A fitting swansong for long-serving chief Hiew: Help list Mapletree or merge it with CapitaLand

HIEW Yoon Khong has been group chief executive officer of Temasek’s wholly owned Mapletree Investments for over 22 years – a tenure at the top which far exceeds that of DBS’ much-lauded Piyush Gupta, who left his post in late March.

Hiew, who is in his sixties, likely still has plenty in his tank to continue leading the global real estate group. Still, being at the helm for well over two decades is a long time. Is change overdue?

Mapletree’s board will need to ensure orderly CEO succession when that happens. While the group has senior leaders in their mid-fifties or younger who are plausible successors or can hire an outsider, there are big shoes to fill.

Perhaps Hiew can exit with a bang by helping to list the company on the Singapore Exchange (SGX) or merge it with CapitaLand Group.

Sure, Temasek may want to own all of Mapletree as the group historically has often delivered good returns. However, listing it could garner an attractive valuation.

Importantly, an SGX-listed Mapletree injects vibrancy to the local bourse and boosts the Republic’s equities market development. Local retail investors gain by having a sound company to invest in.

Securing good valuation

Many local-listed property groups trade poorly. Despite a strong track record in housing development at home, City Developments Limited (CDL), which is a member of the Straits Times Index (STI), trades way below its end-June 2025 revalued net asset value (NAV) per share of S$17.48 after factoring in fair value of investment properties while continuing to hold hotels at cost.

Maybe investors dislike property groups with development exposure because development earnings are lumpy and some projects have long gestation periods. 

In contrast, a fellow STI member that is active in the property space, CapitaLand Investment (CLI), trades much better relative to its end-June 2025 NAV per share of S$2.52 despite having substantial exposure to China’s challenging property market.

Investors probably like CLI’s capital efficient model and value the group, which is active in managing listed and private funds, as a fund management business. Profit margin in fund management can be good and revenue from managing funds is prized for its recurrent nature.

Even if they restructure, large SGX-listed property groups such as CDL and UOL Group likely lack the track record and scale of managing third-party funds for investors to value them the way they value CLI.

Mapletree is different. It manages three local-listed real estate investment trusts – Mapletree Industrial Trust , Mapletree Logistics Trust and Mapletree Pan Asia Commercial Trust – all of whom are STI members. The group also manages various private real estate funds.

Mapletree had assets under management (AUM) of S$80.3 billion as at end-March 2025 – with 75 per cent coming from managed assets and the remainder contributed by owned assets.

In the financial year ended Mar 31, 2025 (FY2025), the group recovered from posting a net loss in the previous financial year – mainly due to revaluation losses arising from commercial properties primarily in the western markets – to achieve net profit of S$227.2 million.

For FY2025, Mapletree recorded net revaluation loss on investment properties and properties under development of about S$25 million and made allowances for development properties held for sale of around S$167 million.

While return on equity (ROE) for FY2025 of 1 per cent is hardly enticing to public market equity investors, brighter days could lie ahead.

Mapletree aims to achieve AUM of S$100 billion to S$120 billion and average ROE of 9 to 12 per cent by the financial year ended Mar 31, 2029.

Should the company post around double-digit ROE, expect equity investors to embrace it.

In short, a listed Mapletree could command a premium to NAV.

The merger route

While Mapletree can be listed on its own, merging with Temasek-held CapitaLand Group’s real estate investment management business CLI and its privately held property development arm CapitaLand Development (CLD) might be more optimal.

Possibly, Mapletree’s ownership of stakes in listed and unlisted funds, investment properties and its fund, as well as property management businesses can enter the listed space by being part of an enlarged CLI.

Such a move will turbo-charge the growth of CLI, which had funds under management of S$120 billion in the year-to-date Nov 5.

Meanwhile, Mapletree’s property development activities can merge with CLD’s.

Combining CapitaLand Group and Mapletree, which have broadly similar strategies, might yield substantial cost savings. Crucially, combining forces adds scale and could enhance competitiveness.

CLI’s market capitalisation is small compared with each of the local banking trio – DBS , OCBC and UOB . Bulking up CLI with substantial portions of Mapletree’s business will help fuel the growth of alternatives to the local banks on the domestic bourse. 

If interest rates decline, tailwinds may emerge for groups managing third-party capital in property funds. For Temasek, combining the fund management capabilities of CLI and Mapletree might may help in hunting for third-party funds to manage.

Mapletree was established in December 2000 to hold non-port properties that were transferred from port operator PSA Corporation. Today, the group’s diverse portfolio spans 13 markets. Its AUM includes logistics, office, data centre, student accommodation and other properties. 

Hiew deserves much credit for Mapletree’s transformation and has left a huge imprint on the group. The thorny issue of finding his successor can be conveniently sidestepped should the group join forces with CLI and CLD, which are led by Lee Chee Koon and Jonathan Yap, respectively – younger leaders than Hiew.

Ultimately, Hiew’s legacy at Mapletree could be sealed with a transformative move that lays the foundations for the group’s next chapter.

The writer owns shares in CLI