implemented the fastest growth in technologyassets. EUSA’s mandate is worker population. the revised signage strategy. Thesefocused 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 increasingexposure 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 accessin new and existing asset to key transportation nodes, being LOGISTICSclasses across key gateway strategically located next to Warszawa Zachodnia Train Station, which is a key Mapletree’s portfolio of logisticscities in Europe, the United regional transportation hub in Warsaw assets spans across 26 states inKingdom (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 theWith 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 underas at 31 March 2020, the with a TIV of S$0.4 billion. The city is Mapletree US & EU Logistics Privatebusiness 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 billionS$520 million to the a combination of high productivity (~S$6 billion) and US$1.8 billionGroup’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 MUSELand S$29.9 million in it has developed into an economic on 31 March 2020. Consistent withfee income in Financial hub for the technology and financial Mapletree’s approach to otherYear 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 includingthose from the e-commerce,consumer goods, third-party logistics(3PL) and supporting industries,Mapletree has experienced highdemand for its logistics spaces inthe US and European markets. Onthe back of continued growth inthe sector, e-commerce tenantshave been increasing their presencein the portfolio, especially in lastmile locations.DATA CENTRESMapletree continued to expand its Nova Atria, located in Sandyford Business Park, Dublin, Ireland, comprises two adjoining six-storeyNorth America data centre portfolio office blocks that occupy a total NLA of 31,140 sqm.with its second acquisition of 13 datacentres with a total net lettable area(NLA) of 193,293 sqm following the logistics market continued to Leasing activities in key cities wereGroup’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 bythe acquisition of 14 data centres at rental grew by 5%. Demand from banking and financial services, andUS$750 million (~S$1,039.6 million) e-commerce and 3PL occupiers professional services. Tight supplyin 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 furtherconsideration of approximately companies modernise supply chains rental growth, as supply shortagesUS$557.3 million (~S$772.5 million) to support burgeoning online sales. are likely to continue as much of thethrough a 50:50 joint venture with speculative space being developed isMapletree Industrial Trust and jointly Weighed down by slowing likely to be let before completion.acquired an 80% interest with Digital international trade and weakRealty to co-invest in three fully fitted manufacturing activities, the With uncertainties caused by factorshyperscale 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 asconsideration of approximately however, fell to 6.2% at the end of the US presidential election, growth isUS$810.6 million (~S$1,123.7 million). 2019, its lowest since 2000. Driven expected to moderate in the US andThe 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 2019US and one in Canada. The assets recorded the highest net absorptionare predominantly sited on freehold since 2009, while the overall vacancyland3 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 lossconcentrated in Northern Virginia, of associated companies and joint The UK reported 1.4% growth in 2019, ventures (SOA), excluding residentialthe 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, foreignleases 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 seniorcloud 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 freeholdFor 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 StatesThe US economy expanded by of innovation and talent. With a Department of Commerce2.3% in 2019. Strong employment slowing of global economic growth, ii. Eurostatcontinued to be the primary driver, the high yields and spread over risk- iii. CBRE Researchwith consumer spending accounting free rates enhances the attractiveness iv. Bloombergfor nearly 70% of growth. The US of investments in UK. v. JLL
66. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWMAPLETREE LOGISTICS TRUSTMapletree Logistics Trust DELIVERING A RESILIENT PRUDENT CAPITAL PERFORMANCE MANAGEMENT(MLT) is a Singapore-listedreal estate investment Despite headwinds from slowing Proactive capital managementtrust (REIT) that invests in global growth, unresolved United ensuring a strong balance sheet and States-China trade conflict and the financial flexibility to seize marketand manages a diversified disruptions brought on by the opportunities is a core element ofportfolio of 145 quality, Covid-19 outbreak, MLT’s portfolio MLT’s strategy. MLT’s balance sheetwell-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 andproducing 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 theSAR, 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 hasand 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 Ouluobusiness unit's total assets Logistics Park Phase 1 in China. The During the year, MLT launched an amount distributable to unitholders equity fundraising exercise, raisingunder management was rose by 11.7% to S$301.7 million while S$250 million through a privateS$8.8 billion. It contributed distribution per unit was 2.5% higher placement to partially fund theS$405.7 million to at 8.142 cents. acquisitions of seven modern logistics properties in Malaysia, Vietnam andMapletree’s EBIT + SOA1 In view of the market uncertainties, China. MLT also further diversifiedand S$72.6 million to fee active asset and lease management its funding sources to secure its firstincome2 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 atMLT was included as a 98% as at 31 March 2020. The lease Debt due in FY20/21 amounts tocomponent 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, MLTIndex (STI) in December has more than sufficient facilities to2019. The inclusion will meet its maturing debt obligations.further enhance MLT’s profileamong global investors andincrease 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 REGIONALNETWORKIn FY19/20, MLT strengthened its AsiaPacific network connectivity throughacquisitions of quality, well-locatedassets in its key markets. During theyear, MLT completed the acquisitionsof nine modern logistics facilitiesin Malaysia, Vietnam, China, Japan,and South Korea for approximatelyS$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 aportfolio of seven logistics properties leasing options, as well as leveraging OPTIMISING PORTFOLIO YIELDfrom its Sponsor, Mapletree its regional network to offer solutionsInvestments – one in Malaysia, two During the year, MLT completed the for tenants who are looking toin Vietnam and a 50% interest in four divestment of five properties in Japan, diversify and seek alternativeChina properties – has enhanced namely Gyoda Centre, Iwatsuki B distribution channels. At the sameMLT’s geographic diversification Centre, Atsugi Centre, Iruma Centre time, MLT will continue to maintainacross attractive logistics markets and Mokurenji Centre, for a total sale a strong financial position, whileunderpinned by favourable consideration of JPY17,520 million pursuing strategic opportunities fordemand-supply dynamics. Built to (~S$211.6 million). Another property acquisitions to further enhance itsmodern specifications and located in China, Mapletree Waigaoqiao competitiveness.in close proximity to city centres, Logistics Park3, which MLT hasthese properties are leased to a held since 2008, was divested for Looking beyond Covid-19, the longerstrong tenant base which includes RMB330 million (~S$63.7 million). term outlook for logistics markets inprominent consumer brands such as The divestments free up capital and Asia Pacific remains optimistic. TheWatsons and Ashley Furniture, and provide the financial flexibility for demand for well-located modernleading regional e-commerce players MLT to pursue investments of logistics space is expected to besuch as Lazada and Shopee. higher-yielding, modern facilities. sustained by positive structural trends such as e-commerce growthIn Japan, the acquisition of Mapletree MARKET REVIEW AND and the modernisation of supplyKobe Logistics Centre from OUTLOOK chains. Notably, the pandemic hasMapletree-managed private fund increased online penetration ratesMJLD at an agreed property value of The Covid-19 outbreak has resulted and accelerated both online salesJPY22,200 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 ofin an attractive logistics market facing lockdowns and social distancing supply chains in response to thescarcity of Grade A supply. The measures. The global economy United States-China trade conflictmodern freehold logistics property is forecast to contract by 3% in and Covid-19 outbreak is expectedin a prime location in Kobe is leased 2020 while growth in Asia Pacific is to benefit the logistics markets into 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 acrossthe acquisition of a quality logistics geographies and tenant trade sectorsfacility 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 venturesinto 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 gainsAustralia at an agreed property value or losses, foreign exchange and derivativesof 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 inoffer 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 ofhighways 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 Fund
68. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020OPERATIONS REVIEWMAPLETREE INDUSTRIAL TRUSTMapletree 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 leveragereal estate investment returns in FY19/20, with a 14.5% ratio remained healthy at 37.6% astrust (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 alreadya diverse portfolio of 87 improved performance was mainly been refinanced. Excluding facilitiesindustrial properties in due to higher contributions from due to expire in FY20/21, MIT still acquisition and development has ample committed facilities ofSingapore and 27 data projects, as well as contributions about S$380 million availablecentres 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 THEwith Mapletree Investments for FY19/20 increased by 0.7% to DATA CENTRE SECTORin Mapletree Redwood 12.24 cents. Tax-exempt incomeData 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 withMapletree Rosewood Data ventures in Q4 FY19/20 had been the US$1.4 billion (~S$1.9 billion) dataCentre Trust (MRODCT). withheld for greater flexibility in centre portfolio acquisition in NorthThe properties in Singapore cash management, in view of the America. MRODCT, a 50:50 joint uncertainties from the Covid-19 venture with Mapletree Investmentsinclude Hi-Tech Buildings, pandemic. Had the tax-exempt and MIT, acquired an 80% interestFlatted Factories, Business income distribution been included, in three fully fitted hyperscale data DPU for FY19/20 would have been centres at a purchase considerationPark Buildings, Stack-up/ 12.54 cents. of about US$810.6 million (~S$1.1Ramp-up Buildings and billion), with Digital Realty holdingLight 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 aManaged by Mapletree flexibility to capture investment purchase consideration of aboutIndustrial 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 fittedLtd, the REIT seeks to provide North America, MIT successfully hyperscale data centres and 10unitholders with sustainable raised about S$400 million from a powered shell data centres were private placement on 17 September completed on 1 November 2019and growing returns through 2019. The private placement was and 14 January 2020 respectively.proactive asset management, about 6.3 times covered at the top ofvalue-creating investment The 13 data centres are predominantlymanagement and prudent sited on freehold land3, with 12 in the United States (US) and one incapital management. Canada. All properties are 100% leased to established tenants, whichAs at 31 March 2020, the comprise a mix of cloud, colocation and enterprise users. With a totalbusiness unit’s total assets net lettable area of 193,350 squareunder management (AUM) metres (sqm), they are situated inwas S$5.9 billion. In Financial key markets, with six properties in Northern Virginia, the world’s largestYear 2019/2020 (FY19/20), it data centre market. These acquisitionscontributed S$315.7 million will improve the resilience of MIT's portfolio with the increased freeholdto Mapletree’s EBIT + SOA1, 44490 Chilum Place (ACC2), Northern Virginia is one of the 13 data centres acquired in land component and long leases withand S$64.2 million to fee North America via a 50:50 joint venture with embedded rental growth. Mapletree Investments.income2.
