BT: Mapletree all set to take on the big boys

Business Times - 24 Oct 2007
COMMENTARY

Mapletree all set to take on the big boys

With mouthwatering results and growing sophistication, it's come a long way since 2000
By UMA SHANKARI

LISTED developers in Singapore now have a relatively new kid on the block to watch out for - Temasek-owned Mapletree Investments.

Under the stewardship of Hiew Yoon Khong, who took over the helm in August 2003, Mapletree has expanded its overseas presence and grown its capital management business.

And this year, the company has started going head-to-head with established developers to compete for land sites.

Mapletree's strategy has translated into solid financial numbers.

During its 2006 financial year, Mapletree's earnings crossed the billion-dollar mark for the first time - a milestone achieved by only one other property company in Singapore, CapitaLand.

Mapletree's net profit came to $1.07 billion, a seven-fold increase over the previous year.
While the bulk of the earnings spike was due to valuation gains from its newly-opened mega-mall VivoCity, operating revenue itself grew by 35 per cent to $216.6 million.

During the year, Mapletree's asset portfolio also grew from $2.97 billion to $4.53 billion.
But more significant than the improved numbers is the fact that over the last few years, Mapletree has become a much more sophisticated entity.

Mr Hiew told BT that going forward, Mapletree will continue to grow its capital management business and overseas footprint - in line with what other developers in Singapore are doing.

Big but nimble

Growing the capital management business will also allow Mapletree to go asset-light, which will allow it to move more quickly and take on bigger projects.

For example, setting up the commercial trust, which will have a portfolio of $3 billion to $3.5 billion, means that Mapletree will be able to recycle assets worth that amount, said Mr Hiew. It is quite clear that he intends to put the money to good use. Mapletree has signalled this year that it is more than just a holding company for state-owned properties by bidding for and winning a government land sales site at Anson Road/Enggor Street in July.

Mapletree's offer was a bullish 23 per cent higher than the next highest offer - a clear sign that the company is serious about building up its commercial landbank.

Last month, Mapletree also formed a joint venture with CapitaLand to offer $1.8 billion - or $1,281 per square foot per plot ratio - for a white site at Marina Bay, but lost out to Macquarie Global Property Advisors.

With the bulk of its commercial properties divested into the upcoming trust, a flush-with-cash Mapletree will no doubt be a serious contender for sites.

Mr Hiew said that he wants to grow Mapletree's exposure to the office sector in Singapore in particular.

The company has certainly come a long way since it was incorporated in December 2000 to hold the property assets transferred by PSA to Temasek Holdings.

Going forward, it will be interesting to watch Mapletree make its mark on the property landscape as it comes into its own over the next few years.