MAPLETREE Investments saw net profit plunge to $210.3 million for FY 008 ended March 31, 2009 from $1.04 billion a year earlier, on a sharp fall in revaluation gains.

The company, which is fully owned by Temasek Holdings, said in its latest annual report that revaluation gains from investment properties fell from $1.09 billion in FY 2007 to $36.1 million in FY 2008.

This dragged profit down even though revenue climbed on the back of higher rental income. Total revenue rose 21.7 per cent to $444.9 million, from $365.6 million in FY 2007. ‘The higher rental revenue was contributed mainly by improved occupancy and rental rates in Singapore as a result of pro-active asset management initiatives,’ Mapletree said.

The company gets 73 per cent of its income from rents, even though it has been working to diversify its revenue base in recent years.

Mapletree said it saw ‘healthy’ rental reversions at its properties in FY 2008. The occupancy rate also grew to 98 per cent, from 95 per cent the year before. The focus on diversification meant that fee income, which made up 7 per cent of revenue in FY 2007, grew to contribute 16 per cent of revenue in 2008.

Recurrent management fee income from its listed Mapletree Logistics Trust and two private real estate funds launched during the year - Mapletree India China Fund and Mapletree Industrial Trust - drove a 160 per cent jump in fee income to $72.6 million.

Mapletree has also diversified in another way - by increasing its exposure to neighbouring economies. In FY 2008, 74 per cent of its real estate asset base was in Singapore. In contrast, 99 per cent of assets were located here in 2004.

Outside Singapore, Mapletree has a presence in Hong Kong, Indonesia, Malaysia, China, Japan and elsewhere.

It grew its owned and managed real estate assets to $11.8 billion in FY 2008, from $8.9 billion in FY 2007, was due to a $400 million increase in owned assets and a $2.5 billion increase in assets under management. The increase in owned assets resulted from the completion of Merrill Lynch Harbourfront in Singapore, among other things.

Mapletree chairman Edmund Cheng said in his chairman’s address that FY 2009 looks challenging.

‘However, the group is financially strong, has a good-quality diversified earnings base and is uniquely positioned to capitalise on any opportunity that may arise,’ he said. ‘We have the people, assets, experience and drive to emerge from this global crisis stronger than ever.’

Source : Business Times - Saturday 7 July 2009

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Email: Winston@privatepropertysingapore.com
Author Of “Singapore Property Reference Guide”