Mapletree Investments in the red with S$577.2 million full-year loss on valuation decline
It aims to navigate the challenging landscape with a prudent investment approach
MAPLETREE Investments posted a net loss of S$577.2 million for the financial year ended Mar 31 amid industry headwinds, compared with a S$1.2 billion net profit last year.
This comes as a high-interest environment led to expansion in real estate capitalisation rates in most markets, which in turn resulted in revaluation losses for the year, said the global real estate giant on Tuesday (May 28).
A prolonged work-from-home trend has also undermined commercial properties’ value in most Western markets. Mapletree noted a substantial decline in assets’ valuation within the office portfolios in the US, Europe and Australia markets, especially.
Revenue for the year was almost flat at S$2.8 billion, compared with S$2.9 billion in the previous financial year.
Recurring earnings were down 8.2 per cent to S$715.6 million from S$779.7 million, while total assets under management (AUM) gained slightly to S$77.5 billion, from S$77.4 billion a year earlier.
The group highlighted that it maintained prudent hedging practices and improved its operating performance to optimise earnings, and mitigated revaluation pressures with contributions from its better-performing assets in Asia, as well as logistics.
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As at end-March, the group’s cash reserves and committed undrawn facilities stood at S$12.3 billion, and net debt-to-equity ratio was lowered to 59 per cent from 64 per cent the previous year, as it continued to focus on defensive asset classes and markets with an emphasis on strengthening the balance sheet.
“Logistics remained as the group’s largest asset class, at 41 per cent of overall AUM,” said the group.
Efforts to scale up its global logistics portfolio included its first land acquisition in Chennai, India, in February 2024, and its entry into the Japanese logistics real estate market in Kyushu in July 2023. The group also completed development of 17 logistics parks in China.
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Data centres were also a core asset class, making up 8 per cent of its overall AUM in the financial year.
Mapletree Industrial Trust made its entry into Japan with its first acquisition of a newly built data centre in Osaka in September 2023, enlarging its presence in the resilient data centre sector and diversifying its portfolio geographically, the group said.
Mapletree noted that the financial year marked the end of its third five-year plan. Recycled proceeds rose to S$19.3 billion from S$17.8 billion, while fee income stood at S$2.3 billion due to its active capital management business and resilient student housing portfolio.
Looking ahead, Mapletree said it aims to navigate the challenging landscape with a prudent investment approach, focusing on core sectors – logistics, student housing, data centres and offices – in key markets with growth potential, while maintaining active capital management.
It noted that it had in April 2024 deepened its student housing footprint with the acquisition of an operating platform, as well as 31 assets across 19 cities in the UK and Germany, taking its AUM to S$79.1 billion.
The group expects demand for high-quality offices in prime locations to rise as more workers return to the workplace.
It will explore suitable opportunities to acquire prime office spaces in key gateway cities that are less affected by remote work while keeping its current portfolio competitive.
It will also continue to focus on strengthening its balance sheet, to be able to capitalise on opportunities in the markets where investment conditions and prospects have normalised, the group said.
Group chief executive officer Hiew Yoon Khong said: “Looking ahead, with a strong balance sheet, the group will continue to prioritise and strengthen our focus on core sectors by embarking on more development projects, launching more development funds, and continuing our operational expertise to deliver high-quality assets that will generate consistently attractive returns.”
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