REITs – BT

Mapletree to float after listing 2 Reits

Trusts with combined assets of $5-6b to list by next year and set stage for Mapletree’s own flotation

Mapletree Investments, a fully-owned real estate subsidiary of Temasek Holdings, yesterday announced plans to list two trusts that will hold a total of about $5-6 billion of Singapore assets between them. One of the flotations is targeted by year-end.

In addition, the group plans to set up another three private equity funds over the next 12 months.

Once the two real estate investment trusts (Reits) have been listed on the Singapore bourse, the company’s business profile and performance track record will be strengthened and Mapletree itself could be floated, although this may be two years from now, Mapletree’s group CEO Hiew Yoon Khong said at a media briefing yesterday.

‘If you look at the pure qualification of listing, we can go (for a listing) any time. But when we go to the market, we want the market to be quite clear that we are quite a unique real estate company,’ he added.

‘The IPO will not be driven by the usual fund raising objective but it will help us in terms of improving our footprint, branding and engagement in the market place.’

He also said Mapletree plans to double total assets under management from $12.9 billion currently to $25 billion in five years, with growth driven by third-party assets under management.

The group is targeting to list a Reit by the end of this year that will hold about $2 billion worth of Singapore industrial properties, subject to conducive stock market conditions.

Bankers have already been appointed to work on the IPO; they are believed to include Goldman Sachs, Citigroup and DBS.

The second Reit that Mapletree is working hard to mint will hold about $3-4 billion of Singapore commercial properties – anchored by Vivocity mall, and possibly including Merrill Lynch HarbourFront, PSA Building and Mapletree Business City (MBC).

However, the precise portfolio composition of this second Reit has not been determined as some assets were completed recently and may need more time for their income to stabilise.

Mapletree plans to be able to do an IPO for this commercial Reit, to be called Mapletree Commercial Trust, by year-end, although this may stretch to next year.

The first Reit will hold the former JTC industrial portfolio worth $1.73 billion currently held under Mapletree Industrial Trust (MIT) as well as possibly other Singapore assets held under Mapletree Industrial Fund (MIF), subject to approval of MIF and MIT investors.

The proposed Reit is likely to be geared at 30-35 per cent. Mapletree expects to retain a stake of about 30 per cent in the trust post-flotation, suggesting an IPO size of close to $1 billion, said Mapletree’s CEO (industrial) Phua Kok Kim.

MIT’s portfolio is currently syariah compliant and if Mapletree chooses to have the proposed Reit syariah compliant as well, it will open up a demand pool from Middle East investors, Mapletree executives said.

The three private equity funds which the group hopes to spin off in the next 12 months will include a second China-focused fund to undertake new commercial and residential projects once the existing Mapletree India China Fund is fully committed for its China allocation, says Mapletree Investment’s chief investment officer Chua Tiow Chye.

There are also plans for a Vietnam fund for which Mapletree has already identified a pipeline of commercial and residential projects to seed the proposed fund.

The third new fund will be a Japan-focused one that will invest in the IT-related business space – for which the group bought a light industrial building in Tokyo this year as a seed investment.

Later down the road, Mapletree is also planning a China-focused industrial fund.

Currently the group manages the Mapletree Logistics Trust and co-manages the Lippo-Mapletree Indonesia Retail Trust.

It also manages four private equity funds, including one jointly with CIMB in Malaysia.