RIDINg the waves of change
MAPLETREE INVESTMENTS PTE LTD
ANNUAL 2020/ REPORT 2021 RIDINg ABOUT THE COVER The Covid-19 pandemic tested the RIDINg resilience and agility of individuals the waves THE WAVES and businesses that sought to navigate the new challenges and of change OF CHANGE emerge stronger. This year’s annual report cover features the sculpture Wave by Baet Yeok Kuan, located at Mapletree Business City, Singapore. The stainless steel waveforms and MAPLETREE INVESTMENTS fluidity of the sculpture symbolise PTE LTD
ANNUAL 2020/ how Mapletree will continue to REPORT 2021 ride the waves of change, guided by sound leadership and effective strategies that enable the Group to forge ahead and pave the way for a sustainable future.
REVENUE1 S$2,735.9 TOTAL AUM MILLION S$66.3 PATMI 2 BILLION S$1,849.9 MILLION CONteNTS
Performance Highlights 2 BUILDING UP 30 MOVING TOWARDS 92 A STRONG PORTFOLIO A SUSTAINABLE FUTURE RISING ABOVE 4 NEW CHALLENGES Highlights of the Year 32 Sustainability Report 94
Corporate Overview 6 Financial Review 39 Sustainability – Corporate 125 Governance Message from the Chairman 8 Corporate Liquidity and 46 Financial Resources Sustainability – Risk 130 Interview with the Group 13 Management CEO STAYING AHEAD 50 OF CHANGING TIMES Financial Statements 133 Board of Directors 18 Operations Review 52 Group Senior Management 24 Property Portfolio 74 Awards and Accolades 29 Our Offices 87
Investment Activities and 88 Capital Management
TOTAL AMOUNT TOTAL GROSS SET ASIDE TO FUND FLOOR AREA CORPORATE SOCIAL (SQUARE METRES) RESPONSIBILITY EXPANSIVE INITIATIVES ~23.6 PORTFOLIO ACROSS (SINCE FY10/11) MILLION 13 MARKETS S$32.2 MILLION
1 Revenue is adjusted to exclude incentive fee income and residential revenue. They are not deemed to be the core business activities for the Group. 2 PATMI denotes net profit after tax and non- controlling interests attributable to Perpetual Securities Holders and Equity Holder of the Company. performance highlights
The financial year ended TOTAL ASSETS UNDER MANAGEMENT (AUM) 31 March 2021 (FY20/21) saw (FY20/21) Mapletree progressing into the second year of its third Five-Year Plan for the next stage of progress. Despite a challenging landscape, the S$66.3 Group successfully secured a strong foothold in real BILLION estate sectors across key global markets.
AUM Overall, Mapletree’s revenue1 (S$ million) in FY20/21 was S$2,735.9 70,000 19,793 million, with profit after 46,536
tax and minority interests 18,275 (PATMI)2 registering a total of 42,204 60,000 17,977 S$1,849.9 million. Mapletree’s 37,747 assets under management (AUM) grew to S$66.3 billion 50,000 15,238 in FY20/21, with about 70% 31,051 being third-party AUM. 11,423 Mapletree also delivered 28,111 40,000 an average return on equity 11,774 22,972 (ROE)3 of 10.9% and return on invested equity (ROIE)4 7,853 30,000 20,562 of 15.1% between FY19/20 6,381 18,224 and FY20/21. 5,020 8,450 16,744 11,401 20,000
10,000
0 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Financial Year
Owned assets Managed assets
2 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 FY20/21 – ROE3 10.6%
PATMI2 AVERAGE ROE3 (FY20/21) (From FY19/20 to FY20/21) 10.9%
S$1,849.9 FY20/21 – ROIE4 MILLION
FEE INCOME5 8.6% (S$ million) 600 AVERAGE ROIE4 518 (From FY19/20 to FY20/21) 500 451
400 366 302 % 267 277 15.1 300 241 188 203 200 134 1 Revenue is adjusted to exclude incentive fee income and residential revenue. They are not 100 deemed to be the core business activities for the Group. 2 PATMI denotes net profit after tax and non- 0 controlling interests attributable to Perpetual 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 Securities Holders and Equity Holder of the Company. Financial Year 3 ROE denotes return on equity and is computed based on PATMI attributable 6 to Equity Holder of the Company over EBIT + SOA shareholder’s funds. (S$ million) 4 ROIE is computed based on adjusted* PATMI over the Group’s equity held at original 2,500 2,308 invested cost (OIC). 5 Includes REIT management fees. 2,092 6 Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated 2,000 1,863 companies and joint ventures (SOA), excluding 1,668 residential profits, incentive fee from private 1,572 funds’ divestment, revaluation gains or losses, 1,500 1,295 divestment gains or losses, foreign exchange and derivatives gains or losses. 1,141 1,042 7 EBIT + SOA in prior years are restated as 1,000 877 incentive fee and residential profits are 796 excluded from EBIT + SOA. They are not deemed to be the core business activities for the Group. 500 * Adjusted to exclude non-cash and non- operating items such as unrealised revaluation 0 gains or losses, mark-to-market fair value 11/12 12/13 13/14 14/15 15/167 16/177 17/187 18/197 19/20 20/21 adjustments, gains and losses on foreign exchange, negative goodwill and dilution Financial Year gains and losses and include OIC gains from any gains or losses on disposal and corporate restructuring surplus or deficit.
3 Rising above new challenges
REAL ESTATE CAPABILITIES
Mapletree’s business model creates value through its core capabilities in real estate development, investment, capital and property management. In Financial Year 2020/2021, the Group continued to broaden its global presence by successfully acquiring and developing data centre, logistics, office, residential and student accommodation assets in Singapore, Australia, China, Europe, India, Japan, South Korea, the United Kingdom and the United States.
DEVELOPER INVESTOR CREATING VALUE CAPITALISING ON Leveraging its development expertise, OPPORTUNITIES Mapletree transforms greenfield lands, Mapletree pursues, seizes and underwrites underperforming assets and precincts into new business opportunities across the entire high-value real estate. real estate value chain. Oakwood Suites Yokohama occupies the 46th to 51st floors of The Kitamaka Yokohama Tower, Yokohama’s tallest and largest residential complex.
CAPITAL PROPERTY MANAGER MANAGER GROWING THIRD-PARTY STEWARDING ASSETS ASSETS UNDER MANAGEMENT Mapletree provides a suite of quality property management services to its tenants and Employing a disciplined capital management ensures that their operational needs are met. framework, Mapletree delivers consistent and high returns to its investors, as demonstrated by the success of its four real estate investment trusts and five private equity funds. corporate overview
Since 2015, Mapletree’s footprint has opportunities. Supporting Mapletree’s expanded beyond Asia to the highly operations are its more than 2,580 Mapletree Investments Pte developed markets of Australia, dedicated employees working from an Ltd (Mapletree) is a leading Europe, the United Kingdom (UK) and extensive network of offices worldwide. the United States (US). The Group also real estate development, has an extensive and well-diversified In Financial Year 2020/2021, Mapletree investment, capital and property range of asset classes, ranging from strengthened its portfolio by acquiring management company. data centre, industrial, lodging, and developing data centre, logistics, logistics, mixed-use, multifamily, office, residential and student Headquartered in Singapore, office, residential and retail assets, accommodation assets in Singapore, Mapletree has a 21-year track located across 13 markets. These Austalia, China, Europe, India, Japan, record of generating strong and diverse income streams have enabled South Korea, the UK and the US. Mapletree’s business to remain resilient As at 31 March 2021, Mapletree stable returns to investors by in the face of challenges such as the has S$66.3 billion of assets under identifying real estate sectors Covid-19 pandemic. management (AUM). Of these, over and geographical markets S$46.5 billion or about 70% are As the Group continues to grow, it held under four of the Group’s with solid growth potential, seeks to maintain an optimal capital Singapore-listed real estate investment investing in high-quality assets structure for the financial muscle and trusts and five private equity real flexibility to pursue new investment estate funds. and proactively managing those assets to maximise yield.
AUM BY GEOGRAPHY1 THE UNITED KINGDOM EUROPE INDIA CHINA HONG KONG SAR S$3,603.7m S$3,367.6M S$1,197.4m S$9,231.6m S$7,318.2M
NORTH AMERICA SOUTHEAST ASIA SINGAPORE AUSTRALIA SOUTH KOREA JAPAN S$13,764.2m S$2,290.8m S$18,040.5M S$2,447.9M S$1,449.7m S$3,617.2m
6 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 OUR BUSINESS SEGMENTS SINGAPORE-LISTED REITS
SOUTH EAST ASIA AND GROUP RETAIL LOGISTICS DEVELOPMENT MAPLETREE LOGISTICS TRUST Developer/investor/manager of Developer/manager of logistics properties Manager of logistics properties in Singapore, commercial properties (and select in Australia, China, India, Malaysia Australia, China, Hong Kong SAR, India, industrial properties) in Singapore and and Vietnam Japan, Malaysia, South Korea and Vietnam properties in Southeast Asia
CHINA INDIA MAPLETREE INDUSTRIAL TRUST Developer/investor/manager of properties Developer/investor/manager of properties Manager of industrial properties and in China in India data centres in Singapore and North Capital Management Platform America Private real estate fund: • Mapletree China Opportunity Fund II (MCOF II)
AUSTRALIA & NORTH ASIA GROUP LODGING MAPLETREE COMMERCIAL TRUST Developer/investor/manager of Developer/investor/manager of global Manager of office, business park and properties in Australia, Hong Kong SAR, lodging properties in North America, retail properties in Singapore Japan and South Korea the UK and Oakwood Capital Management Platform Capital Management Platform Private real estate fund: Private real estate fund: • Mapletree Australia Commercial Private • Mapletree Global Student Trust (MASCOT) Accommodation Private Trust (MGSA)
EUROPE AND USA MAPLETREE NORTH ASIA COMMERCIAL Developer/investor/manager of properties TRUST in Europe, North America and the UK Manager of commercial properties in China, Capital Management Platform Hong Kong SAR, Japan and South Korea Private real estate funds: • Mapletree US & EU Logistics Private Trust (MUSEL) • Mapletree Europe Income Trust (MERIT) 1 Geography covers regions in accordance with Mapletree’s business and capital management platforms.
7 message from the chairman
MR EDMUND CHENG
8 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 “ MAPLETREE REMAINS RESILIENT IN THE FACE OF CHALLENGES AND ADVERSITY. THE GLOBAL ECONOMY IS GRADUALLY RECOVERING AND THE ROLLOUT OF COVID-19 VACCINES BRINGS IMMENSE HOPE. HOWEVER, NEW VARIANTS OF THE VIRUS ARE A STARK REMINDER THAT COVID-19 CONTINUES TO BE A SERIOUS THREAT TO OUR COMMUNITIES AND ECONOMIES. ”
When I penned my message for At the same time, the Group made a Closer to home in Asia, Mapletree and Financial Year 2019/2020 (FY19/20), significant number of acquisitions that Mapletree North Asia Commercial Trust Covid-19 had just emerged across strengthened its portfolio. The Group’s (MNACT) completed the acquisition Asia and its repercussions on our office asset class was enhanced by the of a Grade A freehold office building lives, economies and financial markets addition of properties in South Korea, in South Korea for KRW452 billion were unclear. 12 months on, it has the Netherlands and the United States (~S$535.1 million). Known as The transformed the way we live and work. (US) at a total transaction value of Pinnacle Gangnam, the 20-storey asset approximately S$1.8 billion. with six underground floors is located in The pandemic has left its mark across the Gangnam business district. the globe. At Mapletree, Covid-19 In the US, Mapletree acquired 11 impacted our business, stakeholders, office buildings in Raleigh, North These acquisitions grew the Group’s tenants and staff. Nonetheless, we Carolina; Uptown Station in Oakland, AUM for the office asset class by 2% demonstrated resilience and delivered California; and Galatyn Commons, compared to a year ago. a strong performance in FY20/21. a four-building office portfolio in Richardson, Texas. These acquisitions In terms of development projects, The Group recorded S$1,849.9 million broadened Mapletree’s exposure in Mapletree advanced in the Japan for its profit after tax and minority the US commercial market with a total logistics and Hong Kong SAR data interests (PATMI)1 in FY20/21, an investment value of US$1 billion centre markets. In November 2020, the increase of 4% year-on-year (y-o-y). (~S$1.3 billion). In Europe, the Group acquired a 116,431-square metre Total owned and managed assets Group made inroads into the Dutch (sqm) plot of prime land in Chikushino, under management (AUM) also grew commercial office market by acquiring Fukuoka prefecture, Japan. The land to S$66.3 billion, a rise of 9.7% from a six office buildings at Papendorp Park parcel will be transformed into two year ago. Due to the deconsolidation of in Utrecht for EUR147 million blocks of multi-storey logistics facilities Mapletree Industrial Trust (MIT) and the (~S$236 million). with total investment amounting to syndication of private funds, the Group witnessed a 29.4% y-o-y decrease in revenue2 to S$2,735.9 million. Mapletree’s EBIT + SOA3 decreased by 19.3% from a year ago to S$1,862.9 million, and the return on equity (ROE)4 edged lower to 10.6% in FY20/21.
Mapletree’s strategic business model has enabled the Group to broaden its presence in higher-earning asset classes and take on a more cautious approach in weaker sectors. Logistics and data centre asset classes, which comprise more than a third of Mapletree’s overall AUM, saw higher than pre-pandemic occupancy rates as more people turned to e-retailers and companies adopted remote working arrangements. Mapletree marked its first foray into the Dutch commercial office market with the acquisition of six office buildings at Papendorp Park in Utrecht, the Netherlands.
9 message from the chairman
Meanwhile, MIT secured a S$300 million sustainability-linked facility for general working capital and corporate funding purposes. MCT also secured S$370 million of green loan facilities in FY20/21 to refinance loans for its properties that have been certified BCA Green Mark GoldPLUS or better. MNACT obtained two green loan facilities amounting to HK$1.2 billion (~S$207.3 million) for loans relating to Festival Walk in Hong Kong SAR.
CONTINUING CORPORATE SOCIAL RESPONSIBILITY SUPPORT UNDER THE “NEW NORMAL”
Mapletree acquired a 116,431-sqm plot of prime land in Chikushino, Fukuoka prefecture, Japan to build two Mapletree continues to commit to the blocks of multi-storey logistics facilities that will be the largest logistics warehouse space in the Kyushu region. community by setting aside S$1 million for every S$500 million of PATMI to fund its Corporate Social Responsibility over S$550 million. Upon completion, As a capital manager, Mapletree (CSR) programmes. In FY20/21, it will be the largest logistics warehouse successfully concluded its first Mapletree committed approximately space in the Kyushu region. European office fund at the end of S$3.7 million to such causes. March 2021. The fund comprises seven In February 2021, Mapletree acquired Grade A office properties across seven During the Singapore Government- an approximately 4,000-sqm industrial major cities in the United Kingdom (UK) mandated “circuit breaker” period, site at Fanling, Sheung Shui Town in and Europe, totalling approximately the Group offered financial relief and New Territories, Hong Kong SAR, for 270,000 sqm in GFA at a total asset support schemes for its staff, tenants HK$813 million (~S$140.4 million) to value of EUR1.2 billion (~S$1.9 billion). and the communities it operates develop the Group’s first data centre in Notwithstanding the global pandemic, in, despite the unusually difficult the market. The facility, which will have Mapletree Europe Income Trust (MERIT) circumstances. a maximum gross floor area (GFA) of – the Group’s 11th private equity fund 20,140 sqm, can be leased to an – attracted strong investor interest For one, Mapletree established a end-user or a data centre operator and closed favourably, raising community sharing fund that pooled upon completion in 2023. EUR507 million (~S$812.9 million) in voluntary contributions from local staff. total fund equity. These were distributed to employees of On the residential front, the Group tenants and service providers working launched luxury condominium The I am heartened to note that in this at Mapletree properties who had to Reef at King’s Dock in the heart of financial year, all four of the Group’s take no-pay leave during the “circuit the Greater Southern Waterfront, real estate investment trusts – breaker”. This was on top of the Singapore. From its launch in January Mapletree Logistics Trust (MLT), MIT, S$223 million Covid-19 rental rebates 2021 to 31 March 2021, 80% of the Mapletree Commercial Trust (MCT) and that Mapletree swiftly provided to 429 units were sold – a testament to its MNACT – made strides towards a more affected tenants. strong appeal among home buyers and sustainable future. investors. The Reef at King’s Dock will The Group also committed S$85,000 also feature Singapore’s first floating MLT secured a S$200 million loan and launched Mapletree Arts in the City deck in a residential development. to install at least eight rooftop solar on Air, a series of digital performances panels at its properties in Singapore. adapted from the quarterly lunchtime
10 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 performances held at Mapletree 30 trainees, M-TRAIN seeks to impart vodcast. Supported by Mapletree, Business City in Singapore before the relevant real estate knowledge and the challenge provided about 750 pandemic. Apart from showcasing skills through both work and study. SIT students with a platform to pitch artists in Singapore, the series also The latter comprises classroom training their entrepreneurial ideas on the served to pay tribute to frontline by faculty members of Singapore theme “Reimagining Sustainability workers and keep the public’s spirits up. Management University (SMU) and for Improving Our World”, as well as Mapletree’s senior leaders. equipped them with job interview and Mapletree’s continued financial presentation skills. support is both crucial and timely for We are equally encouraged by the Singapore’s art and culture scene, which number of staff-led CSR proposals for Under the Mapletree Real Estate is significantly affected by the ongoing the Mapletree Staff CSR Programme. Programme at SMU, Mapletree and pandemic. During this period when Since 2014, the programme has grown SMU jointly organised the second access to the arts is severely restricted, from supporting three teams to edition of the Mapletree Real Estate the Mapletree-TENG Academy 14 teams with S$5,000 each in seed Forum (October 2020) and the third Scholarships are a vital support for funding. In FY20/21, we received edition of the Mapletree Annual young artists and demonstrate the 17 proposals, of which nine teams Lecture (March 2021), holding both Group’s commitment to the arts and renewed their commitment to support virtually for the first time. Over 360 education – two of the four pillars of beneficiaries they have been working participants took part in the forum titled Mapletree’s CSR programme. For the with. Teams in seven markets carried “Opportunities and Challenges for fourth year in a row, the Group awarded out their activities, namely Singapore, the Real Estate Sector in the Covid-19 these scholarships with a tenure of two Australia, Greater China, India, Japan, Era”, which painted a positive albeit years and a value of S$10,000 each. the US and Vietnam. challenging outlook of the real estate In FY20/21, there were four recipients. sector. “The Commercial Real Estate The pandemic has compelled us to Eco-System” lecture was presented We also launched the Mapletree adapt to the “new normal” and leverage by keynote speaker Professor Stijn Traineeship (M-TRAIN), a 12-month full- technology to hold key CSR events. Van Nieuwerburgh, the Earle W. Kazis time work-study programme completely and Benjamin Schore Professor of Real funded by Mapletree. The programme Mapletree and the Singapore Institute Estate and Professor of Finance at supports fresh graduates who face of Technology (SIT) successfully Columbia University’s Graduate School difficulty finding employment during concluded the second edition of The of Business. the pandemic. Employing up to Mapletree Challenge Grand Final via Similarly, we organised the inaugural virtual edition of the Singapore Bird Race, which is now into its 36th year. We saw a record turnout, with 250 participants from six different categories competing under safe distancing guidelines. Additional measures were introduced, including remote reporting of bird observations via a web-based platform, as well as the omission of a centralised flag-off and finale location. The race was jointly organised by Mapletree, BirdLife International and the Nature Society (Singapore), and supported by the National Parks Board.
Participants, including Minister for National Development Mr Desmond Lee, were equipped for birdwatching at the 36th Singapore Bird Race.
11 message from the chairman
Lastly, we were privileged to sponsor the third edition of the Mapletree- SCCCI River Hongbao Hackathon, an annual youth entrepreneurship competition supported by the Singapore Chinese Chamber of Commerce & Industry. Incorporating either environmental sustainability or social enterprise in their business ideas, students showcased the unity and spirit of Singapore’s “new normal” in this year’s theme of “Forging a Brighter Future”. The competition attracted participants aged 18 to 29 from 11 tertiary institutions. Winning teams also had the opportunity to set up booths at Singapore’s largest Chinese New Year Mr Edmund Cheng, Chairman, Mapletree; Ms Low Yen Ling, Minister of State for the Ministry of Culture, event, the annual River Hongbao, while Community and Youth & Ministry of Trade and Industry; and Mr Tan Aik Hock, Chairman, River Hongbao adhering to Covid safety measures. 2021 Organising Committee, presenting the Top 3 Finalists Award to Stick ’Em.
EMERGING STRONGER FROM I am also deeply grateful to Group CRISIS Chief Executive Officer Mr Hiew Yoon Khong for his emphatic stewardship Mapletree remains resilient in the at Mapletree. My appreciation face of challenges and adversity. The extends to our employees as well, global economy is gradually recovering who have not only stayed the course and the rollout of Covid-19 vaccines in this unprecedented crisis but also brings immense hope. However, new contributed greatly to the Group’s variants of the virus are a stark reminder success. that Covid-19 continues to be a serious threat to our communities and With brighter days on the horizon, we economies. will ride the waves of change and forge ahead in the coming year. On this note, I would like to record my heartfelt gratitude to healthcare workers everywhere for responding swiftly and selflessly during the 1 PATMI denotes net profit after tax and non- Covid-19 crisis. controlling interests attributable to Perpetual Securities Holders and Equity Holder of the Company. To my esteemed and highly dedicated 2 Revenue is adjusted to exclude incentive fee Board members, thank you for your income and residential revenue. They are not nimble execution and strategic EDMUND CHENG deemed to be the core business activities for the Group. guidance in this past financial year. CHAIRMAN 3 Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated companies and joint ventures (SOA), excluding residential profits, incentive fee from private funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange and derivatives gains or losses. 4 ROE denotes return on equity and is computed based on PATMI attributable to Equity Holder of the Company over shareholder’s funds.
12 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Interview with the Group CEO
MR HIEW YOON KHONG 1) Financial Year 2020/2021 (FY20/21) was volatile due to Covid-19. How did Mapletree fare? Mapletree achieved positive returns in FY20/21 with 8.6% return on invested equity (ROIE)1 and 10.6% return on equity (ROE)3. The Group realised profit after tax and minority interests (PATMI)4 of S$1,019.9 million before a one-off accounting gain from the deconsolidation of Mapletree Industrial Trust (MIT). Including the one-off accounting adjustment, Mapletree’s PATMI4 was increased by 4% from S$1,778.5 million in FY19/20 to S$1,849.9 million in FY20/21. Recurring PATMI4 remained robust at S$633.3 million. This attests to the resilience of the Group’s business model and operating business despite the full-year impact of Covid-19.
The Group’s diversified portfolio bolstered FY20/21’s results, especially with our exposure to the logistics and data centre sectors. Assets in these sectors make up the largest proportion of Mapletree’s assets under management (AUM) at 36%.
THIRD FIVE-YEAR PLAN Conversely, we have less exposure to the retail and lodging sectors, which were Key Performance Targets FY20/21 adversely affected by the pandemic. Indicators (KPIs) by FY23/24 Final Results Returns 2) You mentioned that the impact Average ROIE1,2 10% to 15% 15.1% of Covid-19 has been uneven Average ROE2,3 10% to 15% 10.9% across asset classes. Could you Earnings/Cash Flow expand on the operational Average Recurring PATMI2,4 S$900 million to S$1 billion S$692.7 million impact this has had on Mapletree’s business? Recycled Proceeds5,6 >S$20 billion S$8.8 billion Logistics and data centres continued Capital Management to outperform during the Covid-19 Fee Income5 >S$2.5 billion S$883.6 million pandemic period, underpinned by changing consumer shopping AUM ratio >3x 2.4x patterns, resulting in the rapid growth AUM S$80 billion to S$90 billion S$66.3 billion of e-commerce as well as the growing
13 Interview with the Group CEO
need for data hosting and cloud Mapletree’s office assets remained of gross floor area (GFA), the asset is services. Accordingly, we have deployed stable, with a slight uptick in EBIT + located in Chakan, Pune, and is due the largest component of capital SOA7 contribution to 44.2% in FY20/21, for completion by Q2 2022. The Group amounting to S$2.3 billion into the partly due to the contribution of newly subsequently acquired fully completed logistics and data centre sectors, which acquired offices in South Korea, the warehouses adjacent to these assets, have contributed S$596.2 million or Netherlands and the US. resulting in Mapletree owning the entire 32% to EBIT + SOA7 in FY20/21. logistics park spanning approximately 103,268 sqm in GFA. In addition to Mapletree’s resilient earnings is 3) What contributed to the Mapletree’s current office assets in underscored by our ability to identify expansion of Mapletree’s AUM Bengaluru, Chennai and Pune, our and invest in asset classes with commercial footprint grew to include attractive long-term returns while to S$66.3 billion in FY20/21? Mumbai through the acquisition of limiting exposure to weaker sectors. From Mapletree’s beginnings as a around 25,516 sqm of land for office We have a healthy recurring PATMI4, Singapore-focused real estate company development. contributed by our existing operations with S$2.3 billion in AUM in 2000, we and further enhanced by full-year have expanded globally into markets In the US, the Group acquired 11 office contributions from data centre assets beyond Asia and diversified our asset buildings in Raleigh, North Carolina; in the United States (US) and Global classes – all while executing significant Uptown Station in Oakland, California; Technology Park in Bengaluru, India. business growth in a calibrated and and Galatyn Commons, a four-building disciplined manner. With a strong office portfolio in Richardson, Texas. However, the lodging and retail sectors balance sheet backed by our robust These acquisitions at a total investment experienced weaker performance amid and tested business model, we have value of US$1 billion (~S$1.3 billion) persistent travel restrictions and social built up sufficient financial flexibility not deepened Mapletree’s presence in the distancing measures. We also had only to meet our current commitments, US commercial market and will be part to implement rent relief measures to but also to capitalise on future growth of the seed portfolio for an upcoming support our tenants. As at 31 March opportunities. private fund – Mapletree US Income 2021, contribution to Mapletree’s EBIT Commercial Trust (MUSIC) – earmarked + SOA7 declined year-on-year (y-o-y) by Investment acquisitions for syndication during FY21/22. 6.5% for retail and 45.4% for lodging. Mapletree acquired its maiden logistics Nevertheless, these two asset classes asset in India in May 2020 through In Europe, Mapletree entered the fared better than originally anticipated a forward purchase agreement. Dutch commercial market by acquiring at the start of FY20/21. Comprising three warehouses covering six office buildings in Papendorp Park about 58,818 square metres (sqm) in Utrecht for EUR147 million (~S$236 million), forming part of the Mapletree Europe Income Trust (MERIT) portfolio. Logistics developments In November 2020, Mapletree acquired a prime land parcel measuring 116,431 sqm in Chikushino, Fukuoka prefecture, Japan. Upon completion in Spring 2024, it will be transformed into two blocks of multi-storey logistics facilities with a combined GFA of 231,956 sqm and total investment at more than S$550 million. This will be Kyushu’s largest logistics warehouse.
In the same month, Mapletree acquired Located in Morrisville, North Carolina, the US, 1009 Think Place is a single-tenanted office building fully let a 36.3-hectare (ha) site in Brisbane, to Microsoft Corporation. Australia which will be developed into
14 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Mapletree Logistics Park – Crestmead. by 2023, the approximately 4,000 sqm University City, a 405-unit project close The project will deliver approximately site in Fanling, New Territories is to the University of Pennsylvania. 200,000 sqm of high-grade logistics well-located to provide good warehousing and office space across connectivity for cloud players in the Mapletree also acquired New Century nine buildings. neighbouring Shenzhen, China. Place Building 3, a 135-bed student housing asset near Reading University We extended our presence in the Residential developments in the UK. China logistics market with another In Singapore, Mapletree launched 16 logistics parks completed in FY20/21. The Reef at King’s Dock, a 429-unit A total of 48 projects are currently landmark waterfront residential 4) Can you tell us more about under development, including 12 newly property situated in the HarbourFront how Mapletree’s capital acquired sites. As at 31 March 2021, Precinct. As at 31 March 2021, 80% of Mapletree operates 58 logistics total units have been sold. management platforms properties spanning 39 cities in China, performed? covering a total net lettable area (NLA) Mapletree’s China residential Over the last decade, Mapletree has of about 4.2 million sqm. development portfolio continued to grown its third-party funds under expand amid positive reception. In management by more than five times Mapletree’s logistics developments in FY20/21, the Group acquired two to approximately S$26 billion as at Southeast Asia are also progressing well. sites in Guangzhou and Wuxi. Yielding 31 March 2021, a 10.6% increase y-o-y. In Shah Alam, Malaysia, construction about 800 and 1,400 residential units commenced for the development respectively, the projects are conveniently Real estate investment trusts of a Grade A, four-storey ramp-up located next to existing metro stations. (REITs) warehouse facility. With the completion As at 31 March 2021, Nanhai Business Since Mapletree Logistics Trust (MLT) of several logistics parks in Northern City in Foshan had fully sold all 2,743 was listed in 2005, our stable of and Southern Vietnam, approximately residential units. Similarly, Mapletree Mapletree-sponsored Singapore-listed 440,000 sqm of GFA will be added to Ningbo Mixed-Use Development sold REITs has grown to four. Diversified in the portfolio. The Group is acquiring 100% of residential units and carparks. asset class and geography, they continue another 39.5-ha site in North Vietnam to be well-received by both institutional for development into approximately Office developments and retail investors as they provide 250,000 sqm of logistics facilities. In the United Kingdom (UK), Mapletree stable and consistent total returns even completed the development of 400 and in challenging times. In FY20/21, MLT, The Group also actively pursues 450 Longwater Avenue located within MIT, Mapletree Commercial Trust (MCT) building expansion opportunities to the landmark development, Green Park. and Mapletree North Asia Commercial boost the attractiveness of existing Each building comprises 10,869 sqm of Trust (MNACT) generated healthy total properties for tenants and investors. In column-free, premium office space that returns of 27.4%, 17.9%8, 21.0% and China, we expanded the GFA of Ouluo will benefit from its close proximity to 37.5%9 respectively. Logistics Park Phase 2 by 36,193 sqm in the new Green Park station. In March July 2020. We also rejuvenated assets 2021, an agreement was signed to lease Distributions per unit (DPU) and unit in the Mapletree US & EU Logistics 450 Longwater Avenue to one of UK’s prices of our four REITs have continued Private Trust (MUSEL) portfolio in early largest mobile network operators for 15 to grow since inception. Mapletree’s 2021 by completing an extension years. The refurbishment of 100 Brook REITs achieved sustained organic measuring approximately 14,500 sqm Drive and a café space in 100 Longwater growth through operations and asset for a property in Ohio, the US; as well Avenue were also completed, along with enhancement initiatives complemented as commencing the addition of 10,000 the successful leasing of 350 Brook Drive by strategic and accretive acquisitions. sqm of space to a property in France. on an eight-year term. As sponsor, Mapletree enhances the Data centre development Student housing development REIT portfolios through joint ventures for In February 2021, Mapletree won a and acquisition acquisitions at an attractive yield spread, HK$813 million (~S$140.4 million) land In December 2020, Mapletree in addition to providing a healthy pipeline tender to develop a data centre in completed its first US student housing of assets. This financial year, we embarked Hong Kong SAR. Slated for completion development project, The Chestnut at on several such opportunities.
15 Interview with the Group CEO
In October 2020, Mapletree and MNACT co-invested in The Pinnacle Gangnam, a freehold office building in Seoul, South Korea for KRW452 billion (~S$535.1 million). The joint venture was a timely opportunity to diversify MNACT’s portfolio with the Trust’s first office asset in Seoul via a premium Grade A property acquired at an attractive yield spread. Moreover, the quality acquisition strengthened both Mapletree and MNACT’s balance sheet by providing a stable and growing income stream.
Other prospects that Mapletree supported as a sponsor include MLT’s acquisition of nine high-quality Grade A logistics facilities located in the key
logistics hubs of China, Malaysia and Mapletree Ningbo Mixed-Use Development Project spans 8.5 ha and comprises a mall, 13 residential Vietnam, as well as the remaining 50% blocks, street shops and a medical centre. The project is located in the Jiangbei district, earmarked as the interest in 15 logistics properties in new central business district. China. The DPU and net asset value accretive acquisitions deepened MLT’s network connectivity, enabling tenants MIT obtained its inaugural S$300 the addition of MIT to the FTSE Straits to build supply chain resilience. Along million sustainability-linked facility in Times Index on 22 June 2020, three with this, Mapletree successfully December 2020. With a tenor of up to out of Mapletree’s four REITs are now freed up S$600 million of capital for six years, MIT can use the proceeds for represented on the benchmark index. reinvestment in FY20/21. general working capital and corporate funding purposes. Private real estate funds MIT completed the acquisition of the In March 2021, Mapletree announced balance 60% interest for 14 US data MNACT obtained two green loan the successful closing of its first centres held under Mapletree Redwood facilities in August 2020 and March 2021 European office fund, MERIT. With Data Centre Trust in September amounting to HK$1.2 billion (~S$207.3 EUR507 million (~S$812.9 million) in 2020. The acquisition increased MIT’s million) for loans relating to Festival total fund equity and total asset value exposure to the resilient data centre Walk in Hong Kong SAR, which has of EUR1.2 billion (~S$1.9 billion), market while enlarging its presence in been certified a Final Platinum rating by MERIT is fully invested at closing and the US, the largest data centre market Hong Kong Green Building Council. consists of seven Grade A properties in in the world. key European and UK cities. MLT expanded its green financing I am pleased that all four Mapletree- options in FY20/21 by securing two MERIT targets a 12% internal rate sponsored REITs have continued to green loan facilities amounting to of return (IRR)10, and will provide a make inroads into sustainable financing S$350 million. Proceeds from the robust and stable income stream from options. MCT secured S$370 million facilities will be used to finance working a portfolio of high quality commercial of green loan facilities in FY20/21 to capital requirements that are in line assets, anchored by long lease refinance loans for MCT’s properties with the eligibility criteria of MLT’s profiles. The successful syndication which have been certified BCA Green green loan framework. of MERIT despite challenging market Mark GoldPLUS or better. Specifically, conditions reflects investors’ confidence Mapletree Business City (MBC) I, MBC Mapletree’s capabilities as a capital in Mapletree’s fund management II and VivoCity are certified BCA Green manager and sponsor continued to capability and track record. Mark Platinum. be recognised in FY20/21. Following
16 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 In addition to MERIT, Mapletree launching three new fund products in the weaker performances by the Group’s manages four other active funds – FY21/22, which may comprise US office retail and lodging assets resulting from namely Mapletree China Opportunity buildings, US logistics assets and China the Covid-19 pandemic. Nonetheless, Fund II (MCOF II), Mapletree Global co-investment opportunities. we endeavour to catch up on this when Student Accommodation Private Trust the global Covid-19 situation improves (MGSA), Mapletree Australia Commercial We continue to receive strong interest over the next three years. Private Trust (MASCOT) and MUSEL. from investors for our private funds. As at 31 March 2021, the Group is As at 31 March 2021, Mapletree’s In June 2020, MJLD achieved a managing or has managed 15 public AUM was up by 9.7% to S$66.3 billion. successful exit. Launched in 2014, and private capital management However, net gearing dropped by the fund’s objective was to invest in vehicles on behalf of institutional as well 2% to 60.5% from FY19/20’s 62.5% logistics development assets and select as high net worth and retail investors. due to reinvestment and syndication completed logistics assets in Japan. Our resilient real estate portfolio offers activities. In tandem with the increasing MJLD realised a return of 1.8 times investors exposure to diversified and concentration and intensity of our equity multiple and net IRR10 of 23.7%, sector-focused vehicles to deliver capital management activities, we have significantly above the target of exceptional long-term investment boosted our AUM ratio to 2.4 times 13% to 15%. performance. We have established in FY20/21. a good track record to reward our MJLD joins Mapletree’s portfolio of investors who have entrusted their fully realised funds with a track record investments alongside us. 1 ROIE is computed based on adjusted* PATMI of positive net IRR10. These include over the Group’s equity held at original Mapletree India China Fund (13.6%), The Group’s further expansion in the invested cost (OIC). 2 From FY19/20 to FY20/21. MJOF (27.2%), Mapletree Industrial various markets is backed by a strong 3 ROE denotes return on equity and is Fund (15.1%), Mapletree Industrial Trust team on the ground to source for computed based on PATMI attributable – Private (19.1%) as well as Mapletree to Equity Holder of the Company over opportunities as well as to execute shareholder’s funds. Real Estate Mezzanine Fund (25.3%). asset and property management of our 4 PATMI denotes net profit after tax and non- assets. Mapletree will continue to grow controlling interests attributable to Perpetual Securities Holders and Equity Holder of the its onshore offices with local talents Company. 5) Does Mapletree intend in new locations in support of our 5 KPIs measured on a five-year cumulative basis. expansion plans. Currently, we have 6 Measured on Mapletree Investments’ balance to launch more capital sheet perspective (excluding REITs and private 22 offices in 13 markets worldwide. funds). management vehicles? 7 Earnings before interest and tax (EBIT) plus Yes, we plan to sponsor more private share of operating profit or loss of associated funds as well as public-listed REITs, as companies and joint ventures (SOA), excluding 6) How is Mapletree’s third residential profits, incentive fee from private this is part and parcel of Mapletree’s funds’ divestment, revaluation gains or losses, business model to reinvest our capital Five-Year Plan progressing? divestment gains or losses, foreign exchange and derivatives gains or losses. and at the same time to structure We have completed the second year of 8 Sum of distributions and capital appreciation appropriate products for our investors. our current Five-Year Plan and are on for the period over the closing unit price of For the remaining period of the current track to achieve most of the KPIs. Most S$2.430 as at 31 March 2020. 9 Sum of the percentage increase in unit price Five-Year Plan, the Group will be looking importantly, the Group has focused on and total distribution yield for the period. at putting together suitable portfolios attaining the returns targets set out. Total distribution yield for FY20/21 is based on available DPU to Unitholders of 6.175 to launch new funds and REITs. Singapore cents for FY20/21 over closing unit Average ROIE1,2 and Average ROE2,3 price of S$1.06 as at 31 March 2021. Notwithstanding the current challenges since FY19/20 stand at 15.1% and 10 After expenses, taxes and base management fee but before carried interest. posed by the pandemic, we will 10.9% respectively. Fee income grew continue to identify and structure to S$365.8 million in FY20/21, putting * Adjusted to exclude non-cash and non- appropriate syndication products to us on track to achieving our Five-Year operating items such as unrealised revaluations gains or losses, mark-to-market meet investors’ demand and aim to returns target. fair value adjustments, gains and losses on launch at least one to two new funds foreign exchange, negative goodwill and 2,4 dilution gains and losses and include OIC or REITs each year. Our asset pipeline However, Average Recurring PATMI gains from any gains and losses on disposal looks healthy and we are confident of dipped slightly to S$692.7 million due to and corporate restructuring surplus or deficit.
17 board of directors
18 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Mapletree adopts the principle that an effective Board of Directors (Board) is one constituted with the right core competencies and diversity of experiences for the growth and success of the Group. The collective wisdom of the Board provides strategic guidance and diverse insights to support the Management.
FROM LEFT TO RIGHT (STANDING): Paul Ma Kah Woh Cheah Kim Teck David Christopher Ryan Wong Meng Meng Tsang Yam Pui Samuel N. Tsien Lee Chong Kwee
FROM LEFT TO RIGHT (SEATED): Elaine Teo Hiew Yoon Khong Edmund Cheng Lim Hng Kiang
19 board of directors
EDMUND CHENG, 68 LEE CHONG KWEE, 64 PAUL MA KAH WOH, 73 CHAIRMAN DIRECTOR DIRECTOR
Mr Edmund Cheng is the Chairman of Mr Lee Chong Kwee is a member of Mr Paul Ma Kah Woh is a member of the Board of Directors of Mapletree the MIPL Board and the Chairman of its the MIPL Board and its Audit and Risk Investments Pte Ltd (MIPL). He is also Audit and Risk Committee as well as its Committee and Executive Resource the Chairman of its Executive Resource Transaction Review Committee. and Compensation Committee as and Compensation Committee, and well as Investment Committee. He is Investment Committee. He is also the Non-Executive also the Non-Executive Chairman of Chairman of Mapletree Logistics Mapletree North Asia Commercial Mr Cheng is concurrently the Deputy Trust Management Ltd, the manager Trust Management Ltd, the manager of Chairman of Wing Tai Holdings Limited, of Mapletree Logistics Trust, and a Mapletree North Asia Commercial Trust. as well as the Chairman of the Civil Corporate Advisor to Temasek Holdings Aviation Authority of Singapore and (Private) Limited. Mr Lee was previously Concurrently, Mr Ma is a Director of the Singapore Art Museum. Non-Executive Chairman of Jurong StarHub Ltd (listed on the Main Port Pte Ltd and also served on the Board of the Singapore Exchange). Mr Cheng has been actively engaged Governing Council of the Singapore In addition, Mr Ma is a member of the in the service of public and private Institute of Directors and the Advisory advisory board of the Asian Civilisations sectors. He has chaired companies Boards of the National University of Museum. and statutory boards governing airport Singapore Business School and cargo, gateway passenger services and The Logistics Institute – Asia Pacific. Until 29 February 2020, Mr Ma was also food solutions, civil aviation, arts and a Director of PACC Offshore Services design, as well as national tourism. Mr Lee was formerly the Asia Pacific Holdings Ltd. Mr Ma is a fellow of the He was also a director of Singapore Chief Executive Officer of Exel Institute of Chartered Accountants Airlines Limited and Urban (Singapore) Pte Ltd and is a fellow of in England and Wales as well as a Redevelopment Authority, and a the Singapore Institute of Directors. member of the Institute of Singapore past President of the Real Estate Chartered Accountants. Developers’ Association of Singapore (REDAS).
Mr Cheng was awarded the Meritorious Service Medal, Public Service Star (Bar) and Public Service Star (BBM). He also received the Outstanding Contribution to Tourism Award from the Singapore Government. He was conferred “Officier de l’Ordre des Arts et des Lettres” by the Government of the Republic of France.
20 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 TSANG YAM PUI, 74 WONG MENG MENG, 72 DAVID CHRISTOPHER RYAN, 51 DIRECTOR DIRECTOR DIRECTOR
Mr Tsang Yam Pui is a member of Mr Wong Meng Meng, Senior Counsel, Mr David Christopher Ryan is a the MIPL Board and its Audit and is a member of the MIPL Board, its member of the MIPL Board and its Risk Committee. He is also the Audit and Risk Committee as well as Investment Committee. Mr Ryan also Non-Executive Chairman of Mapletree its Transaction Review Committee. serves as Chairman of Mapletree Commercial Trust Management Ltd, Mr Wong is also the Non-Executive Oakwood Holdings Pte Ltd, a member the manager of Mapletree Commercial Chairman of Mapletree Industrial of the board of the Jackson Institute Trust. Trust Management Ltd, the Manager for Global Affairs at Yale University, of Mapletree Industrial Trust and a and as an independent director for Mr Tsang is currently a Non-Executive Director of NIE International Private World Lacrosse. Mr Ryan is also Director of Bolonia Company Limited. Limited. a Non-Executive Director of ADT He was formerly the Chief Executive Security Services Corporation and Officer and Executive Director of Mr Wong is the Founder-Consultant Tiga Acquisition Corp. NWS Holdings Limited from June 2004 of WongPartnership LLP, a leading law until his retirement on 31 December firm in Singapore. He is also a member Mr Ryan was the President of Goldman 2018, and continued to serve as a of the Competition Appeal Board, Sachs Asia (ex Japan) from 2010 to Non-Executive Director until 31 Singapore. Mr Wong was previously 2013, where he served on the firm’s December 2020. a member of the Quality Assurance Management Committee. Mr Ryan Framework for Universities (QAFU) joined Goldman Sachs in 1992, and Prior to Mr Tsang’s appointment with Panel until 31 December 2019. spent nine years in Asia before returning NWS Holdings Limited, he served in the to the United States in end 2013. Hong Kong Police Force for 38 years where he held many key appointments In addition to his role on the MIPL before retiring as its Commissioner Board, Mr Ryan remains a Senior in 2003. Director of Goldman Sachs & Co and serves as a Corporate Advisor For his distinguished public service, to Temasek Holdings (Private) Limited. Mr Tsang was awarded the Gold Bauhinia Star (Hong Kong SAR), the Order of the British Empire, the Queen’s Police Medal and the Colonial Police Medal for Meritorious Service.
21 board of directors
LIM HNG KIANG, 67 SAMUEL N. TSIEN, 66 ELAINE TEO, 54 DIRECTOR DIRECTOR DIRECTOR
Mr Lim Hng Kiang is a member of Mr Samuel N. Tsien is a member of the Ms Elaine Teo is a member of the the MIPL Board and its Investment MIPL Board. MIPL Board and its Transaction Review Committee. Committee. Mr Tsien is Adviser to the Board of He is currently the Special Advisor to the Oversea-Chinese Banking Corporation She is currently a Non-Executive Ministry of Trade and Industry. He is also Limited (OCBC), upon his retirement and Independent Director of Olam the Deputy Chairman of the Monetary as Group Chief Executive Officer and International Limited and G.K. Goh Authority of Singapore and a Director Executive Director of OCBC (15 April Holdings Limited, as well as ICHX of GIC. 2012 to 14 April 2021). He is also a Tech Pte Ltd. Ms Teo’s investment member of the Board of Directors experience was built at the Capital Mr Lim was Minister for Trade and of OCBC Wing Hang Bank Limited Group companies where she focused Industry from 2004 until 2015, when in Hong Kong SAR. Prior to these on Asian banks and global emerging the Ministry was carved into two appointments, he served as the Senior markets, both as an analyst and an portfolios. He was then appointed Executive Vice President and Global investment manager. She was formerly Minister for Trade and Industry (Trade) Head, Global Corporate Bank of OCBC the Chairman of Capital International until he stepped down in May 2018. when he joined OCBC in July 2007. Research Inc. and Managing Director In his current appointment, Mr Lim of Capital International Inc., Asia. Ms provides advice on the Ministry’s Before joining OCBC, Mr Tsien was Teo was previously a Senior Advisor economic strategies to grow Singapore’s President and Chief Executive Officer and Partner at the Holdingham Group capabilities and international economic of Bank of America (Asia) from 1995 Ltd and a member on the International space. He has held Cabinet posts in to 2006, and President and Chief Advisory Panel of CIMB Group Holdings National Development, Health, Foreign Executive Officer of China Construction Berhad (listed on Bursa Malaysia). Affairs, Finance and the Prime Minister’s Bank (Asia) Corporation Ltd in 2007. Office. Before entering politics in 1991, He had concurrently served as Ms Teo is the Chairman of The TENG he was Deputy Secretary in the Ministry Executive Vice President and Asia Ensemble Ltd, an arts company focused of National Development. Commercial and Consumer Banking on the development of a Singaporean Group Executive of Bank of America musical identity. She was formerly a Mr Lim graduated from Cambridge Corporation during 1996 to 2006. Director of Caregivers Alliance Ltd, University with First Class Honours a non-profit organisation focused on (Distinction) in Engineering. He Mr Tsien had held other senior training and support of caregivers to later earned a Masters in Public management positions in corporate persons with mental illness in Singapore, Administration from Harvard University. banking, retail banking and risk as well as a member of the International management at Bank of America in Development Group of the Jesuit Hong Kong SAR and San Francisco. Refugee Service.
Ms Teo holds a Bachelor of Arts (Honours) degree in Experimental Psychology from Oxford University.
22 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 CHEAH KIM TECK, 69 HIEW YOON KHONG, 59 DIRECTOR EXECUTIVE DIRECTOR AND GROUP CHIEF EXECUTIVE OFFICER
Mr Cheah Kim Teck is a member of Mr Hiew is a member of the MIPL the MIPL Board and was formerly an Board and its Group Chief Executive Independent Director and a member Officer. He is also a Non-Executive of the Audit and Risk Committee of Director of Mapletree Commercial Trust Mapletree Logistics Trust Management Management Ltd and was formerly a Ltd. Non-Executive Director at Mapletree Logistics Trust Management Ltd, Mr Cheah is currently the Managing Mapletree Industrial Trust Management Director, Business Development of Ltd, and Mapletree North Asia Jardine Cycle & Carriage Limited Commercial Trust Management Ltd. (JC&C), and is responsible for overseeing JC&C’s investment in Truong Mr Hiew joined Mapletree in 2003 as Hai Auto Corporation and developing Group Chief Executive Officer. He has new lines of business in the region. since led the Group from a Singapore- centric real estate company worth He was formerly the Chief Executive S$2.3 billion to a global company with Officer for JC&C’s motor operations total assets under management of (excluding those held by PT Astra more than S$66.3 billion. International Tbk) until he stepped down from his position in December 2013. His past directorships include serving as He also served on JC&C’s Board from a member on the Board of Trustees of 2005 to 2014. Prior to joining JC&C, the National University of Singapore and Mr Cheah held several senior marketing Board member of Sentosa Development positions in multinational companies, Corporation. namely, McDonald’s Restaurants, Kentucky Fried Chicken and Coca-Cola. Mr Hiew holds a Master of Arts degree Mr Cheah was formerly a Director of in Economics from the University of Singapore Pools (Private) Limited. Warwick, and a Bachelor of Arts degree in Economics from the University of Mr Cheah holds a Master of Marketing Portsmouth. degree from the University of Lancaster, United Kingdom.
23 GROUP SENIOR MANAGEMENT
HIEW YOON KHONG, 59 CHUA TIOW CHYE, 62 WENDY KOH MUI AI, 49 EXECUTIVE DIRECTOR AND DEPUTY GROUP CHIEF EXECUTIVE GROUP CHIEF FINANCIAL OFFICER GROUP CHIEF EXECUTIVE OFFICER OFFICER
Mr Hiew is a member of the Mapletree Mr Chua, as Deputy Group Chief Ms Koh, as Group Chief Financial Officer, Investments Pte Ltd (MIPL) Board and its Executive Officer, focuses on driving oversees the Finance, Information Group Chief Executive Officer. He is also the Group’s strategic initiatives Systems & Technology, Tax, and Treasury a Non-Executive Director of Mapletree including expanding and directing the functions of the Mapletree Group. Commercial Trust Management Ltd and Mapletree Group’s international real was formerly a Non-Executive Director at estate investments and developments. She is also a Non-Executive Mapletree Logistics Trust Management He also directly oversees the Group’s Director of Mapletree Logistics Trust Ltd, Mapletree Industrial Trust Global Lodging sector as well as the Management Ltd, Mapletree Industrial Management Ltd, and Mapletree North Private Capital Management function Trust Management Ltd, Mapletree Asia Commercial Trust Management Ltd. of the Group. Previously, Mr Chua was Commercial Trust Management Ltd the Group Chief Investment Officer and Mapletree North Asia Commercial Mr Hiew joined Mapletree in 2003 as and Regional Chief Executive Officer of Trust Management Ltd. She also serves Group Chief Executive Officer. He has North Asia & New Markets. as the Chairman of the Singapore since led the Group from a Singapore- Management University (SMU) Advisory centric real estate company worth Mr Chua concurrently serves as a Board for the Real Estate Programme. S$2.3 billion to a global company with Non-Executive Director of Mapletree total assets under management of more Industrial Trust Management Ltd and Prior to this, she was the Regional than S$66.3 billion. Mapletree North Asia Commercial Chief Executive Officer, South East Asia Trust Management Ltd. He was also (August 2014 to July 2019), heading the His past directorships include serving as previously the Chief Executive Officer Group’s business in Southeast Asia and a member on the Board of Trustees of of Mapletree Logistics Trust Head, Strategy and Research (2014). the National University of Singapore and Management Ltd. She was previously engaged by Board member of Sentosa Development Mapletree as an advisor to review the Corporation. Prior to joining Mapletree in 2002, Group’s strategy implementation from Mr Chua held senior positions with FY09/10 to FY13/14, and was involved Mr Hiew holds a Master of Arts degree various companies including Vision in the formulation of Mapletree’s second in Economics from the University of Century Corporation Ltd, Ascendas Five-Year Plan. Warwick, and a Bachelor of Arts degree Pte Ltd, Singapore Food Industries in Economics from the University of Pte Ltd and United Overseas Bank Ltd. Before joining Mapletree, Ms Koh was Portsmouth. Co-head, Asia Pacific Property Research, Mr Chua holds a Master of Business at Citi Investment Research. Administration from the University of Strathclyde and graduated with a Ms Koh holds a Bachelor of Business Bachelor of Regional and Town Planning (Honours) degree specialising in Financial (1st Class Honours) from the University of Analysis from the Nanyang Technological Queensland in 1982. University, Singapore and the professional designation of Chartered Financial Analyst from the CFA Institute.
24 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 WAN KWONG WENG, 49 TAN WEE SENG, 55 WONG MUN HOONG, 55 GROUP CHIEF CORPORATE OFFICER GROUP CHIEF DEVELOPMENT OFFICER REGIONAL CHIEF EXECUTIVE OFFICER, AUSTRALIA & NORTH ASIA
Mr Wan is responsible for all of legal, Mr Tan oversees the execution of all Mr Wong, as Regional Chief Executive compliance, corporate secretarial, development projects, including asset Officer of Australia & North Asia, is human resource as well as corporate enhancement initiatives undertaken overall responsible for and drives the communications and administration within the Mapletree Group across all Group’s non-REIT businesses in Australia matters across all business units and business units and countries. and North Asia, which includes Hong countries. He is also the Joint Company Kong SAR, Japan and South Korea. Secretary of MIPL and the four Mapletree Prior to joining Mapletree in 2012, REIT Managers. In addition, Mr Wan is a he spent 18 years with Lendlease Group He is also a Non-Executive Director of Member/Secretary of the SMU Advisory in various senior positions. Mapletree Logistics Trust Management Board for the Real Estate Programme. Ltd.
Prior to joining Mapletree as General From 2006 to July 2019, Mr Wong was Counsel in 2009, Mr Wan was Group the Group Chief Financial Officer of General Counsel – Asia at Infineon Mapletree, overseeing the Finance, Tax, Technologies for seven years, where Treasury and Private Funds Management he was a key member of its Asia-Pacific functions of the Group. Prior to joining management team. He started his Mapletree in 2006, Mr Wong had career as a litigation lawyer with one of over 14 years of investment banking the oldest law firms in Singapore, Wee experience in Asia, of which the last Swee Teow & Co., and was subsequently 10 years were with Merrill Lynch & Co with the Corporate & Commercial/ having worked at its Singapore, Private Equity practice group of Baker & Hong Kong SAR and Tokyo offices. McKenzie in Singapore and Sydney. Mr Wong graduated with a Bachelor of Mr Wan has an LL.B. (Honours) Accountancy (Honours) degree from the (Newcastle upon Tyne), where he was National University of Singapore in 1990, conferred the Wise Speke Prize, as well and holds the professional designation as an LL.M. (Merit) (London). He also of Chartered Financial Analyst from the attended the London Business School CFA Institute of the United States. He Senior Executive Programme. Mr Wan attended the Advanced Management is called to the Singapore Bar, where Programme at INSEAD Business School. he was awarded the Justice FA Chua Memorial Prize, and is also on the Rolls of Solicitors (England & Wales). He was conferred the Public Service Medal (PBM) in 2012 and Public Service Star (BBM) in 2017 for his contributions to Central Singapore CDC.
25 GROUP SENIOR MANAGEMENT
AMY NG LEE HOON, 54 MICHAEL SMITH, 52 QUEK KWANG MENG, 55 REGIONAL CHIEF EXECUTIVE OFFICER, REGIONAL CHIEF EXECUTIVE OFFICER, REGIONAL CHIEF EXECUTIVE OFFICER, SOUTH EAST ASIA AND GROUP RETAIL EUROPE AND USA INDIA
Ms Ng, as Regional Chief Executive Mr Smith, as Regional Chief Executive Mr Quek, as Regional Chief Executive Officer, South East Asia and Group Officer of Europe and USA, is Officer of India, heads Mapletree’s Retail, oversees the Group’s portfolio* responsible for new and existing business and investments in India. in Singapore and the rest of Southeast businesses in Europe and the United He has direct responsibility over the Asia region. She also has direct States (excluding Group Lodging). He Group’s assets* in this market. Before responsibility over the Group’s retail is also a Non-Executive Director of his current appointment in June 2016, assets and operations in Singapore, Mapletree Industrial Trust Management Mr Quek was also overseeing the China, Malaysia and Vietnam, where she Ltd and a member of the Singapore Group’s non-REIT activities in the provides executive management and Exchange Disciplinary Committee. China market. leadership. She is also a Non-Executive Director of Mapletree Commercial Trust Prior to joining Mapletree, Mr Smith was Prior to joining Mapletree, Mr Quek Management Ltd. a partner at Goldman Sachs, heading was the Global Co-head/Managing the South East Asia investment banking Director for real estate investments in Ms Ng joined Mapletree in 2010 business as well as the bank’s Asia-Pacific Citi Private Bank. as the Chief Executive Officer of (ex Japan) real estate business. As one of Singapore Investments. She was the the pioneers of the Asian REIT industry, * excludes assets held by REITs. Chief Executive Officer and Executive Mr Smith has been involved in numerous Director of Mapletree Commercial IPOs of REITs, including the four Trust Management Ltd from 2011 to Mapletree REITs – namely Mapletree July 2015, and was responsible for the Logistics Trust, Mapletree Industrial initial public offering (IPO) of Mapletree Trust, Mapletree Commercial Trust Commercial Trust in April 2011. Prior to and Mapletree North Asia Commercial joining Mapletree, Ms Ng held various Trust – on the Singapore Exchange appointments in the CapitaLand group Limited. He was also involved in various of companies. significant transactions undertaken by the Group including the acquisition * excludes assets held by REITs. of Festival Walk in Hong Kong SAR, Gateway Plaza in Beijing, as well as in the collaboration with Oakwood in 2014.
Mr Smith has over 25 years of investment banking experience and prior to Goldman Sachs, Mr Smith was the head of Asia (ex Japan) Real Estate Investment Banking of UBS from 2000 to 2006.
26 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 GOH CHYE BOON, 51 LEE ARK BOON, 48 NG KIAT, 51 REGIONAL CHIEF EXECUTIVE OFFICER, CHIEF EXECUTIVE OFFICER, CHIEF EXECUTIVE OFFICER, CHINA LOGISTICS DEVELOPMENT, CHINA MAPLETREE LOGISTICS TRUST MANAGEMENT LTD
Mr Goh, as the Regional Chief Executive Mr Lee, as Chief Executive Officer, Ms Ng is the Chief Executive Officer Officer of China, oversees the whole Logistics Development, China, is and an Executive Director of Mapletree of Mapletree’s China business. He has responsible for both new and existing Logistics Trust Management Ltd. direct responsibility over the Group’s logistics development in China. Prior to her appointment in July 2012, non-REIT business in China market, Ms Ng was Mapletree’s Chief Investment driving investments and operations for Prior to joining Mapletree, Mr Lee Officer, South East Asia, where she the region’s business platform. He is also was the Chief Executive Officer of was responsible for managing the a Non-Executive Director of Mapletree International Enterprise Singapore acquisitions, development and Logistics Trust Management Ltd. and preceding that, he was the operations of Mapletree’s investment Deputy Secretary (Trade) at the portfolio in the region. She was also Prior to this appointment, Mr Goh was Ministry of Trade and Industry. previously Mapletree’s Chief Executive the Chief Executive Officer, Logistics His other working experience include Officer, Vietnam. Development, China. the Ministry of Manpower, National Security Coordination Secretariat Prior to joining Mapletree in 2007, His 24 years of wide-ranging work (Prime Minister’s Office), Ministry of Ms Ng was with Temasek Holdings experience included stints at the Transport, Public Service Division (Private) Limited for five years, Ministry of Finance, Monetary Authority (Prime Minister’s Office) and Ministry managing private equity fund of Singapore and Ministry of Trade of Foreign Affairs. investments. Preceding that, Ms Ng and Industry. In addition, he was the was Vice President at the CapitaLand former Chief Executive Officer of Mr Lee was awarded the Public group of companies, where she was Sino-Singapore Tianjin Eco-City Administration Medal (Silver) for his responsible for real estate investments Investment & Development Co Ltd contributions to the public service. and cross-border mergers and and also previously headed the China He holds a Master of Arts in International acquisitions activities in Southeast Asia Business Partnership Unit of GIC China. Economics from Yale University and a and Europe. Bachelor of Arts (Highest Honors) in Mr Goh graduated from the London Economics from University of California, School of Economics with first class Berkeley. honours in econometrics. He holds a Master in Public Administration from Harvard University.
27 GROUP SENIOR MANAGEMENT
THAM KUO WEI, 52 SHARON LIM HWEE LI, 48 CINDY CHOW PEI PEI, 51 CHIEF EXECUTIVE OFFICER, CHIEF EXECUTIVE OFFICER, CHIEF EXECUTIVE OFFICER, MAPLETREE INDUSTRIAL TRUST MAPLETREE COMMERCIAL TRUST MAPLETREE NORTH ASIA COMMERCIAL MANAGEMENT LTD MANAGEMENT LTD TRUST MANAGEMENT LTD
Mr Tham is the Chief Executive Officer Ms Lim is the Chief Executive Officer Ms Chow is the Chief Executive and an Executive Director of Mapletree and an Executive Director of Mapletree Officer and an Executive Director of Industrial Trust Management Ltd. Commercial Trust Management Ltd Mapletree North Asia Commercial Trust He was previously the Deputy Chief (MCTM). She joined Mapletree in Management Ltd. She was previously Executive Officer and Chief Investment January 2015 as the Chief Operating the Chief Executive Officer, India, where Officer of Mapletree’s Industrial Officer of MCTM. she was instrumental in establishing business unit. In that capacity, he was Mapletree’s investments in the country. responsible for structuring, establishing Prior to joining Mapletree, Ms Lim was and managing real estate investment CapitaMalls Asia’s Country Head for Ms Chow joined Mapletree in 2002 as platforms in Singapore and the region. Malaysia since 2008 and was appointed a Business Development Manager. She as the Chief Executive Officer and later became the Senior Vice President Mr Tham joined Mapletree in 2002 and Executive Director of CapitaMalls and Head of Investment for Mapletree has since held various positions with Malaysia Trust, listed on Bursa Malaysia Logistics Trust Management Ltd. the Group. Prior to joining Mapletree, in 2010. he was in various engineering and logistics management roles with PSA Corporation.
28 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 AWARDS AND ACCOLADES
BCA Green Mark for Existing INVESTMENT AND CAPITAL Non-Residential Buildings 2021 RETAIL AND SERVICE MANAGEMENT (Platinum) (Super Low Energy) EXPERIENCE Building and Construction Authority, IPE Top 150 Real Estate Investment Award of Excellence 2020 Singapore Managers 2020 – Ranked 38th TrustYou • Mapletree Benoi Logistics Hub IPE Real Assets • Oakwood Residence Saigon • Mapletree Investments Pte Ltd BCA Green Mark for Existing Best Online Rating 2020 – Online Non-Residential Buildings 2021 (Gold) The Edge Singapore Billion Dollar Reputational Assessment Building and Construction Authority, Club 2020 – Highest Growth in J Turner Research Singapore Profit After Tax over Three Years • Denizen • 18 Tai Seng (REIT Category) The Edge Singapore Best Serviced Apartment Operator LEED Platinum Certificate 2021 • Mapletree Commercial Trust in China 2020 U.S. Green Building Council China Hotel Starlight Awards • The Sorting Office The Edge Singapore Billion Dollar • Oakwood Club 2020 – Highest Weighted BCA Green Mark for Existing Return on Equity over Three Years Best Serviced Residence in Non-Residential Buildings 2020 (Gold) (REIT Category) Asia-Pacific 2020 Building and Construction Authority, The Edge Singapore Business Traveller Asia-Pacific Awards Singapore • Mapletree Industrial Trust • Oakwood Premier AMTD Singapore • 5B Toh Guan Road East • K&S Corporate Headquarters Kowloon West Best Security Services Awards 2020 (Honorable Managed BUILDING EXCELLENCE BCA Green Mark for New Residential Property Award – Shopping Mall) China’s Top 10 Logistics Developers Buildings 2020 (GoldPLUS) Kowloon West Regional Crime in Operational Performance 2021 Building and Construction Authority, Prevention Office, Hong Kong SAR – Ranked 8th Singapore • Festival Walk Guandian.cn, China • The Reef at King’s Dock • Mapletree Investments Pte Ltd Leading Hotel, Conference Indoor Air Quality Certificate 2020 Hotel and Hotel Residences 2020 in The Outstanding Building of the Year (Good Class) – Common Areas of Vietnam Awards 2020 for the BOMA Southern Shopping Mall World Travel Awards Region (Under 100,000 Square Feet) Environmental Protection Department, • InterContinental Saigon Building Owners and Managers Hong Kong SAR Association • Festival Walk Leading Serviced Apartment Brand • 3300 Paramount Parkway 2020 in India, Japan, South Korea SG Clean Quality Mark Award 2020 and Thailand Enterprise Singapore World Travel Awards • HarbourFront Centre BUSINESS SUSTAINABILITY • Oakwood BCA Green Mark Certifications 2021 SG Clean Quality Mark Award 2020 PLUS Singapore Tourism Awards 2020 (Gold ) National Environment Agency, – Best Hotel Experience (Finalist) Building and Construction Authority, Singapore Singapore Tourism Board Singapore • 20 Harbour Drive • Oakwood Premier AMTD Singapore • Bank of America Merrill Lynch • HarbourFront Towers One and Two HarbourFront • mTower
For more information on our awards and accolades, please visit our website at www.mapletree.com.sg.
29 Mapletree owns and manages real estate assets across 13 markets. The Group grew its total assets under management (AUM) by 9.7% to S$66.3 billion in Financial Year 2020/2021. Asia accounted for 65% of the Group’s AUM while the developed markets of Australia, Canada, Europe, the United Kingdom (UK) and the United States (US) contributed 35% of its AUM. The Group’s four real estate investment trusts and five private funds have a combined AUM of over S$46.5 billion.
Gatalyn Commons in Texas, the US. strong portfolio CANADA AUSTRALIA EUROPE THE UK THE US DEVELOPED MARKETS MALAYSIA INDIA VIETNAM SOUTH KOREA JAPAN HONG KONGSAR CHINA SINGAPORE CORE ASIA RESIDENTIAL APARTMENTSERVICED OFFICE Building upa LOGISTICS MULTIFAMILY INDUSTRIAL RETAIL AUM (S$MILLION) AUM (S$MILLION) STUDENT ACCOMMODATION MIXED-USE DATA CENTRE 13,692.0 18,040.5 2,447.9 3,367.6 3,603.7 1,197.4 1,409.0 1,449.7 3,617.2 7,318.2 9,231.6 881.8 72.2
35% 65% HIGHLIGHTS of the year
of tenants and service providers APRIL 2020 working at Mapletree retail properties JULY 2020 in Singapore who had to take no-pay The Mapletree India China Fund was The second edition of The Mapletree leave during the global pandemic. fully realised and delivered an overall Challenge which was supported The second round of MCSF payouts net internal rate of return (IRR)1 of 13.6% by Mapletree, concluded with the supported more than 140 recipients. and an equity multiple of 2.0 times. Grand Final via vodcast. Six student finalist teams from the Singapore
JUNE 2020 Institute of Technology (SIT) presented MAY 2020 entrepreneurial ideas for sustainable Mapletree Industrial Trust (MIT) was innovation. The winners were presented Mapletree acquired its first logistics added to the FTSE Straits Times Index with the Mapletree Gold, Mapletree asset in India through a forward on 22 June. Silver and Mapletree Bronze awards purchase agreement. Comprising three and cash prizes of S$5,000, S$3,000 warehouses with a total gross floor area Mapletree’s Japan-focused logistics and S$2,000 respectively. More (GFA) of approximately 58,818 square development fund (MJLD) was fully than 150 students took part in the metres (sqm), the properties are located realised and delivered an overall net seven-month challenge comprising in a logistics park in Chakan, Pune. IRR1 of 23.7% and an equity multiple masterclasses, mentorships and an The location is an established micro- of 1.8 times. innovation and entrepreneurship forum market for Hi-Tech engineering and with industry professionals. automobile tenants with good access to The handover to buyers of Mapletree’s Mumbai’s ports, airports and highways first residential project in Vietnam, connecting to western India. One Verandah, commenced on 21 June. Located next to the scenic Under the Mapletree Community Saigon River in the heart of District Sharing Fund (MCSF), over S$85,000 2, Ho Chi Minh City (HCMC), the in voluntary contributions was pooled prestigious condominium which from Mapletree staff’s Solidarity comprises five high-rise residential Payment. The fund provided cash blocks was well received with over 95% grants to more than 180 employees of launched units sold.
Mapletree’s Chairman Mr Edmund Cheng presenting a token of appreciation to SIT President, Professor Tan Thiam Soon at The Mapletree Challenge Prize Presentation ceremony held on 9 March 2021 at MBC, Singapore.
AUGUST 2020 Mapletree presented four Singapore Management University (SMU) undergraduates with the Mapletree Awards, each valued at S$8,000, for Academic Year 2019-2020. In total, seven such awards have been presented to date to motivate Real Estate Track students who have achieved excellent academic results and demonstrated strong interest and aptitude. The study trips, annual lectures and forums form One Verandah, Mapletree’s first residential project in Vietnam, is located in District 2, HCMC. part of the Mapletree Real Estate
32 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Programme established through a S$3 million endowment from Mapletree to SMU in 2018.
Mapletree’s digital performance series, Mapletree Arts in the City on Air, continued to feature new performances each month. The series started as part of the Group’s Corporate Social Responsibility (CSR) efforts to provide a platform for the arts during the nationwide “circuit breaker” or partial lockdown in Singapore while paying tribute to frontline workers battling the Covid-19 pandemic. As at 31 Grade A office building 5221 Paramount Parkway is located in the Research Triangle Park in Morrisville, March 2021, Mapletree has committed North Carolina, the US. S$85,000 to Mapletree Arts in the City on Air. Mapletree acquired three Grade A In addition to Mapletree’s existing office office buildings with approximately assets in Bengaluru, Chennai and Pune, Oakwood, together with one of 47,100 sqm of net lettable area (NLA) the Group expanded its commercial China’s leading real estate developers at Perimeter Park in Morrisville, footprint to include Mumbai, with the Country Garden Commercial and North Carolina, the United States (US) acquisition of approximately 25,516 sqm Culture Tourism Group, announced at a total investment value of of land for development as office space. a strategic alliance to develop the US$190.5 million (~S$255.3 million). Oakwood Beluxs brand. Targeting Located in the Research Triangle Park MIT completed the acquisition of the aspirational travellers, the goal is to submarket which is in close proximity remaining 60% interest in 14 data open 100 Oakwood Beluxs properties to Raleigh-Durham International centres in the US. The agreed property in China’s 50 cities with the highest Airport as well as world-class research value of the 14 data centres on a 60% gross domestic product by 2030. institutions and top-ranked medical basis was US$494.0 million (~S$662.0 centres, the acquisition also includes million). With an NLA of 209,291 sqm, 2 SEPTEMBER 2020 another approximately 10,400 sqm the data centres are on freehold land of undeveloped land parcel with the and strategically located in established Mapletree North Asia Commercial Trust potential to be developed into an data centre markets across the US. In (MNACT) announced the expansion office building with approximately FY20/21, the data centres were 96.7% of its investment mandate to include 14,000 sqm of NLA. leased to established tenants including South Korea. Fortune Global 500 corporations and companies listed on the NYSE/Nasdaq.
The Group paid tribute to essential and healthcare workers battling the Covid-19 pandemic through a billboard advertisement at Tanjong Pagar Distripark, 37 Keppel Road, and wall banners at the linkway bridges between Alexandra Retail Centre and Mapletree Business City (MBC), as well as HarbourFront Centre. The advertisements featured representatives from various Singapore government Mapletree expressed gratitude with a billboard tribute to frontliners battling the Covid-19 pandemic. hospitals and Mapletree’s Facility It featured healthcare workers as well as vendors from Mapletree’s Facility Management team. Management vendors.
33 highlights of the year
Mapletree Logistics Trust (MLT) completed the forward purchase of a OCTOBER 2020 one-storey warehouse in Truganina, Mapletree launched the Mapletree Melbourne, Australia for A$18.4 million Traineeship (M-TRAIN) which is (~S$19.2 million). Sited on freehold a 12-month full-time work-study land of 25,650 sqm, the Grade A programme to employ up to facility offers 15,154 sqm of NLA. The 30 trainees in Singapore. Fully funded newly completed property had secured by Mapletree, this initiative supports 100% lease commitment prior to its fresh graduates who face challenges completion. finding employment because of the pandemic, and allows them to gain insights into the real estate industry, both professionally and academically.
Over 360 participants attended the first virtual Mapletree Real Estate The Pinnacle Gangnam, a Grade A 20-storey Forum titled “Opportunities and freehold office building located in Gangnam-gu, Challenges for the Real Estate Sector Seoul, South Korea. in the Covid-19 Era”, which was jointly organised by Mapletree and SMU. The the Gangnam business district has annual forum is part of the Mapletree direct access to an underground Real Estate Programme at SMU. subway station and enjoys excellent connectivity across the Seoul The Group entered into a unit sale and metropolitan area. purchase agreement to co-invest in Mr Wan Kwong Weng (first from right), Group The Pinnacle Gangnam with MNACT Chief Corporate Officer, Mapletree, together with for KRW452 billion (~S$535.1 million). Mr Murali Pillai, Adviser to Bukit Batok Grassroots NOVEMBER 2020 Organisations, handing out refurbished Mapletree Located in Gangnam-gu, Seoul, South laptops to the beneficiaries. Korea, the 20-storey freehold office Mapletree continued to deepen with six underground floors has a its network connectivity in Japan, GFA of approximately 44,400 sqm. expanding into seven regions through Mapletree donated 15 upcycled The premium Grade A property in its maiden entry into the Kyushu laptops to the Bukit Batok Community Club in Singapore to support children from low-income families. The laptops, refurbished with new hard disks and Microsoft Office Suite, provided more than 25 beneficiaries with a greater access to online tuition platforms and resources.
An artist's impression of the upcoming Kyushu logistics development comprising two blocks of Grade A four-storey, double ramp-way modern warehouses which will span a total GFA of 231,956 sqm.
34 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 logistics market. The acquired plot distancing guidelines to raise awareness of prime land is well-connected to of threatened birds. Jointly organised major transportation infrastructure in by Mapletree, BirdLife International Fukuoka and spans 116,431 sqm. Upon and the Nature Society (Singapore), the completion, it is set to be Fukuoka race is a continuation of the partnership prefecture’s largest logistics warehouse established in 2019. It concluded with space, comprising two blocks of multi- an online webinar graced by storey logistics with a combined GFA of Minister for National Development, 231,956 sqm and total investment over Mr Desmond Lee, who also took part S$550 million. in the race.
Oakwood announced the launch of MIT marked its first foray into The Unlimited Collection by Oakwood sustainable financing by securing a with the debut of three downtown, S$300 million sustainability-linked iconic heritage properties located facility with a tenor of up to six years. in Singapore’s key architectural The facility integrates its sustainability conservation precincts. Through performance with its cost of financing. distinctive residential spaces that celebrate individualism, the properties MLT completed the acquisitions of target independent travellers. mTower Wuhan, a Grade A 44-storey office building, eight high-quality Grade A logistics is located in one of China’s most important science facilities located in the key logistics Mapletree signed a sales and purchase and innovation clusters in the Hubei Province. hubs of China and Vietnam, as well agreement to acquire mTower Wuhan, as the remaining 50% interest in 15 a 44-storey international Grade A office logistics properties in China. These in China. The asset, which spans DECEMBER 2020 acquisitions, which will expand MLT’s 81,771 sqm, is located in Wuhan Optics regional footprint and enhance its Valley, Hubei Province. It is one of Mapletree held the first ever digital portfolio returns, are strategically China’s most important science and 36th Singapore Bird Race which saw located and cater to the modern innovation clusters. almost 250 participants competing requirements of third-party logistics in six different categories under safe firms and e-commerce tenants. Following the acquisition of three Grade A office buildings in Perimeter Park in September 2020, Mapletree acquired another eight office buildings, with a total NLA of approximately 63,300 sqm, within the same park for US$164.2 million (~S$220 million).
Mapletree acquired a 36.3-hectare site in Crestmead, Brisbane, Australia which will be developed into Mapletree Logistics Park – Crestmead, one of the biggest industrial developments within Brisbane. With excellent access to the Logan Motorway, city centre, port and airport, the logistics park will be developed over four phases to provide approximately 200,000 sqm of high grade logistics warehousing and office space. Minister for National Development, Mr Desmond Lee (second from left) participated in the race and graced the closing webinar of the 36th Singapore Bird Race.
35 highlights of the year
situated in the HarbourFront Precinct within the Greater Southern Waterfront. It will boast Singapore’s first floating deck in a residential development. The project achieved strong take-up, with 80% of total units sold as at 31 March 2021.
VivoCity, Singapore, revitalised its promenade-facing food and beverage cluster on Level 1, welcoming brands such as Afuri Ramen, Green Common, Hoshino Coffee and Shake Shack, which have been warmly received by shoppers.
FEBRUARY 2021 Mapletree further expanded its growing portfolio of data centres through the acquisition of a land parcel in Fanling, Sheung Shui Town in New Territories, Hong Kong SAR, for about Higashi Hiroshima Centre which is centrally located in the Hiroshima prefecture of the Japan’s Chugoku HK$813 million (~S$140.4 million). region, was acquired for approximately S$78.7 million. The approximately 4,000 sqm industrial site will be developed into a data centre with a maximum GFA of MLT acquired Higashi Hiroshima Mapletree completed its first US student 20,140 sqm upon completion in 2023. Centre, a modern two-storey freehold housing development project, The As Mapletree’s maiden data centre logistics facility with a GFA of Chestnut at University City. Comprising in Hong Kong SAR, the facility is 26,969 sqm for JPY6,370 million 405 units, the 30-storey development is strategically placed to serve Chinese (~S$78.7 million). Its central location adjacent to the Wharton School of the cloud players in Shenzhen and will in the Hiroshima prefecture in Japan, University of Pennsylvania. offer connectivity to major cities in with connectivity to Greater Osaka in Mainland China. the east and Kyushu Island in the west, makes it ideal for regional distribution JANUARY 2021 MLT secured its first green loan of within and outside of Hiroshima. S$200 million green revolving credit Mapletree sponsored the third edition facility, with OCBC Bank. Proceeds of the annual Mapletree-SCCCI River MLT extended its footprint in Australia from the facility will be used to finance Hongbao Hackathon. It received a with the acquisition of a purpose-built working capital requirements that are in record 45 submissions from 11 tertiary modern logistics facility in Brisbane, line with the eligibility criteria of MLT’s institutions under the year 2021’s Queensland for A$114 million green loan framework. (~S$118.7 million). Sited on freehold theme of “Forging a Brighter Future”. land, it comprises two buildings with Three teams won S$2,000 in prize Mapletree acquired an estimated 44,450 a GFA of approximately 55,009 sqm. money and S$5,000 in seed money sqm of fully completed warehouses The facility is well-positioned to benefit to set up a display at River Hongbao in India located adjacent to the three from its prime location in Acacia 2021 and sell their products via an forward purchase warehouses in Chakan, Ridge – an established industrial and e-commerce platform. Pune. This led to Mapletree owning the logistics precinct in close proximity to entire logistics park with an expanded the city with convenient access to key Mapletree launched The Reef at King’s total GFA of approximately 103,268 sqm. transportation infrastructure. Dock, a 429-unit luxury development
36 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 the previous year. On 6 April, SOTA MARCH 2021 announced the top 10 winners and top 40 finalists for the competition. The Mapletree launched Culture City. artworks creatively explored heritage, Culture Scape., an art book published global warming and the pandemic, by the NTU Centre for Contemporary through the three themes of Looking Art (NTU CCA Singapore) underscoring Out of My Window, Space Zoo and the significance of art in public spaces. Tropical Fruit. The book documents the public art commission at MBC II – through MLT completed the acquisition of five featured works by internationally modern, high specifications freehold renowned artists including Dan Graham, logistics properties spanning almost Tomás Saraceno, Yinka Shonibare 150,000 sqm of GFA in Yongin-Icheon, CBE RA and Zul Mahmod – and South Korea, for KRW280 billion (From left) Four aspiring young musicians highlights the curators’ conversations (~S$331.5 million). Situated within the Jadelynn Soh, Ang De Jin, Ryan Lim, Teressa Teo, with the artists and Mapletree’s prime logistics cluster in the southeast were awarded with the fourth Mapletree-TENG Chairman Mr Edmund Cheng in Academy Scholarship 2021, which supports youths region of the Seoul Metropolitan Area, reflective essays. who are passionate in Chinese music. the facilities are expected to be highly sought after by users from high-value The Group also supported the annual industries and the e-commerce sector. Four aspiring musicians aged 13 to 19 School of the Arts, Singapore (SOTA) received scholarships in 2021. This Primary 6 Art Competition for the third For the fourth year running, the brings the number of youths who have consecutive year, which drew more Mapletree-TENG Academy Scholarship benefitted from the scholarships, each than 1,000 submissions from 166 was awarded to youths who are valued at S$10,000 for a two-year primary schools, up from over 800 in passionate about Chinese music. tenure, to 18.
Mapletree and SMU jointly announced the newly appointed Chairman and two other members of the SMU Advisory Board for the Real Estate Programme, succeeding their predecessors whose terms had expired. Comprising 11 leaders in the fields of real estate, tax, investment, finance and law, the board provides insights into evolving industry trends and provides strategic inputs for SMU’s Real Estate Track.
The Group’s 11th private equity fund, Mapletree Europe Income Trust (MERIT), was successfully closed on 24 March, and approximately 1.5 times covered with EUR507 million (~S$812.9 million) in total equity. Fully invested at closing, it comprises seven Grade A office properties which total approximately 270,000 sqm at a total asset value of EUR1.2 billion (From left) Professor Ute Meta Bauer, Founding Director, NTU CCA Singapore, Mr Edmund Cheng, (~S$1.9 billion). This further showcases Chairman, Mapletree, Mr Peter Schoppert, Director, NUS Press, Mr Wan Kwong Weng, Group Chief Corporate Officer, Mapletree, and Ms Khim Ong, Head & Curator, Biennale and Residencies, Singapore Art Mapletree’s core capabilities and Museum showcasing Culture City. Culture Scape. at its book launch on 5 March 2021. strength as an active capital manager.
37 highlights of the year
work-from-home trends and sustainability reporting would impact the demand and valuation of commercial real estate.
MIT completed the acquisition of a data centre located at 8011 Villa Park Drive, Richmond, Virginia, the US. With an NLA of 65,150 sqm, the freehold property is fully leased on a triple net basis to a multinational company with strong credit standing.
MIT extended rental reliefs of about S$12.7 million in FY20/21 to support its tenants in Singapore, which comprised Strategically located in Pune, Maharashtra, the two single-storey Grade A warehouses which have a combined GFA of 89,229 sqm mark MLT’s maiden acquisition in India. MIT’s Covid-19 Assistance and Relief Programme and mandated rental reliefs under the Covid-19 (Temporary MLT made its first entry into the The Group held its third Mapletree Measures) Act. fast-growing India logistics market Annual Lecture titled “The Commercial with the acquisition of two properties Real Estate Eco-System” on 31 March. Mapletree acquired Uptown Station, strategically located in Pune, For the first time, it was delivered a fully refurbished commercial asset Maharashtra for INR4,550 million in a webinar format. More than 230 in Oakland, California, the US for (~S$83.9 million). The two single-storey participants attended the lecture, US$427.4 million (~S$572.8 million). Grade A warehouses with a combined supported by Mapletree and organised With a total NLA of approximately GFA of 89,229 sqm are leased to a by SMU. Keynote speaker Professor 36,900 sqm, the freehold asset is quality tenant base comprising primarily Stijn Van Nieuwerburgh from Columbia strategically located within the heart of multinational corporations. University’s Graduate School of Business the central business district and enjoys also joined the panel for an insightful excellent access to main transportation Mapletree extended its support discussion that explored how nodes in the city. for hackathons with the inaugural Mapletree x NP Hack 2021. It spurred 18 solution-ideas by Ngee Ann Polytechnic (NP) students – under the themes of Community, Business and Sustainability – which tackled the multi- faceted challenges of the Covid-19 pandemic. Over 70 NP students took part in the three-day hybrid hackathon that comprised design thinking, skills- up workshops and a solutions clinic to equip them with new, marketable and future-ready career skills.
1 After expenses, taxes and base management fee but before carried interest. 2 All properties are sited on freehold land, except for the parking deck (150 Carnegie Way) at 180 Peachtree, Atlanta, the US. As at 31 March 2021, the parking deck has a remaining land lease tenure of approximately The third Mapletree Annual Lecture was held in a webinar format on 31 March 2021 by keynote speaker 34.8 years, with an option to renew for an Professor Stijn Van Nieuwerburgh from Colombia University’s Graduate School of Business. additional 40 years.
38 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 financial review
5-YEAR FINANCIAL SUMMARY
FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 (A) INCOME STATEMENT For the financial year ended 31 March (S$ million) Revenue1 2,328.7 3,182.4 3,821.2 3,877.0 2,735.9 Recurring PATMI1 640.7 618.1 713.2 752.0 633.3 PATMI 1,413.7 1,958.6 2,161.1 1,778.5 1,849.9 PATMI attributable to Equity Holder of the Company 1,349.6 1,873.6 2,088.3 1,705.5 1,777.1
(B) BALANCE SHEET As at 31 March (S$ million) Investment properties 30,686.4 37,422.3 46,975.6 46,371.1 42,957.4 Properties under development 1,663.0 409.8 805.0 1,129.7 1,606.3 Investments in associated companies and joint ventures 1,279.0 1,509.4 1,056.3 3,528.7 4,448.5 Cash and cash equivalents 1,179.8 1,267.6 1,896.3 2,440.1 2,021.3 Others 1,451.0 1,965.9 4,255.6 2,141.8 2,566.0 Total Assets 36,259.2 42,575.0 54,988.8 55,611.4 53,599.5 Total borrowings/medium-term notes 13,095.5 16,623.4 23,410.2 21,565.8 20,183.0 Non-controlling interest and other liabilities 11,979.6 13,165.7 16,986.1 17,960.8 15,756.4 Shareholder’s funds 11,184.1 12,785.9 14,592.5 16,084.8 17,660.1 Total Equity and Liabilities 36,259.2 42,575.0 54,988.8 55,611.4 53,599.5
(C) FINANCIAL RATIOS As at 31 March ROE 12.8% 15.7% 15.3% 11.2% 10.6% ROIE 18.7% 8.7% 10.4% 21.6% 8.6% ROTA 7.1% 8.8% 8.2% 6.1% 4.6% Net Debt/Total Equity Ratio 55.4% 63.5% 78.0% 62.5% 60.5% Interest Cover 4.7x 4.6x 3.4x 3.4x 4.0x
39 financial review
KEY HIGHLIGHTS – FY20/21 Group’s divestment of seven Europe • The Group expanded its office office properties into a new private portfolio with the acquisition of • Mapletree recorded a revenue of fund, Mapletree Europe Income Trust several properties in South Korea, S$2,735.9 million in Financial Year (MERIT), which has initial assets under the Netherlands and the United 2020/2021 (FY20/21), a decrease of management (AUM) of approximately States (US), at a total transaction 29.4% year-on-year (y-o-y) due in part S$1.9 billion. Meanwhile, total value of approximately S$1.8 billion. to the deconsolidation of Mapletree shareholder’s funds increased by On the back of the acquisitions, Industrial Trust (MIT) in July 2020 9.8% to S$17,660.1 million. the Group’s exposure to the asset and the syndication of private fund, class increased from 22% of AUM in Mapletree US & EU Logistics Private • The Group ended the financial FY19/20 to 24% in FY20/21. Trust (MUSEL). Excluding the impact year with a S$1,382.8 million from the deconsolidation as well reduction in total borrowings from • In terms of development projects, as fund syndications, the Group’s a year ago, largely attributable to the Group added 12 new sites to its revenue was approximately 14% the deconsolidation of MIT and logistics portfolio in China during lower than the previous financial syndication of European office the financial year, taking the Group’s year, primarily due to Covid-19 portfolio. Net gearing ratio as at logistics footprint in China to 8 million impact of rental rebates provided 31 March 2021 was two percentage square metres (sqm) of gross floor to tenants and lower occupancies. points lower at 60.5% (31 March area as at 31 March 2021, a 12% The Covid-19 impact was partly 2020: 62.5%). increase year-on-year. During the cushioned by Group-wide cost year, the Group also acquired a plot containment measures. • With the Covid-19 vaccination rollout of land in Fukuoka prefecture, Japan, raising prospects of a greater shift for the development of a four-storey • In FY20/21, the Group recorded a towards normalcy, the operating Grade A logistics property. Logistics PATMI of S$1,849.9 million. This outlook for FY21/22 appears slightly as an asset class remains the largest represented a 4.0% increase from more optimistic. To weather any contributor to the Group’s AUM, the S$1,778.5 million achieved in the unforeseen downturn or capitalise on comprising 31% or S$20.9 billion of previous financial year. The uplift was opportunities which may arise, the total AUM. primarily driven by a S$830.0 million Group continues to maintain ample accounting gain arising from the financial flexibility. As at 31 March • Aside from logistics developments, deconsolidation of MIT, which more 2021, the Group has access to cash the Group also acquired several than offset the operational impact and undrawn facilities amounting to land plots in FY20/21 for other non- from the Covid-19 outbreak, lower S$12.5 billion. logistics developments. In January contributions from assets syndicated 2021, the Group acquired two land to private funds and weaker property • In FY20/21, the Group reported ROE sites in Wuxi and Guangzhou, China, revaluation gains compared to a of 10.6% which is marginally lower for residential developments. In year ago. than the 11.2% recorded in the prior February 2021, the Group won a financial year. ROIE, which measures land tender in Fanling, Sheung Shui • Recurring PATMI was at S$633.3 cash-based returns against original Town in New Territories, Hong Kong million, a 15.8% decline y-o-y largely invested cost, fell to 8.6% (FY20/21) SAR to develop its maiden data due to operational headwinds as a from 21.6% (FY19/20), partly due centre project in this market. When result of Covid-19. The pandemic to the softer set of recurring results completed in 2023, the data centre mainly affected operational and relatively smaller gains on will be capable of delivering up to performance at the Group’s retail divestments. 50 megavolt-amperes of building and lodging assets, as well as the power. Singapore Cruise Centre, where daily The following were the Group’s passenger throughput has fallen strategic acquisitions and Strategic divestments drastically amid travel restrictions. developments during the year: • In September 2020, Mapletree completed the divestment of • As at 31 March 2021, the Group’s • Despite the challenging environment, Mapletree Business City @ Binh total assets stood at S$53.6 billion, the Group continued to proactively Duong, an industrial park in Vietnam, a 3.6% decrease from the S$55.6 explore investment opportunities for approximately S$140.8 million. billion as at end FY19/20. The across asset classes in international decline was largely driven by the markets. This resulted in an increase deconsolidation of MIT and the of total AUM by 9.7% in FY20/21.
40 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Capital management through third party acquisitions in for S$535.1 million. The property, • As a capital manager in real estate both South Korea and India. which is 50% owned by MNACT, investment trusts (REITs) and private is the REIT’s first investment in funds, the Group executed a number – In September 2020, MIT acquired South Korea. of strategic transactions: the remaining 60.0% stake in Mapletree Redwood Data Centre – In March 2021, the Group – Mapletree Logistics Trust (MLT) Trust from Mapletree. The agreed launched a new private fund, announced the acquisition of a property value of the 14 US data MERIT. The fund, which is the S$1.1 billion portfolio in October centres on the 60.0% basis was 11th syndicated by the Group in 2020. The portfolio comprises approximately S$662.0 million. its operating history, has an AUM wholly owned stakes in nine The portfolio was jointly acquired of approximately S$1.9 billion, properties in China, Malaysia and by both parties in October 2017. and a target internal rate of Vietnam, as well as the remaining Separately, MIT also acquired a return2 of 12%. The third party 50% interest in 15 China facilities data centre in Virginia, the US fund raising was approximately that MLT had already partially from a third party for approximately 1.5 times covered. owned. With a net lettable area S$278.5 million in March 2021. of 1.2 million sqm, the acquisition • During FY20/21, MLT and MIT raised enhances MLT’s competitive – A joint acquisition was made by gross proceeds of S$1.1 billion from positioning in Asia Pacific. Aside Mapletree North Asia Commercial the capital market through equity from properties developed by Trust (MNACT) alongside the fund raising. The fund raising largely the Group, MLT also extended its Group for an office building in financed various acquisitions over geographical footprint in FY20/21 Seoul’s Gangnam business district the course of the year.
PATMI
The breakdown of the Group’s PATMI is shown below:
(S$ million)
2,250 2,161.2 • The Group achieved a Recurring 1,958.6 PATMI of S$633.3 million, a decrease 2,000 1,849.9 of 15.8% y-o-y driven by the adverse 1,778.5 market conditions resulting from 1,750 174.6 the Covid-19 pandemic which particularly impacted the Group’s 1,149.4 retail and lodging operations. 1,500 1,413.7 1,136.7 823.7 • Overall, the Group’s PATMI increased 1,250 1,042.0 by 4.0% to S$1,849.9 million in 662.1 FY20/21, due to the accounting gain 1,000 resulting from the deconsolidation 298.5 202.8 of MIT. Despite the challenging 750 environment, the Group recorded a 110.9 203.8 revaluation gain of S$174.6 million3. 500 713.3 752.0 640.7 618.1 633.3 250
0 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21
n Recurring PATMI n Investment & Other Gains n Asset Revaluation Gains
41 financial review
REVENUE AND EBIT + SOA HIGHLIGHTS BY STRATEGIC BUSINESS UNITS (%)
10 8 4 • In FY20/21, the Group’s revenue 3 2 3 declined 29.4% y-o-y to S$2,735.9 1 3 million. This was partly due to the 1 deconsolidation of MUSEL and MIT. FY19/20 FY20/21 12 • The Group’s EBIT + SOA decreased Revenue Revenue by 19.3% from a year ago to 17 S$2,735.9m S$3,877.0m S$1,862.9 million. REITs and their 44 59 2 respective management companies continued to account for the lion’s 4 10 share of Mapletree’s EBIT + SOA. Apart from REITs, Europe and USA 17 accounted for 16% of the Group’s EBIT + SOA, a decrease from 17% in the last financial year, following the Group’s reduced stake in MUSEL. South East Asia and Group Retail’s business unit remained the third -6 11 -10 8 3 largest contributor at 8%. 3 3 4 5 1 2 16 FY19/20 FY20/21 EBIT + SOA EBIT + SOA S$2,308.1m 17 S$1,862.9m 2 60 73 2
4 3
n South East Asia and Group Retail n Europe and USA n Logistics Development n Australia & North Asia n Data Centre n Group Lodging (includes Oakwood) n China Commercial n REITs & REITs management companies n India Commercial n Others
42 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 TOTAL REAL ESTATE ASSET BASE (%)
The Group continued to achieve growth 30 30 in its real estate AUM, which increased 9.7% y-o-y to S$66.3 billion. The managed AUM remained at 70% with the launch of MERIT, and the acquisition FY19/20 FY20/21 of assets by the REITs during the year. S$60.5b S$66.3b 70 70
n Owned Assets n Third-party AUM
TOTAL OWNED AND MANAGED REAL ESTATE ASSETS BY ASSET CLASS (%)
1 1 2 10 9 Logistics remains as the Group’s largest asset class at 31% of overall AUM. The 30 31 acquisition of more residential land sites 15 14 in China has lifted the Group’s residential portfolio to comprise 2% of AUM, FY19/20 FY20/21 an increase of 1% from the previous S$60.5b S$66.3b financial year.
5 5 22 24 8 7 8 8
n Logistics n Retail n Data Centre n Lodging n Industrial n Residential n Business Park n Mixed-use n Office
43 financial review
TOTAL OWNED AND MANAGED REAL ESTATE ASSETS BY COUNTRY (%)
To date, the Group owns and manages 21 21 30 27 real estate assets across 13 markets. China accounted for 14% of Mapletree’s total owned and managed FY19/20 FY20/21 real estate assets. This was an increase of 3% from the previous financial S$60.5b 11 S$66.3b 11 year, mainly attributable to the new acquisitions of logistics assets and residential land sites in China. While 7 14 7 11 Singapore remains predominant, with the largest proportion of assets 5 5 3 12 4 11 at 27%, the decrease of 3% from the previous financial year was due to lower valuation for VivoCity. n Singapore n Japan n China n Rest of Asia n Hong Kong SAR n Europe n Australia n United States
44 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 GLOSSARY EBIT + SOA Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated companies and joint ventures (SOA), excluding residential profits, incentive fee from private funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange and derivatives gains or losses. Interest Cover EBIT + SOA over net finance costs. Net Debt/ Borrowings (excludes loans from non-controlling interests) less cash and cash equivalents over the Total Equity Ratio Total Equity. PATMI PATMI denotes net profit after tax and non-controlling interests attributable to Perpetual Securities Holders and Equity Holder of the Company. ROE ROE denotes return on equity and is computed based on PATMI attributable to Equity Holder of the Company over shareholder’s funds. ROIE ROIE is computed based on adjusted* PATMI over the Group’s equity held at original invested cost (OIC).
* Adjusted to exclude non-cash and non-operating items such as unrealised revaluation gains or losses, mark-to-market fair value adjustments, gain and losses on foreign exchange, negative goodwill and dilution gain and loss and include OIC gains from any gains or losses on disposal and corporate restructuring surplus or deficit. ROTA Return on total assets (ROTA) is computed based on Profit for the year less finance cost/(income), net of tax over the average total assets.
1 Numbers are restated as incentive fee and residential profits are excluded from “Recurring PATMI”. They are not deemed to be the core business activities for the Group. 2 After expenses, taxes and base management fee but before carried interest. 3 Net of tax and non-controlling interests but including share of associated companies’ and joint ventures’ revaluation gains or losses.
45 CORPORATE LIQUIDITY AND FINANCIAL RESOURCES
FINANCIAL MARKET REVIEW Eurozone and Japan) also kept interest • Mapletree Logistics Trust (MLT) via rates on hold, while Australia has cut its subsidiary, issued two tranches 2020 was a difficult year as the its rates to an all-time low of 0.1% in of 0.90% nine-year fixed rate notes Covid-19 pandemic dominated November 2020. totalling JPY9,500 million the world and plunged the global (~S$117.4 million) in March 2021. economy into a severe contraction. FINANCIAL RESOURCES AND The proceeds were used to Many governments instituted large LIQUIDITY refinance existing borrowings and fiscal spending to soften the loss of for general corporate purposes. production, employment and income. Against the backdrop of uncertainties On the global stage, the geopolitical amid the Covid-19 situation, prudent The Group also raised S$1.38 billion tension between China and the United capital management and cash flow in loans through sustainable financing. States (US) also intensified, adding to planning are imperative. Mapletree has The loans were for financing green the uncertainty. built a strong base of funding resources buildings or designed to link with key to not only meet its commitments but environmental, social and governance The Singapore economy contracted also enable it to capitalise on investment initiatives that the Group focuses on. by 5.4% in 2020, mainly due to a opportunities. On an ongoing basis, the It demonstrates the Group’s sharp decline in the construction Group monitors and manages its debt commitment to incorporating sector. In April 2021, the Monetary maturity profile, cost of funds, foreign sustainability throughout its business Authority of Singapore maintained exchange and interest rate exposures, operations. the rate of the appreciation path of as well as overall liquidity position. To the Singapore dollar at 0%, against ensure sufficient financial flexibility, DEBT AND GEARING a backdrop of weak inflation and scenario analyses including stress tests Covid-19 uncertainties. The US are performed regularly to assess the As at 31 March 2021, the Group’s net economy contracted by 3.5% in potential impact of market conditions debt was S$18,140 million compared to 2020, as the pandemic brought the on its financial position. S$19,087 million as at 31 March 2020. economy to a freeze. On the other Net Debt/Total Equity Ratio improved hand, China’s economy grew 2.3% As at 31 March 2021, total cash to 60.5% from 62.5% a year ago and in 2020, making it the only major reserves and undrawn banking facilities Total Debt/Total Assets Ratio improved economy to have expanded, driven by amounted to S$12,549 million. to 37.8% from 38.9% during the its strict virus containment measures same period. and policy stimulus. Against last To further diversify its funding sources, year’s low base, the global economy the Group tapped on the debt capital As at 31 As at 31 is projected to recover in 2021. The market during the year: March 2020 March 2021 strength of the recovery, however, will (S$ million) (S$ million) depend on the successful rollout of the • Mapletree Treasury Services Limited Total Debt¹ 21,527 20,161 raised S$200 million 1.20% three- Covid-19 vaccinations, as well as the Cash 2,440 2,021 effectiveness of policy support to drive year fixed rate notes in December Net Debt 19,087 18,140 economic recovery. 2020. The proceeds were used for general corporate purposes; and Major central banks continue to respond with massive monetary stimulus. The US Federal Reserve has Financial Capacity S$ million committed to keeping interest rates Cash 2,021 near zero until there is substantial Unutilised Facilities from Financial Institutions 10,528 progress in economic activity and Total 12,549 employment. Most other central banks (including the United Kingdom (UK), Issue Capacity under Euro/Medium Term Note Programmes 11,819
46 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 The decrease in debt was primarily due NET DEBT/TOTAL EQUITY DEBT PROFILE to the deconsolidation of Mapletree (CURRENCY BREAKDOWN) (%) Industrial Trust (MIT) in July 2020 (S$ million) and the successful syndication of a 2 2 2 2 new private trust, Mapletree Europe 35,000 7 Income Trust (MERIT) in March 2021, 30,534 29,967 29 raising equity from a diversified group 30,000 of investors. The syndication is in line 9 with the Group’s business model, 25,000 which includes being an active capital 19,087 20,000 18,140 FY19/20 manager in both the public and private 62.5% markets. 15,000 12 60.5% During the year, the following assets 10,000 were acquired by Mapletree-managed 22 listed real estate investment trusts 5,000 13 (REITs): 0 FY19/20 FY20/21 • Remaining 60% interest in 3 3 2 14 data centres in the US by MIT n Net Debt n Total Equity² 3 in September 2020; and ● Net Debt/Total Equity Ratio (%) 7 28 • 22 logistics assets in China (comprising the remaining 50% TOTAL DEBT/TOTAL ASSETS interest in 15 properties and a 100% 13 FY20/21 interest in seven properties) and a (S$ million) 100% interest in a logistics asset in Vietnam by MLT in December 2020. 60,000 55,305 53,363 14 13 The Group used the funds derived 50,000 through these transactions to repay 14 its debt and finance its expansion. 40,000 Mapletree continues to deepen its n n presence in various asset classes and 30,000 SGD GBP markets, such as the logistics market n USD n EUR 21,527 38.9% n n in India as well as offices in South 20,161 HKD AUD 20,000 n JPY n MYR Korea, the Netherlands and the US. n RMB n Others In addition, the Group made further 37.8% 10,000 progress on the development front with various new logistics projects in China and Japan, residential projects 0 FY19/20 FY20/21 in China and Singapore, commercial projects in India and its first data centre n Total Debt¹ n Total Assets development in Hong Kong SAR. ● Total Debt/Total Assets Ratio (%)
47 CORPORATE LIQUIDITY AND FINANCIAL RESOURCES
As at 31 March 2021, about 99.4% of The Group manages its interest cost debt with the balance from floating the Group’s debt was derived from by maintaining a prudent mix of fixed rate borrowings. Factors used in committed banking facilities and and floating rate borrowings as part determining the interest rate medium- to long-term bond issuance. of its liability management strategy. fixed-float profile included the interest The balance 0.6% was funded by The Group uses derivative financial rate outlook, the investments’ planned short-term banking facilities to facilitate instruments to hedge its interest rate holding period and the expected repayment flexibility arising from cash risks. Fixed rate borrowings made cash flows generated from business flows from operations and/or other up 66% of the Group’s total gross operations. activities.
The Group makes a conscious effort FIXED VS FLOAT (%) to diversify its funding sources and spread its debt maturity profile to reduce refinancing risk and to align with its cash flow plans. The average 33 34 maturity of its existing gross debt portfolio was 3.5 years as at 31 March 2021 compared to 3.6 years a year ago. The Group has sufficient resources to FY19/20 FY20/21 support its refinancing needs for the next financial year. 67 66
Mapletree continues to maintain and build active relationships with a wide network of banks and life insurance companies worldwide. n Fixed n Float The diversification of financial institutions has enabled the Group to tap on their different strengths and competencies to support Mapletree’s business strategy and growth globally.
MATURITY PROFILE AS AT 31 MARCH 2021
(S$ million) 14,000
12,000
10,000 Undrawn 8,000 Banking Facilities 6,000 S$10,528m 21% 20% 4,000 17% 15% 12% Cash 8% 7% 2,000 S$2,021m 0 FY21/22 FY22/23 FY23/24 FY24/25 FY25/26 FY26/27 FY27/28 & beyond
48 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 In FY20/21, the Group’s interest cover ASSET-LIABILITY MANAGEMENT ASSETS LIABILITIES5 ratio and cashflow cover ratio (including & EQUITY finance costs capitalised) both improved Where feasible, the Group adopts a (%) (%) to 4.0 times from 3.4 times and 3.8 times natural hedge policy to mitigate risks from foreign exchange exposure. in FY19/20 respectively. 1.5 1.5 1.0 0.9 3.1 2.3 As at 31 March 2021, the Group has 1.7 3.1 drawn foreign currency loans to fund 2.9 3.3 0.5 INTEREST COVER RATIO investments that are denominated in 5.1 3.7 the same currencies. The Group also (S$ million) entered into foreign exchange forward 5.9 contracts and cross-currency swaps 13.8 2,500 2,308.1 (in various currencies) to hedge the currency exposure of certain overseas 14.3 2,000 1,862.9 investments. The breakdown of the Group’s debt by currency is as shown 18.5 in the charts under the Debt and 1,500 Gearing section. 16.4
1,000 The Singapore-listed REITs have their 676.0 Boards and Board Committees. The 467.4 respective management companies 500 of the REITs, guided by their Board 4.0 and Board Committees, manage their 3.4 0 capital and treasury positions, including FY19/20 FY20/21 asset-liability management, taking into account, among other things, 52.8 47.7 n EBIT + SOA³ n Net Interest Expense their strategies and returns to the ● Interest Cover Ratio (times) unitholders.
Outside of the REITs, the Group seeks CASHFLOW COVER RATIO to minimise foreign exchange exposure by closely matching its assets and (S$ million) liabilities by currency. On the right is an analysis of the asset-liability n SGD n EUR 3,000 breakdown by currency, excluding the n USD n INR 2,543.6 consolidation of the REITs as at n RMB n JPY 2,500 31 March 2021. n GBP n MYR n VND n Others
2,000 1,591.9 1 Loans from non-controlling interests of 1,500 subsidiaries have been excluded from the analysis. 2 Comprising shareholder’s funds, perpetual 1,000 672.5 securities and non-controlling interests. 3 Earnings before interest and tax (EBIT) plus 500 395.4 share of operating profit or loss of associated companies and joint ventures (SOA), excluding residential profits, incentive fee from private 3.8 4.0 0 funds’ divestment, revaluation gains or losses, FY20/21 divestment gains or losses, foreign exchange FY19/20 and derivatives gains or losses. 4 Excluded changes in properties held for sale. n 4 n Operating Cashflow Net Interest Paid 5 Adjusted for foreign exchange forward ● Cashflow Cover Ratio (times) contracts and cross currency interest rate swaps.
49 TARGETS KEY PERFORMANCE INDICATORS REMARKS (BY FY23/24)
Cash on cash returns for Average ROIE1 10% to 15% shareholder Returns Commonly used returns Average ROE2 10% to 15% measurement
Average Recurring Recurring earnings of the S$900 million to PATMI3 business S$1 billion
Earnings/Cash Flow Cash flow recycled for Recycled Proceeds4,5 new investments/ >S$20 billion re-investments
Fees from capital Fee Income4 >S$2.5 billion management business
Efficiency of capital Capital Management AUM Ratio employed >3x
Simple measurement AUM S$80 billion to of scale S$90 billion
1 ROIE is computed based on adjusted* PATMI over the Group’s equity held at original invested cost (OIC). 2 ROE denotes return on equity and is computed based on PATMI attributable to Equity Holder of the Company over shareholder’s funds. 3 PATMI denotes net profit after tax and non-controlling interests attributable to Perpetual Securities Holders and Equity Holder of the Company. 4 KPIs measured on a five-year cumulative basis. 5 Measured on Mapletree Investments’ balance sheet perspective (excluding REITs and private funds).
* Adjusted to exclude non-cash and non-operating items such as unrealised revaluation gains or losses, mark-to-market fair value adjustments, gains and losses on foreign exchange, negative goodwill and dilution gains and loss and include OIC gains from any gains or losses on disposal and corporate restructuring surplus or deficit.
Financial Year 2020/2021 was the second year of Mapletree’s third Five-Year Plan. By focusing on proactive, disciplined asset and capital management, the Group THIRD FIVE-YEAR continued to execute its business plans successfully, ensuring a sustainable stream PLAN of income and strong profitability despite volatile market conditions. The Sorting Office in Dublin, Ireland.
Staying ahead of changing times OPERATIONS REVIEW SOUTH EAST ASIA AND GROUP RETAIL
SINGAPORE COMMERCIAL specialty supermarket commenced operations in October 2020, providing a The South East Asia and Group Despite the challenges posed by fresh offering for the precinct. Covid-19, Mapletree achieved several Retail business unit acquires, key milestones for its assets in the Robust tenant assistance programmes develops and manages HarbourFront Precinct in FY20/21. were rolled out to mitigate the business seven asset classes (office, impact due to Covid-19 measures, St James Power Station obtained retail, residential, serviced with additional rebates beyond the its Temporary Occupation Permit in mandatory rebates stipulated by the apartments, hotel, industrial February 2021 and was handed over Singapore government granted to the and warehouses) in the region to Dyson to begin works on its global badly affected tenants. Advertising headquarters. The restored monument to establish a platform for and promotional campaigns were also will house a heritage gallery in one of initiated to drive tenant sales. sustainable returns. its distinctive chimneys to showcase its contribution to Singapore as a Cost mitigating measures were power station, as well as a heritage The business unit generates implemented to mitigate the impact trail around the monument featuring of Covid-19 and an integrated income for the Group maritime artefacts. command centre was implemented through its portfolio of at HarbourFront Precinct in October The Reef at King’s Dock, a residential 2020 to enhance security deployments operating assets, as well as luxury waterfront development, was through the use of technology to drive through various investment successfully launched in January 2021, innovation and improve productivity. and 80% of units were sold as at and capital management 31 March 2021. This is a testament to VIETNAM activities, including a real the project’s appeal, with its waterfront estate mezzanine fund and location and a distinctive design that Operating performance in Ho Chi includes a 180-metre floating deck, Minh City (HCMC) and Hanoi exhibited development profits. a first for a residential project in resilience with stable returns through Singapore. the Covid-19 pandemic. However, the international travel restrictions As at 31 March 2021, the As part of the effort to refresh the tenant impacted hospitality asset occupancies combined real estate portfolio mix at HarbourFront Centre, a popular throughout the fiscal year. totalled S$3.6 billion across Singapore, Vietnam and Malaysia. In Financial Year 2020/2021 (FY20/21), the business unit contributed S$147.7 million to the Group’s EBIT + SOA¹. Fee income contributions were S$1.6 million.
An artist’s impression of The Reef at King’s Dock, which will feature Singapore’s first floating deck in a residential development.
52 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 To mitigate the impact of Covid-19, a robust cost containment and operational efficiency strategy was implemented, including the optimisation of utilities and recalibration of service contracts.
One Verandah, an award-winning residential development, started the handover to buyers on 21 June 2020. Over 95% of units launched have been sold.
Mapletree Business City @ Binh Duong was successfully divested in September 2020, monetising a multi-year investment. MALAYSIA Mapletree provided mezzanine loan financing for residential projects in One Verandah is an award-winning residential property located in District 2 in HCMC, Vietnam. Kuala Lumpur and Selangor. 28 BLVD, Lexa Residence and Fera Residence Grade A office rents remained unchanged Though retail sales rose by 2.6% in were fully sold and have obtained in Q1 2021 from the previous quarter, 2020, shopping mall vacancies in vacant possession. reflecting a y-o-y decrease of 9.6%, while HCMC and Hanoi remain elevated MARKET REVIEW AND OUTLOOK the Grade B market continued to decline at 9.2% and 14.3% respectively. by 2% over the quarter to register a y-o-y SINGAPORE decrease of 10%. An uneven recovery Tourist arrivals plunged by 78% in 2020 The Ministry of Trade and Industry (MTI) is expected, supported by the gradual following restrictions on international estimates that the Singapore economy economic rebound and a tight supply air travel. In HCMC and Hanoi, five-star grew by 0.2% year-on-year (y-o-y) in the pipeline, with the Grade A market hotel occupancies fell to 25.6% and first quarter of 2021, compared with expected to be the main beneficiary of 28.9% respectively. the 2.4% y-o-y contraction recorded the flight to quality. in the previous quarter. For 2021, MTI MALAYSIA has forecasted gross domestic product VIETNAM Malaysia’s GDP contracted by 3.4% (GDP) growth of 4% to 6%, spurred Despite Covid-19, Vietnam’s GDP grew in 2020 because of the Covid-19 by global fiscal stimulus and vaccine by 4.5% y-o-y in Q1 2021 while inflation pandemic. To stimulate the residential rollouts, while being weighed down fell to 0.3% q-o-q. Foreign direct market, the government reintroduced by geopolitical uncertainty involving investment reached US$10 billion, the Home Ownership Campaign in major economies as well as possible representing an 18.4% increase y-o-y. June 2020, which included a full stamp financial system stresses from the duty exemption for first-time home protracted recovery. HCMC Grade A office occupancies purchases worth up to MYR500,000. contracted by three percentage With the safe reopening of Singapore’s points to 85.8% due to the addition of workplaces and the rollout of 29,940 square metres (sqm) of office vaccinations, retail sales have improved, space while businesses adjusted to posting a y-o-y change of 6.2% in the pandemic. However, the stock of 1 Earnings before interest and tax (EBIT) plus March 2021. Rental declines for prime international-grade office buildings share of operating profit or loss of associated retail spaces moderated from -3.6% remains limited, which should support companies and joint ventures (SOA), excluding residential profits, incentive fee from private quarter-on-quarter (q-o-q) in Q4 2020 rents and occupancies as tenants funds’ divestment, revaluation gains or losses, to -1.2% q-o-q in Q1 2021. However, readjust their office space requirements divestment gains or losses, foreign exchange with the recent tightening of restrictions in the post-pandemic environment. and derivatives gains or losses. resulting from the increased community References: cases in Singapore, recovery for retail In Hanoi, Grade A office vacancy i. BNM Quarterly Bulletin ii. CBRE Reports is likely to be delayed. Overall recovery increased from 7.1% to 22.4%, with iii. CBRE Vietnam, Vietnam Market Q1 2021 Report is highly dependent on global vaccine 93,314 sqm of new office space added iv. Knight Frank Report rollout, reopening of borders and in 2020. No new office supply is v. Ministry of Planning and Investment, General Statistics Office of Vietnam whether the latest wave of infections expected to be added in 2021, which vi. Ministry of Trade and Industry, Singapore can be controlled. will support potential recovery. vii. URA Realis
53 OPERATIONS REVIEW logistics development
CHINA of a Grade A, four-storey ramp-up warehouse facility. The project will yield Mapletree’s Logistics As at 31 March 2021, Mapletree 132,000 sqm of GFA upon completion 2 operates 58 logistics properties across by end-2022. Development business unit 39 cities in China, with a total net develops and manages the lettable area (NLA) of over 4.2 million In October 2020, it was announced Group’s logistics development square metres (sqm). In FY20/21, that MLT would be acquiring Mapletree 16 logistics parks were completed, Logistics Hub – Tanjung Pelepas for a projects. It oversees a robust adding another 1.2 million sqm of total consideration of MYR402.5 million portfolio of 83 logistics NLA. A further 48 projects are under (~S$131.4 million). MLT’s acquisition development, including 12 new is expected to be completed by facilities in China, Malaysia, sites acquired in FY20/21. These will mid-FY21/22. Vietnam, Australia and India, contribute a total of 3.5 million sqm of NLA upon completion. valued at S$3.1 billion as at VIETNAM 31 March 2021. In Financial In Q3 FY20/21, Mapletree Logistics Mapletree’s logistics portfolio in Trust (MLT) acquired stakes in 22 Vietnam comprises nine projects Year 2020/2021 (FY20/21), logistics properties in China from the totalling more than 550,000 sqm of the business unit contributed Group for a total of over RMB4.3 billion GFA. Of these, two are completed and S$46.3 million to the Group’s (~S$0.9 billion). seven are under development. EBIT + SOA1. MALAYSIA In Northern Vietnam, the final two phases (Phases 4 and 5) of Mapletree Mapletree has two industrial sites in Logistics Park Bac Ninh are slated for Shah Alam, Selangor, Malaysia that will completion in June 2021. With a total be developed into Grade A warehouse GFA of 137,000 sqm, both Grade A facilities yielding a combined gross logistics facilities are attracting healthy floor area (GFA) of over 470,000 sqm. interest from established 3PLs and have Shah Alam is a prime logistics area achieved 75% pre-committed occupancy. serving Greater Kuala Lumpur and is highly sought after by third-party Construction of Hung Yen Logistics logistics operators (3PLs) as well as Park I, II and III is underway. Upon end-users for domestic distribution completion by July 2022, the Grade A and last-mile delivery. logistics facility will provide 177,000 sqm of GFA at a highly accessible location Construction has commenced at close to Hanoi with highway connections one of the sites for the development to Hai Phong seaport.
An artist’s impression of Mapletree Logistics Park – Crestmead, which is a 200,000-sqm modern logistics warehouse located in Brisbane, Australia. Phase 1 of the facility is scheduled for completion by March 2022.
54 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 To meet further demand for quality Growth in domestic consumption, warehousing space in Bac Ninh Province, e-commerce and manufacturing will Mapletree is in the process of acquiring support market demand for good a site in Thuan Thanh Industrial Park III. quality warehouses, though significant The proposed logistics park will provide new supply is likely to moderate rental a total GFA of about 247,000 sqm. reversion. In addition, the desire for convenience and rising standards of food In Southern Vietnam, the last two safety will spur demand for cold storage. phases (Phases 4 and 6) of Mapletree Logistics Park Binh Duong commenced Mapletree (Yinchuan) Logistics Park, which has AUSTRALIA construction in March 2021 and will an NLA of 74,823 sqm, is one of the logistics Queensland’s strong pre-pandemic yield over 123,000 sqm of GFA upon properties completed in China in FY20/21. economy allowed the government completion in May 2022. Meanwhile, to maintain the necessary support the completed facilities at Phases 3 and to ensure economic recovery. The 5 are fully leased. Binh Duong’s location Queensland economy is forecasted to to an increase in premium warehouse at the intersection of major highways return to marginal growth in 2020/2021, stock of approximately 66 million sqm, with access to both seaports and Ho Chi before strengthening substantially to there was still healthy demand for Minh City continues to attract strong 3.5% growth in 2021/2022. interest from end-users and 3PLs. Grade A warehouses. The logistics warehousing market in Domestic consumption continues to In December 2020, Mapletree Logistics Brisbane is poised to benefit from drive the market for logistics space Park Bac Ninh Phase 3 was acquired by government investment in major especially as China pursues the MLT for US$22 million (~S$30 million). infrastructure projects, valued at “dual-circulation” strategy under its A$50.6 billion over the next five years, 14th Five-Year Plan. With the International AUSTRALIA as well as increasing e-commerce Monetary Fund expecting China’s penetration due to Covid-19. In the In November 2020, Mapletree economy to grow by 8.1% in 2021, near term, demand for logistics completed the acquisition of a e-commerce, 3PLs and cold-chain warehousing in Brisbane is also likely 36.3-hectare site in Crestmead, logistics are likely to support demand to come from defensive occupiers such Brisbane, Queensland, which will be for warehouses. as pharmaceuticals, e-commerce, food developed into a 200,000-sqm modern retailing and manufacturing. logistics warehousing facility with MALAYSIA excellent access to Brisbane city, port The Malaysian economy contracted by INDIA and airport. Construction has begun 5.6% in 2020 (2019: +4.3%) due to the India’s logistics sector remains a on Phase 1, comprising a 60,000-sqm impact of Covid-19, marking its weakest resilient asset class. The pandemic has two-block warehouse facility to be performance since the Asian Financial accelerated consumers’ shift to online completed by March 2022. Crisis. The World Bank projects gross shopping, leading to an increased domestic product (GDP) to expand by demand for warehouse space from INDIA 6.7% in 2021, on growth in exports, e-commerce, retail and 3PL players. private consumption and investment. In May 2020, Mapletree acquired its In the short term, manufacturing, a key maiden logistics asset in India through sector in India, is likely to see uneven Malaysia’s logistics property market is a forward purchase agreement. recovery. This may have a knock-on forecasted to register healthy growth Comprising three warehouses with a impact on warehouse demand. total GFA of about 58,818 sqm, the in 2021, powered by e-commerce and private consumption growth as well as a properties are located within a logistics In the long run, the logistics sector is shortage of Grade A warehouse space. park in Chakan, Pune. In February 2021, still expected to continue benefitting the Group acquired an additional from India’s burgeoning population 44,450 sqm of fully completed VIETNAM shifting to online shopping and the warehouses adjacent to the forward Vietnam remains one of Southeast central government’s initiatives to purchase warehouses. This resulted in Asia’s fastest-growing economies, develop India as a manufacturing hub. Mapletree owning the entire logistics registering 1.6% real GDP growth park with an expanded total GFA of in 2020. The engines of growth are approximately 103,268 sqm. robust levels of public investment, domestic consumption, exports and 1 Earnings before interest and tax (EBIT) plus MARKET REVIEW AND OUTLOOK foreign direct investment. Amid severe share of operating profit or loss of associated disruption of the global supply chain companies and joint ventures (SOA), excluding revaluation gains or losses, divestment gains CHINA during the pandemic, Vietnam’s exports or losses, foreign exchange and derivatives The logistics sector in mainland China expanded by 5.3% year-on-year to gains or losses. remained resilient in 2020 due to the US$254 billion, resulting in a record 2 Of the 58 properties, 29 are held by MLT. growing e-commerce trend. Despite a trade surplus of over US$20 billion, up Reference: 14.8% rise in overall vacancy levels due from US$11 billion the previous year. i. Queensland Treasury
55 OPERATIONS REVIEW china
RESILIENT GROWTH IN CHINA Leasing commenced for mTower Beijing in July 2020 after asset enhancement Mapletree’s China business As at 31 March 2021, Nanhai Business initiative works were conducted in City Phase 4 had fully sold all 2,743 unit seeks to capitalise on tenanted areas. The building features residential units and approximately 51,235 square metres (sqm) of Grade A real estate opportunities by 44% of the strata retail units, while office space in the Lize Financial developing, investing and the Education Hub had achieved a Business District. Several high-profile 94.8% occupancy rate. managing real estate assets in tenants have been secured, including telecommunications, Hi-Tech firms and China. In addition, the business Mapletree Ningbo Mixed-Use professional service companies. unit oversees a private real Development Phase 2 (mall) and Phase 3 (medical centre) successfully estate fund, Mapletree China In November 2020, Mapletree signed obtained their occupation permit in a sales and purchase agreement to Opportunity Fund II (MCOF II). October 2020. As at 31 March 2021, acquire mTower Wuhan, a Grade A 100% of the residential units and office building with a gross floor area carparks, as well as approximately 67% As at 31 March 2021, the (GFA) of 81,771 sqm located in Wuhan of the strata retail units had been sold. Optics Valley, Hubei Province. business unit accounted for S$3 billion of the Group’s total assets under management. In Financial Year 2020/2021 (FY20/21), the business unit contributed S$12 million in fee income to the Group.
mTower Wuhan, a Grade A office building with a GFA of 81,771 sqm, is located in Wuhan Optics Valley, Hubei Province, China.
56 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 The pre-certified LEED Gold property had an occupancy rate of over 85% as at 31 March 2021, attracting tenants from the technology, financial and biomedical industries. mPlaza Guangzhou, an office building with a GFA of 109,002 sqm in Guangzhou’s Pazhou area, was handed over to Mapletree on 15 March 2021. The area is designated as an artificial intelligence and digital economy pilot zone featuring high quality projects by renowned technology, media and telecommunications companies. Pre-leasing activities are in progress.
Mapletree continues to pursue promising opportunities, winning two residential land tenders in Zengcheng District, Guangzhou (land area of 24,660 sqm, GFA of ~93,706 sqm) and Xinwu District, Wuxi (land area of 76,907 sqm, GFA of ~169,195 sqm) in December 2020. The projects are conveniently located next to existing metro stations and are expected to yield approximately 800 and 1,400 residential units respectively. MARKET REVIEW AND OUTLOOK China was the only major economy to expand in 2020, registering 2.3% growth. Although nationwide commercial real estate investment value contracted by 28% year-on-year, both market sentiment and investment activities recovered in H2 2020 as the pandemic was largely brought under control.
The country’s “dual circulation” policy mTower Beijing is a Grade A office building located in Lize Financial Business District, Beijing, China. of higher dependence on domestic consumption and home-grown technology propelled confidence in both investment and leasing activities, their downtrend with more foreign developers to offload their existing especially in asset classes such as investment funds returning. properties. In addition, expiries of real decentralised business park offices estate funds will add to investment and data centres. On the retail front, social distancing opportunities, given the spike in measures have hindered a full recovery transactions between 2016 and 2018. China’s resilient economy and strong while the e-commerce sector continued occupier demand made it one of the to outperform. Meanwhile, reduced favoured destinations for cross-border supply in the residential market, coupled investors. As office rental is expected with restrictive lending, will likely lead to head north in 2021 with improving to a more sustainable price growth. business sentiment, office capital On the other hand, more acquisition values are likely to remain strong opportunities may emerge as curbs Reference: while capitalisation rates continue on real estate loans lead domestic i. China National Bureau of Statistics
57 OPERATIONS REVIEW india
A DEEPENING PRESENCE IN INDIA initiative works at Global Infocity Park Chennai, including the repainting Mapletree’s India business unit Mapletree continued to grow its of its exterior, lobby and food court portfolio of commercial properties develops and manages real renovations as well as electrical in India, with total assets under transformer upgrading works. estate assets in India, as well as management increasing from deepens its presence through S$963.4 million in FY19/20 to Through proactive operational S$1.1 billion in FY20/21. The acquisitions and investments in optimisation initiatives across various current portfolio spans four cities areas such as manpower, consumables, this developing economy. (Bengaluru, Chennai, Mumbai and as well as mechanical, engineering Pune), comprising two development and plumbing equipment, Mapletree projects and two investment projects, With owned and managed achieved significant savings from the increasing total net lettable area (NLA) reduction of common area maintenance assets of S$1.1 billion as at from 541,351 square metres (sqm) in costs. In FY20/21, Global Technology 31 March 2021, the business FY19/20 to 792,368 sqm in FY20/21. Park in Bengaluru and Global Infocity unit contributed S$69.3 million Park Chennai received the British In September 2020, the Group’s footprint Council Safety Assurance Certification 1 to the Group’s EBIT + SOA expanded to include Mumbai, with the for Covid-19 safety measures. Both acquisition of approximately 25,516 sqm and S$0.1 million in fee parks remained operational throughout of land for development as office space. the Covid-19 pandemic, with safety income in Financial Year measures implemented early on 2020/2021 (FY20/21). Notwithstanding Mapletree’s including the provision of touch-free comprehensive measures to provide a taps, sanitisers and soap dispensers. safe working environment, the Covid-19 Combined occupancy at Mapletree’s pandemic affected footfall at existing operational parks in India was about business parks. Mapletree used this 94% as at 31 March 2021. period to carry out asset enhancement
An artist’s impression of Mapletree’s Grade A office development in Pune, Maharashtra, India sited on a 7.7-acre land parcel.
58 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Spanning an NLA of 252,415 sqm, Global Infocity Park Chennai is located along one of India’s prime information technology corridors.
MARKET REVIEW AND OUTLOOK H1 2021 and gradually recover in H2 2021. Technology firms are In advanced estimates by the expected to continue leading Ministry of Statistics and Programme office space demand in Bengaluru, Implementation, India’s economy is Hyderabad, Pune and the National expected to shrink by 8% in FY20/21. Capital Region. Demand for logistics By the close of FY20/21, however, warehouses is expected to remain economic activity was better than healthy in 2021, backed by demand expected. Capital expenditure by from e-commerce and third-party the government increased and a logistics providers. nationwide vaccination drive had started. According to the International India’s real estate market attracted Monetary Fund, the Indian economy is US$4.8 billion in private equity expected to grow by 12.5% in 2021. investments in 2020, led by the commercial office sector. There were Despite the pandemic, net office two additional real estate investment absorption for 2020 was recorded at trust listings in FY20/21, sponsored approximately 70% of the previous by foreign institutional investors. three years’ average. While there was Institutional investments are expected an increase in vacancy across major to increase in 2021, backed by cities, rentals for Grade A office spaces investors’ long-term positive outlook remained largely stable. According of the India economy. to Colliers, net office absorption is expected to remain largely stable over 2021, with demand mostly driven 1 Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated by technology companies as well as companies and joint ventures (SOA), excluding the engineering and manufacturing residential profits, incentive fee from private sectors. In 2020, most tenants split funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange their employees’ work locations and derivatives gains or losses. between home and the office due to the pandemic. Hence, demand for new References: i. Ministry of Statistics and Programme office space may remain subdued over Implementation ii. Colliers India Market Outlook 2021 iii. JLL iv. International Monetary Fund
59 OPERATIONS REVIEW AUSTRALIA & NORTH ASIA
AUSTRALIA Phase 1 will be completed in Spring 2023 and Phase 2 will be completed The Australia & North Asia As at 31 March 2021, MASCOT’s portfolio in Spring 2024. When completed, the comprised 10 commercial properties in business unit focuses on site will be the largest logistics facility five key gateway cities, with a total net in Fukuoka prefecture, which is a hub deepening Mapletree’s lettable area (NLA) of approximately for logistics, high technology and presence in Australia, 158,000 square metres (sqm). automobile manufacturing sectors. Hong Kong SAR, Japan and Development is expected to take During FY20/21, asset enhancement approximately four years and the total South Korea, and explores initiative (AEI) works for 11 Waymouth gross floor area (GFA) is estimated to opportunities in new real Street in the Adelaide central business be 231,956 sqm. district were completed and the retail estate asset classes in these podium was fully leased. The façade Mapletree’s Japan focused logistics countries. and lobby of the North Building of development fund (MJLD) was fully 22 Giffnock Avenue, Sydney were also realised in June 2020, achieving an upgraded as a proactive measure to 3 The business unit also internal rate of return of 23.7%, above enhance leasing efforts and the ground the target fund return of 13% to 15%. manages a private equity floor was successfully leased as a result. AEI works at other properties included fund that was syndicated in Oakwood Suites Yokohama, a 175-unit the completion of the speculative Oakwood-managed serviced apartment November 2019 – Mapletree fit-out at one property to capture located in Yokohama, commenced Australia Commercial Private increasing market demand for smaller, operations in November 2020. Brand fitted-out units, with a similar strategy awareness and marketing campaigns Trust (MASCOT). currently being implemented at two other properties. With owned and managed The enhancements helped MASCOT assets of S$3 billion as maintain a portfolio committed at 31 March 2021, the occupancy of 87.8% as at 31 March business unit contributed 2021 and a weighted average lease expiry (WALE)2 of 2.9 years, in the face S$40.7 million to the of downward pressure on the leasing Group’s EBIT + SOA1, and market amid the Covid-19 pandemic. MASCOT made two semi-annual S$12.3 million in fee income distributions to investors for FY20/21, in Financial Year 2020/2021 equivalent to a 7.3% annualised yield (FY20/21). cumulatively. JAPAN With the Group’s focus on fund syndication to drive fee-based income, a land parcel was purchased with the intention to seed a new Japan logistics fund. It will be developed as a Grade A warehouse facility known as Mapletree Chikushino Logistics Centre. The land acquisition in November 2020 was at a cost of approximately JPY7 billion (~S$86.4 million), with expected total Oakwood Suites Yokohama occupies the 46th st development cost at approximately to 51 floors of The Kitanaka Yokohama Tower, Yokohama’s tallest and largest residential complex. JPY47.6 billion (~S$588.1 million).
60 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 for Oakwood Suites Yokohama are in With the rollout of Covid-19 vaccines progress to capture the domestic and robust economic growth in China, travel market. the Hong Kong SAR economy is expected to resume positive growth HONG KONG SAR in 2021. Accompanying the 10% rise in loan-to-value ratio caps and abolition Mapletree won the land tender for of double stamp duty, a slight rebound an industrial site in February 2021. is anticipated for the non-residential Acquired at approximately HK$813 property market. Office and industrial million (~S$140.4 million), the site in capital values are expected to bottom Fanling, New Territories, is strategically out first in H1 2021. located near the Chinese border and has well-established infrastructure. The SOUTH KOREA 4,028 sqm site will be developed into With the economy showing a the Group’s first data centre in Hong moderate rebound in the second Kong SAR. Upon completion in 2023, it half of 2020, the country’s full-year will have a maximum GFA of 20,140 sqm. GDP contracted by only 1%. Strong SOUTH KOREA demand for stable income-generating assets, a resilient economy and deep
Mapletree, Mapletree North Asia The Pinnacle Gangnam comprises 24,650 sqm of pools of domestic capital supported Commercial Trust, and an independent NLA and is located in Gangnam Business District, the office market in Seoul. Total office third-party investor co-invested in Seoul, South Korea. transaction volume reached a record an office building, The Pinnacle high of KRW13.1 trillion in 2020 and Gangnam, at a cost of approximately has exceeded KRW10 trillion for three KRW452 billion (~S$535.1 million) consecutive years. out in 2021 and will begin to rebound in October 2020. This is the Group’s in 2022. first office property in the country The domestic economy is expected and is strategically located in Seoul’s JAPAN to grow by 3% in 2021 driven by the Gangnam business district, known as administration of Covid-19 vaccines Total real estate transaction volume the Silicon Valley of South Korea. and strong semiconductor exports. reached JPY3.8 trillion in 2020, With a GFA of 44,444 sqm and NLA of Meanwhile, South Korea will remain up 5.2% from 2019 as overseas 24,650 sqm, the building has direct a preferred market for investment in investments increased by 30% access to a subway station and a the region, with domestic and foreign year-on-year. Japan is expected to diversified tenant base with a high ratio buyers maintaining a keen appetite for remain as one of the most attractive of international tenants. Committed core office assets in Seoul. real estate investment markets. occupancy was 96.5% as at 31 March 2021, with a WALE2 of 2.5 years. Logistics and data centre properties MARKET REVIEW AND OUTLOOK have been highly sought after, driven by increasing digitalisation and AUSTRALIA e-commerce growth expedited by the Covid-19 pandemic. Offices are 1 Earnings before interest and tax (EBIT) plus The Covid-19 pandemic negatively share of operating profit or loss of associated affected vacancies and net effective also a popular choice with capital companies and joint ventures (SOA), excluding rents in the commercial real estate values holding up despite increasing revaluation gains or losses, divestment gains or losses, foreign exchange and derivatives market. Vacancy rates in all major vacancy and decreasing effective rent, gains or losses. markets reached double digits and as evidenced by an increase in the 2 WALE is weighted by tenants’ proportionate net effective rents for commercial real sale or sale-and-leaseback of non-core share of asset or portfolio's income. 3 After expenses, taxes and base management estate fell by 3% to 16% nationally. corporate assets. fee but before carried interest.
References: Based on data published by the HONG KONG SAR i. JLL Real Estate Intelligence Services Australian Bureau of Statistics, gross Real GDP shrank by a record 6.1% in ii. Australia Bureau of Statistics domestic product (GDP) contracted by 2020, leading to a contraction for two iii. Reserve Bank of Australia Statement of Monetary Policy (February 2021) 2.4% in 2020. However, this was less consecutive years. A lack of distressed iv. CBRE Market Review, Japan Investment, than the 6% contraction forecasted assets and investors’ wait-and-see Q4 2020 at the onset of the pandemic, and approach dragged down commercial v. CBRE Asia Pacific Real Estate Market Outlook, Japan, 2021 the Reserve Bank of Australia expects real estate transaction volume in 2020, vi. Census and Statistics Department, HKSAR recovery to be faster than previously while capital values fell across the Government vii. Hong Kong Monetary Authority anticipated. Consequently, the real board amid rising vacancies and viii. Bank of Korea estate market is expected to bottom falling rents. ix. Savills Korea
61 OPERATIONS REVIEW GROUP LODGING
STUDENT ACCOMMODATION Mapletree’s Group Lodging Mapletree’s student accommodation portfolio – including those held under business unit develops, MGSA and Mapletree Investments – acquires and manages the comprises 51 assets with over 22,000 Group’s global lodging beds located across 34 cities in the United Kingdom (UK), the United States assets comprising student (US) and Canada. The total assets accommodation, serviced under management (AUM) amount to apartments and multifamily approximately S$3.7 billion. assets, as well as oversees MGSA currently holds 25 assets in Oakwood’s hospitality the UK and 10 assets in the US, with management business a total AUM of about S$2 billion and over 14,000 beds. As the fund worldwide. The business manager, Mapletree optimises portfolio unit also includes a private returns and maximises asset value through proactive asset management, real estate fund, the operational improvement and Mapletree Global Student enhancing residents’ experience. Accommodation Private Trust In December 2020, Mapletree The Chestnut at University City, Philadelphia, the US. (MGSA). completed its first student housing development project in the US. With With owned and managed 405 units, The Chestnut at University units with an AUM of approximately City is adjacent to the Wharton School S$1.8 billion. assets of S$5.3 billion of the University of Pennsylvania, which (excluding Oakwood) as at is top ranked in the US. Of the serviced apartment assets, 31 March 2021, the business 11 are in the US, two in Japan and one Westwood Student Mews, Mapletree’s each in Australia and Vietnam. The four unit contributed S$41.6 million first UK student housing development multifamily assets are in the US. to the Group’s EBIT + SOA1, comprising 453 beds, was completed in December 2019. Since completion, OAKWOOD’S GROWING FOOTPRINT and S$20.4 million in fee the property serving the University of AND BRAND income in Financial Year Warwick has seen leasing performance In FY20/21, Oakwood launched the 2020/2021 (FY20/21). gaining traction and positive student following new properties: reviews. • Oakwood Suites Yokohama, Japan • Oakwood Suites & Studios Dupont Mapletree also successfully acquired a Circle Washington DC, the US 135-bed student housing asset in the • KeSa House, The Unlimited UK in December 2020. The property Collection by Oakwood, Singapore is located close to the University of • Wanderlust, The Unlimited Collection Reading, which ranks among the top by Oakwood, Singapore 30 universities in the UK. Management agreements were also SERVICED & MULTIFAMILY signed for the following properties: RESIDENCES • Oakwood Hotel & Apartments Yangon, Myanmar Mapletree’s serviced and multifamily • Oakwood Hotel & Residence residence portfolio consists of Bangkok, Thailand 15 serviced apartments and four • Ann Siang House, The Unlimited multifamily assets totalling over 3,800 Collection by Oakwood, Singapore
62 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 The Unlimited Collection by Oakwood of Oakwood Clean360 globally and Accommodation market fundamentals targets independent travellers seeking assisting in ongoing risk analysis and remain strong, with a forecasted average unique stay experiences that are enhancements to the programme. annual growth rate of 2.1% by 2030. authentic to each property and its Together with a tightly constrained destination, and is one of two new Furthermore, to support students development pipeline, the structural brands debuted by Oakwood during who were unable to return to their undersupply is expected to persist. the year. Oakwood has partnered a accommodation during periods of local real estate company to manage national lockdown in the UK, Mapletree Given border and visa restrictions its first three iconic heritage properties has provided financial assistance preventing international student (Ann Siang House, KeSa House and through rent reliefs. arrivals, coupled with the shift to online Wanderlust) under this brand. learning, occupancy has been impacted MARKET REVIEW AND OUTLOOK as a result of Covid-19. Nonetheless, Another brand addition is Oakwood Mapletree is cautiously optimistic about Beluxs, which caters to well-travelled STUDENT ACCOMMODATION increased leasing momentum in our citizens of the world. Through a In the US, university enrolment held assets, as vaccination programmes in strategic alliance with one of China’s steady at 19.7 million in 2020, despite the UK and the US get into full swing by leading real estate developers, Country border restrictions preventing some summer 2021. Garden Commercial and Culture international students from entering Tourism Group, the goal is to open 100 the country. Similarly, rental rates SERVICED & MULTIFAMILY Oakwood Beluxs properties by 2030 and occupancy in Q4 2020 remained RESIDENCES in Mainland China’s 50 cities with the resilient, decreasing by 0.4% and Multifamily demand proved resilient highest gross domestic product. 0.2% respectively, compared to as occupancies, renewals and leasing Q4 2019. The US National Center activities remained stable. Eviction LANDMARK INITIATIVES for Educational Statistics projects moratoriums and rent relief requests In response to Covid-19, Oakwood enrolment will increase to 20.1 million are expected to extend through 2021 Clean360 was launched in June 2020 to students by 2029. if unemployment claims remain high. ensure the health and safety of guests, Nonetheless, further economic and job associates and business partners. In the UK, approximately 2 million recovery is anticipated in the next few Oakwood subsequently became full-time students were enrolled for the years which will continue to drive demand. the world’s first serviced apartment Academic Year 2019/2020, up 3.9% Though serviced apartments were more brand to mandate face masks in from the previous year. International adversely impacted by the pandemic, public areas. International SOS, a students from non-European Union Oakwood has been able to limit leading health and security services countries also increased by 15.5% from volatility as its portfolio of differentiated company, is undertaking accreditation the previous year. Purpose-Built Student brands provides a well-balanced mix of long and short stays. The robustness of this business model has become an attractive option for future collaboration with owners and developers.
As borders reopen, occupancy has also started to pick up in tandem. Meanwhile, Oakwood has also pivoted towards domestic businesses, leisure travellers and alternative uses of space for remote-working. Travel capacity may however, take longer to return to previous levels, especially with relatively depressed demand for corporate travel.
1 Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated companies and joint ventures (SOA), excluding residential profits, incentive fee from private funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange and derivatives gains or losses. Wanderlust, The Unlimited Collection by Oakwood, Singapore comprises 29 thoughtfully appointed rooms and suites. Reference: i. Times Higher Education, 2021
63 OPERATIONS REVIEW europe and usa
COMMERCIAL In the UK, two new office buildings, 400 and 450 Longwater Avenue at Green Mapletree’s Europe and USA Mapletree focuses on cities where Park, achieved practical completion on office demand is underpinned by (EUSA) business unit evaluates, 8 March 2021. With lakeside terraces, the technology, pharmaceutical, life three-metre clear floor-to-ceiling acquires, develops and sciences or healthcare sectors. This heights, column-free office space and manages assets in a range of focus is best illustrated by Mapletree’s accreditations from both BREEAM and acquisition of 11 commercial buildings real estate sectors. WELL, these buildings occupy a total in Raleigh, North Carolina, Uptown GFA of 22,000 sqm and are currently Station in Oakland, California and the highest quality office buildings These currently include Galatyn Commons, a four-building available in the Thames Valley. In March, office portfolio in Richardson, Texas. commercial, logistics and data Mapletree agreed terms with Three UK These acquisitions broaden Mapletree’s Mobile to lease 450 Longwater Avenue centre assets. EUSA’s mandate exposure in the US with a total for a 15-year period. focuses on broadening and investment value (TIV) of US$1 billion (~S$1.3 billion). deepening Mapletree’s In line with Mapletree’s aim of building scalable capital management platforms, exposure beyond the In Europe, Mapletree marked its first Mapletree syndicated its first European foray into the Dutch commercial office Asia-Pacific region, by investing office fund, Mapletree Europe market with the acquisition of six office Income Trust (MERIT) in March 2021, in new and existing asset buildings at Papendorp Park in Utrecht, successfully raising EUR507 million classes across key gateway the Netherlands for EUR147 million (~S$812.9 million). Fully invested at (~S$236 million). With 43,282 square cities in Europe, the United closing, the fund owns seven Grade A metres (sqm) of gross floor area (GFA), office assets worth EUR1.2 billion Kingdom (UK) and the United the buildings were 99% occupied as at (~S$1.9 billion) located in key growth States (US). December 2020. cities of Manchester, Bristol, Aberdeen, Warsaw, Munich, Dublin and Utrecht. FY20/21 saw the practical completion With owned and managed of The Sorting Office in Dublin, Ireland LOGISTICS assets of S$13.1 billion as at on 7 July 2020, which was awarded LEED Platinum Certification from the EUSA’s portfolio of 283 logistics assets 31 March 2021, the EUSA US Green Building Council. spans 5.6 million sqm across 26 states business unit contributed S$344.3 million to the Group’s EBIT + SOA¹, and S$52.9 million in fee income in Financial Year 2020/2021 (FY20/21).
Papendorp Park comprises six office buildings with 43,282 sqm of NLA in Utrecht, the Netherlands.
64 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 AUM 2020. With the deployment of vaccines, fiscal stimulus and accommodative (S$ billion) monetary policies, the 2021 outlook seems positive for all three regions. With 25 further economic recovery, commercial 20.8 real estate fundamentals are expected 18.9 20 to normalise, especially in the second half of the year, as workers return to their 14.6 offices and travel resumes. 15 13.8 12.5 Despite the prevalence of working from home as part of social distancing 10 8.1 9.8 measures announced by governments 4.5 around the world to stem the spread 5 2.7 5.0 of Covid-19, commercial real estate 7 1.7 6.4 7.0 4.8 is expected to continue to play an 2.0 2.8 3.1 important role in providing space for 0 FY15/16 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 collaboration, facilitation of ideas, manifestation of corporate culture, n Europe and the UK n The US ● Total innovation and productivity. Resilient * AUM growth in Europe, the US and the UK – figures include data centre and student markets that are set to emerge accommodation assets managed but not owned by EUSA. stronger in a post Covid-19 workplace include those characterised by above average population and office using in the US and 20 cities in Europe. and weighted average unexpired lease employment growth, prevalence of Most of these assets are held under term have remained stable at 95.5% and strong growth sectors, favourable Mapletree US & EU Logistics Private approximately four years respectively. vaccine progress and subsequent easing Trust (MUSEL), a fully invested core of pandemic restrictions. Quality assets fund with assets under management MUSEL’s robust performance has in these market types are expected to (AUM) of US$4.9 billion (~S$6.5 billion) enabled the fund to deliver a blended remain attractive and highly sought after and unit holder equity of US$1.8 billion internal rate of return (IRR)³ of 16.6% in a post Covid-19 world. (~S$2.5 billion), of which Mapletree and a cash yield of 5.9% since inception, retains a 33.6% stake². outperforming both the target IRR³, as Logistics real estate benefitted as the well as projected cash yields. pandemic accelerated the structural Covid-19 has had a generally positive shift away from physical retailing to impact on demand from several logistics DATA CENTRES e-tailing and from just-in-time to user groups, including e-commerce The pandemic has shown data centres just-in-case supply chain management. companies, third-party logistics to be a resilient asset class. To increase Meanwhile, disruptions to global supply service providers and essential goods exposure on this front, Mapletree chains have encouraged companies suppliers. More than 1.1 million sqm of and Mapletree Industrial Trust (MIT) in the US and Europe to consider leases were executed during FY20/21, expanded its US data centre portfolio on-shoring and near-shoring their and positive rental reversions of with the acquisition of a data centre manufacturing to reduce risk and be approximately 9% have been achieved complex located in Richmond, Virginia, closer to end-consumers. since fund inception. Both occupancy for a purchase consideration of US$207.8 million (~S$278.5 million). This freehold property is fully leased 1 Earnings before interest and tax (EBIT) plus on a triple net basis, to a multinational share of operating profit or loss of associated company with a strong credit rating. companies and joint ventures (SOA), excluding residential profits, incentive fee from private funds’ divestment, revaluation gains or losses, MIT completed the acquisition of divestment gains or losses, foreign exchange 60% stake in 14 US data centres for and derivatives gains or losses. 2 Excluding directors’ and senior management’s US$215.3 million (~S$288.1 million) stake in MUSEL. from Mapletree in September 2020. 3 After expenses, taxes and base management fee but before carried interest.
MARKET REVIEW AND OUTLOOK References: i. Bureau of Economic Analysis, United States The pandemic has caused the US Department of Commerce and the UK economies to contract by ii. Eurostat Uptown Station, located in Oakland, California, 3.5% and 9.9% respectively, while the iii. CBRE Research the US was acquired in March 2021. iv. Bloomberg Eurozone economy shrank by 6.8% in v. JLL
65 OPERATIONS REVIEW MAPLETREE LOGISTICS TRUST
STAYING RESILIENT Mapletree Logistics Trust Amid the turbulent operating environment in the face of a global (MLT or the Trust) is a pandemic, exacerbated by geopolitical Singapore-listed real estate tensions and trade conflicts, MLT’s investment trust (REIT) that well-diversified portfolio across geographies as well as tenant trade invests in and manages a sectors demonstrated its resilience. Located in the Yongin-Icheon area, a prime diversified portfolio of In FY20/21, MLT continued to deliver logistics cluster in South Korea, Mapletree Logistics Centre – Iljuk 2 is well-suited for distribution to the 163 quality, well-located, steady growth. MLT’s gross revenue increased by 14.3% year-on-year to eastern part of Seoul. income-producing logistics S$561.1 million, while net property assets in Singapore, Australia, income rose 13.8% to S$499.1 million. offers attractive long term prospects. China, Hong Kong SAR, India, The amount distributable to unitholders rose 10.4% to S$333.1 million while These acquisitions strengthen MLT’s Japan, Malaysia, South Korea distribution per unit was 2.3% higher at geographical diversification and and Vietnam. 8.326 Singapore cents. network connectivity, positioning the Trust to capture future growth MLT’s robust performance was opportunities in the region. As at 31 March 2021, the driven by organic growth from its MLT acquired a portfolio of nine business unit’s total assets existing portfolio, contributions from accretive acquisitions as well high-quality modern logistics under management was as the completed redevelopment of properties, seven in China, one in S$10.7 billion. It contributed Mapletree Ouluo Logistics Park Phase 2 Malaysia³ and one in Vietnam, as well as the remaining 50% interest in S$467.7 million to Mapletree’s in China. In a period of heightened market uncertainty, the management 15 logistics properties in China from EBIT + SOA¹ and S$81.6 million maintained a firm focus on active its Sponsor, Mapletree Investments to fee income² in Financial asset management targeting tenant for S$1.1 billion. Year 2020/2021 (FY20/21). retention and portfolio occupancy. On the back of these efforts, portfolio In South Korea, MLT acquired a occupancy was maintained at a stable portfolio of five modern freehold MLT became a component level throughout the year, ending at logistics properties located in 97.5% as at 31 March 2021. The lease Yongin-Icheon, for KRW280 billion stock in the MSCI Singapore expiry profile is well-staggered with a (~S$331.5 million). With their modern Index on 29 May 2020 and has weighted average lease expiry (by net specifications and favourable locations lettable area) of 3.6 years. with excellent connectivity, the been a component stock in properties will significantly scale up the benchmark Straits Times STRENGTHENING NETWORK MLT’s competitive positioning, enabling Index since December 2019. CONNECTIVITY IN ASIA PACIFIC the Trust to better capture growth opportunities in the South Korean Inclusion in these indices has During FY20/21, MLT enhanced its logistics market. enhanced MLT’s visibility and regional presence with the acquisitions profile among global investors of 18 quality and well-located logistics In March 2021, MLT made inroads facilities in Australia, China, India, into India through the acquisition and raised its trading liquidity. Japan, South Korea and Vietnam as of two modern logistics facilities for well as the remaining 50% interest in 15 INR4,550 million (~S$83.9 million). logistics properties in China. FY20/21 The properties are located in Pune, also marked MLT’s first foray into India, an important warehousing market in a fast-growing logistics market that India with demand driven largely by
66 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 e-commerce, third-party logistics as well as manufacturing. The properties are leased to a tenant base comprising mostly of multinational corporations.
During the year, MLT also completed the acquisitions of two properties in Australia – a warehouse in Brisbane for A$114 million (~S$118.7 million) and another in Melbourne via a forward purchase for A$18.4 million (~S$19.2 million). In Japan, MLT acquired a newly developed freehold logistics facility in Hiroshima for JPY6,370 million (~S$78.7 million). These properties are designed with modern specifications and offer Mapletree Logistics Park Talegaon is well-connected to the major cities and transportation infrastructure in excellent connectivity to transportation the region, such as the Mumbai Metropolitan Region, Pune city centre, Pune Airport and Jawaharlal Nehru infrastructure such as highways and Port, via the Mumbai-Pune Expressway. airports. UNLOCKING VALUE THROUGH PROACTIVE ASSET MANAGEMENT MLT also continued to gain momentum rates of e-commerce adoption and in sustainable financing by securing its a greater emphasis on supply chain Asset redevelopment and selective inaugural green loan valued at S$200 resiliency have translated to growing divestment of older properties form million to refinance or finance a suite demand for modern logistics facilities an integral part of MLT’s portfolio of green projects. in markets with fast-growing domestic rejuvenation strategy to build a resilient consumption. and future ready portfolio. In FY20/21, MARKET REVIEW AND OUTLOOK MLT completed the redevelopment of MLT’s diversified markets and tenant The International Monetary Fund Mapletree Ouluo Logistics Park Phase 2 base continue to underpin the stability forecasts global growth of 6% in 2021 on a prime site close to Shanghai of its cash flows and operational after a 3.5% contraction in 2020. Pudong International Airport in China. performance. Overall leasing demand In advanced economies, pent-up The S$70 million redevelopment has in MLT’s markets is expected to remain demand is expected to drive growth resulted in a modern, two-storey relatively resilient. MLT continues to as economic activity normalises on the ramp-up facility with a gross floor area pursue yield accretive acquisitions of back of vaccines rollout. The emerging of 80,700 sqm, an increase of 2.4 times quality logistics facilities and asset markets and developing economies from before. Given its strategic enhancements to drive organic growth may take until 2023 to return to location, the property has secured while maintaining a disciplined capital pre-pandemic output levels. However, strong leasing demand from third-party management approach to mitigate recovery of the world economy logistics service providers. the impact of interest rate and foreign continues to face uncertainty and risks exchange volatilities. PRUDENT CAPITAL MANAGEMENT in the face of new Covid-19 outbreaks and variants. MLT continues to maintain its discipline in capital and risk management to Nevertheless, the logistics market ensure a strong balance sheet and in Asia Pacific has demonstrated its the financial flexibility to seize growth resilience in the past year and remains 1 Earnings before interest and tax (EBIT) plus share of operating profit or loss of associated opportunities. During the year, MLT a bright spot. Structural drivers of companies and joint ventures (SOA), excluding launched an equity fundraising exercise demand in the logistics sector such as residential profits, incentive fee from private which was well received by institutional e-commerce growth, urbanisation and funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange and retail investors, raising a total modernisation of supply chains are and derivatives gains or losses. of S$644.1 million. The proceeds likely to underpin demand for modern 2 Includes REIT management fees. warehouse space for some time to 3 The proposed acquisition of Mapletree were deployed to partially fund the Logistics Hub – Tanjung Pelepas is pending acquisitions of nine logistics properties come. Several of these structural completion. in China, Malaysia and Vietnam as trends were evident prior to the Reference: well as the remaining 50% interest in pandemic and have been accelerated i. International Monetary Fund, World Economic 15 logistics properties in China. by the Covid-19 crisis. Notably, higher Outlook, April 2021
67 OPERATIONS REVIEW MAPLETREE industrial TRUST
Mapletree Industrial Trust (MIT) is a Singapore-listed real estate investment trust (REIT) that manages a diverse portfolio of 87 properties in Singapore and 28 properties in North America (including 13 data centres held through a joint venture with Mapletree Investments). MIT’s property portfolio An artist’s impression of the redeveloped Kolam Ayer 2 Cluster which will be completed in the second half includes Data Centres, of 2022. Hi-Tech Buildings, Business Park Buildings, Flatted SUPPORTING TENANTS DURING for FY20/21 increased by 2.5% y-o-y to THE COVID-19 PANDEMIC 12.55 Singapore cents. Factories, Stack-up/Ramp-up Buildings and Light Industrial MIT extended rental reliefs of MIT was added to the FTSE Straits approximately S$12.7 million to tenants Buildings. Times Index on 22 June 2020, in FY20/21, comprising MIT’s Covid-19 enhancing its trading liquidity and Assistance and Relief Programme as visibility with investors. Managed by Mapletree well as mandated rental reliefs under the Covid-19 (Temporary Measures) BUILDING A RESILIENT Industrial Trust Management Act 2020. Priority was given to PORTFOLIO Ltd, the REIT seeks to provide small and medium-sized enterprises MIT acquired the balance 60% unitholders with sustainable negatively affected by lower business volumes and supply chain disruptions. interest in 14 data centres in the US and growing returns through from Mapletree for approximately proactive asset management, DELIVERING STABLE RETURNS US$215.3 million (~S$288.5 million). The agreed property value of the value-creating investment Gross revenue and net property 14 data centres on the 60% basis was management and prudent income (NPI) for FY20/21 grew 10.2% US$494.0 million (~S$662.0 million). capital management. and 10.4% year-on-year (y-o-y) to S$447.2 million and S$351.0 million MIT raised gross proceeds of respectively. These were mainly approximately S$410.0 million through As at 31 March 2021, MIT’s attributed to the consolidation of a private placement to fund the revenue and expenses from the 14 data acquisition, which was approximately total assets under management centres in the United States (US). The 8.2 times covered at the top end of was S$6.8 billion. In Financial increase in gross revenue was partly the issue price range of S$2.800 per Year 2020/2021 (FY20/21), it offset by rental reliefs extended to new unit. tenants in FY20/21 and revenue loss contributed S$182.2 million to from the redevelopment of the Kolam In FY20/21, the 14 data centres Mapletree’s EBIT + SOA1 and Ayer 2 Cluster. Distributable income for were 96.7% leased to 15 reputable S$63.9 million to fee income2. FY20/21 rose 11.3% y-o-y to S$295.3 tenants, including Fortune Global 500 million. The improved performance corporations and NYSE- and Nasdaq- was mainly due to higher NPI and cash listed companies. With a net lettable distributions declared by joint ventures. area (NLA) of about 209,291 square Correspondingly, distribution per unit metres (sqm), the 14 data centres
68 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 are situated on freehold land3 and 24.4% of the enlarged GFA. The anchor Sentiments for construction and strategically located in established data tenant is committed to fully lease a transportation sectors remained centre markets across the US. seven-storey Build-to-Suit facility for downbeat. 15 years5 with annual rental escalations. Data centres have demonstrated to CBRE expects investment in data be resilient with growth opportunities SUSTAINABLE FINANCING centres in North America to increase amid the pandemic. To extend its in 2021 based on strong revenue MIT took its first step into sustainable foothold in this sector, MIT acquired growth projection. There will also be financing when it secured its inaugural another data centre located in Virginia, more supply entering the market due S$300 million sustainability-linked the US, for approximately US$207.8 to the increased construction pipeline facility in December 2020. This is in million (~S$278.5 million). The freehold of 457.8 megawatts (MW) across line with MIT’s strategy to diversify property is fully leased on a triple net primary markets in 2020, compared to sources of funding and to underscore basis, with a balance lease term of 183.0MW in 2019. Out of the 457.8MW its commitment to sustainable and more than five years to a multinational under construction, approximately responsible growth. With a tenor of up company with strong credit standing. 239MW has been preleased, mainly to to six years, the facility links the cost hyperscale and cloud service providers, of financing to selected sustainability Construction works to transform which will continue to make up the bulk performance targets. the Kolam Ayer 2 Cluster into a of the leasing volume in 2021. New new Hi-Tech industrial precinct and evolving technologies such as 5G, MIT’s balance sheet remained strong, commenced during the financial year. edge computing and Internet of Things with an aggregate leverage ratio The redevelopment of the cluster will will continue to drive interest from of 40.3% as at 31 March 2021 and increase the utilised plot ratio from operators to diversify their portfolios committed facilities of more than 1.5 to 2.5 and increase the total gross to serve smaller secondary and tertiary S$600 million available for drawdown. floor area (GFA) by approximately markets. 70% to about 80,420 sqm. With a total project cost of S$300 million4, MARKET REVIEW AND OUTLOOK MIT’s large and diversified tenant base the redevelopment is on track for The outlook for local businesses in with low dependence on any single completion in the second half of 2022. Singapore is showing signs of recovery. tenant or trade sector will continue to The quarterly Singapore Commercial underpin its portfolio resilience. 74 out of 108 tenants at the Kolam Credit Bureau’s Business Optimism Ayer 2 Cluster had committed to new Index study marked its first positive leases at alternative MIT clusters. MIT reading after four straight quarters has secured pre-commitment from in negative territory. However, the a global medical device company 1 Earnings before interest and tax (EBIT) plus optimism was limited to the financial, share of operating profit or loss of associated headquartered in Germany for about manufacturing and wholesale sectors. companies and joint ventures (SOA), excluding residential profits, incentive fee from private funds’ divestment, revaluation gains or losses, divestment gains or losses, foreign exchange and derivatives gains or losses. MIT’s contribution to Mapletree’s EBIT + SOA decreased 42.3% y-o-y to S$182.2 million in FY20/21. This was mainly attributed to the deconsolidation of MIT. 2 Includes REIT management fees. 3 All properties are sited on freehold land, except for the parking deck (150 Carnegie Way) at 180 Peachtree, Atlanta, the US. As at 31 March 2021, the parking deck has a remaining land lease tenure of approximately 34.8 years, with an option to renew for an additional 40 years. 4 Includes the book value of the Kolam Ayer 2 Cluster at S$70.2 million as at 31 March 2019 prior to the commencement of the redevelopment. 5 This includes a rent-free period of six months distributed over the first six years. The anchor tenant will be responsible for all operating expenses and property tax of the Build-to-Suit facility.
References: i. The Straits Times, Business sentiment in Singapore turning positive: Poll, 16 March 2021 7337 Trade Street, San Diego is one of the 14 properties which MIT acquired the balance 60% from the ii. Singapore Commercial Credit Bureau, 2Q2021 Group in the US. iii. CBRE North American Data Center Report H2 2020, 8 March 2021
69 OPERATIONS REVIEW MAPLETREE commercial TRUST
MAINTAINING LONG-TERM recover. However, ongoing public health RESILIENCE directives continue to hinder full recovery. Mapletree Commercial Trust (MCT) is a Singapore-focused In FY20/21, MCT recorded S$479 million To help tenants cope, MCT swiftly and of gross revenue and S$377 million decisively rolled out a comprehensive real estate investment trust of net property income (NPI), lower tenant support package. Since the (REIT) that makes long-term by 0.8% and 0.2% respectively onset of the pandemic, more than year-on-year (y-o-y). Although the 4 investments in a diversified S$70 million in rental assistance was full-year performance was dampened granted to eligible retail tenants, portfolio of income-producing by Covid-19 rental rebates, MBC II’s offsetting on average more than four office and retail properties. maiden contribution helped to cushion months of their fixed rents. the impact. The amount of distribution 3 for FY20/21 was S$314.7 million , Notwithstanding Covid-19 disruptions, MCT’s portfolio comprises five while distribution per unit totalled MCT persisted in its efforts to enhance properties in Singapore: 9.49 Singapore cents. VivoCity for the eventual upturn: • VivoCity • Leveraging the “circuit breaker” Since its listing on 27 April 2011, MCT’s downtime to replace the flooring • Mapletree Business City market capitalisation has grown from of the entire mall so as to minimise (MBC) S$1.6 billion to more than S$7 billion as inconvenience to tenants and at 31 March 2021. Including distributions shoppers. • mTower (former PSA paid out since listing, the total return to • Reconfiguring the mini-anchor Building) unitholders is 231.3%. space on Level 2 to give it a wider • Mapletree Anson and more inviting shopfront, while ENHANCING VIVOCITY FOR THE recovering a portion of prime space • Bank of America Merrill EVENTUAL UPTURN to accommodate a homegrown Lynch HarbourFront (MLHF) For much of the financial year, businesses online-to-offline fashion retailer. were impacted by the government- This exercise achieved a more than 30% annual return on investment As at 31 March 2021, the mandated “circuit breaker”, including 10 weeks of business closures, prolonged (S$1.3 million of estimated capital portfolio has a total net travel restrictions and work-from-home expenditure) on a stabilised basis. lettable area (NLA) of more measures. These curtailed footfall and • Revitalising the Level 1 promenade- facing food and beverage cluster than 465,000 square metres sales across the retail sector. With the gradual easing of measures from with the addition of prominent (sqm), valued at S$8.7 billion. 19 June 2020, shopper traffic and names like Afuri Ramen, Green tenant sales at VivoCity have begun to Common, Hoshino Coffee and It contributed S$384.4 million Shake Shack. The new cluster has and S$66.9 million to the Group’s EBIT + SOA¹ and fee income² respectively in Financial Year 2020/2021 (FY20/21).
adidas Originals and Performance flagship stores are the largest in Southeast Asia and Singapore respectively.
70 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 been well-received by shoppers was acquired on 1 November 2019, a resurgence in Covid-19 infections since its progressive opening from as well as the increased contribution leads to more shutdowns, tightened September 2020 and is expected from Mapletree Anson due to higher safe distancing measures, prolonged to generate an approximate 30% occupancy and the effects of step-up border closures, as well as extended annual return on investment rents in existing leases, provided a work-from-home directives and other (S$700,000 of estimated capital cushion. Full-year gross revenue and health protocols in Singapore. Potential expenditure) on a stabilised basis. NPI from MCT’s office and business challenges could also arise when park assets were 13.7% and 14.7% government support tapers off and MAINTAINING RETAIL VIBRANCY higher respectively compared to the the economy realises the full impact of AND HEALTHY OCCUPANCY previous year. Covid-19. Covid-19 has had an adverse impact At the end of FY20/21, MBC I and MCT’s focus remains to maintain on shopper traffic and tenant sales. mTower were 94.6% and 91.7%5 a healthy portfolio occupancy and Notwithstanding the resulting drop in committed respectively, while MBC II, sustainable rental income. As Singapore retailers’ confidence, MCT’s retail assets Mapletree Anson and MLHF reported further resumes economic activities and have maintained healthy occupancies full actual occupancy. makes advances in the vaccine rollout, and retained a good portion of tenants. MCT will continue to monitor the Despite approximately 20% of NLA MARKET REVIEW AND OUTLOOK pandemic situation carefully and work expiring during this challenging period, closely with tenants and stakeholders. FY20/21 ended with a retention rate According to the Ministry of Trade and MCT remains proactive and nimble of 80.8%. Industry, Singapore’s economy grew in implementing suitable measures by 1.3% on a y-o-y basis in the first to mitigate further impact and in quarter of 2021, a turnaround from supporting the authorities’ efforts in the 2.4% contraction recorded in the containing the outbreak, while keeping previous quarter. On a quarter-on- in mind long-term value creation to quarter seasonally adjusted annualised our properties. basis, the economy expanded by 3.1%, extending the 3.8% growth in the Anchored by a well-diversified portfolio previous quarter. with key best-in-class assets, MCT is expected to derive stable cash flows According to CBRE, retail indicators from high quality tenants. MCT’s have continued to show signs of overall resilience will keep the vehicle recovery with unemployment declining well-placed to ride through the and shopper traffic improving. However, pandemic. the retail sector has yet to reach full recovery as this is highly dependent on VivoCity’s revitalised Level 1 promenade-facing the reopening of Singapore’s borders cluster introducing prominent names like and development of Covid-19. 1 Earnings before interest and tax (EBIT) plus Shake Shack. share of operating profit or loss of associated companies and joint ventures (SOA), excluding Office demand is expected to be residential profits, incentive fee from private At VivoCity, MCT secured expansion supported by employment gains, a funds’ divestment, revaluation gains or losses, gradual economic recovery and a tight divestment gains or losses, foreign exchange by existing tenant, adidas. It enlarged and derivatives gains or losses. its total footprint by approximately supply pipeline. The recovery is not 2 Includes REIT management fees. 3 In 4Q FY19/20, MCT made capital allowance 2.7 times to introduce adidas Originals’ expected to be uniform, with the Grade A market foreseen to be the claims and retained capital distribution largest flagship store in Southeast Asia totalling S$43.7 million in view of the on Basement 1 in December 2020 and main beneficiary as large corporates uncertainties associated with Covid-19. Of this, leverage the pull-back in rents for an S$28 million was released and included in the adidas Performance’s largest flagship distribution to unitholders in FY20/21. store in Singapore on Level 1 in April upgrade in location and quality. 4 Refers to assistance for eligible retail tenants granted as at 31 March 2021, and includes the 2021. VivoCity closed the financial passing on of property tax rebates, cash grants year with 99.1% committed occupancy, Leasing activities in the business park from the government and other mandated marginally lower than the previous sector were relatively subdued in grants to qualifying tenants. Q1 2021. Looking ahead, quality will 5 Subsequent to the reporting year, there was year’s 99.7%. mutual agreement to terminate a lease at continue to be of priority and buildings mTower ahead of its commencement. Assuming MBC II ADDS STABILITY, with higher specifications are expected the lease pre-termination had occurred before to see greater demand. 31 March 2021 and the space had remained MAPLETREE ANSON INCREASES uncommitted as at 31 March 2021, mTower’s CONTRIBUTION committed occupancy would be 79.7%. Despite the availability of vaccines, References: During a challenging year, the full- there are still persisting uncertainties. i. Ministry of Trade and Industry year contribution from MBC II which Downside risks could materialise if ii. CBRE Research
71 OPERATIONS REVIEW MAPLETREE north asia commercial trust
NAVIGATING COVID-19 flexible leasing strategies, which helped maintain a high portfolio occupancy The fourth real estate FY20/21 continued to see the impacts rate of 97% as at 31 March 2021. investment trust (REIT) of Covid-19 in some of the markets that MNACT’s properties are located The MNACT Manager also continued sponsored by Mapletree in. In Hong Kong SAR, various stringent Investments, Mapletree North with its diversification strategy to social distancing measures led to cushion the impact of Covid-19 on Asia Commercial Trust (MNACT), lower domestic consumption, affecting MNACT’s distribution. During the offers investors opportunities to retail sales and footfall at Festival Walk financial year, two office properties invest in high-quality commercial mall. Leasing demand from tenants that were acquired in Greater Tokyo, properties situated in North Asia. at Festival Walk mall was also muted. Japan, in February 2020 made full-year While the performance of Sandhill Plaza contributions to MNACT’s revenue. and the Japan Properties were relatively As at 31 March 2021, MNACT’s The MNACT Manager also expanded resilient amid Covid-19, the Beijing MNACT’s investment mandate to portfolio of 12 properties in office sector was hit by increased supply include South Korea and co-invested China, Hong Kong SAR, Japan and a broad and sharp downturn in the with the Sponsor in The Pinnacle and South Korea comprises: global economy, leading to diminished Gangnam, an office building located in leasing activities at Gateway Plaza. Seoul, which added to MNACT's profit. • Festival Walk, a landmark To mitigate the impact on MNACT’s FINANCIAL PERFORMANCE territorial retail mall with an portfolio, the manager of MNACT (the office component, in Hong MNACT Manager) implemented swift For FY20/21, MNACT recorded net Kong SAR measures including rental reliefs of property income (NPI) of S$292 million. The growth of 5.2% in NPI was mainly • Gateway Plaza, a Grade A S$50.5 million to support tenants and office building in Beijing • Sandhill Plaza, a Grade A business park development situated in Zhangjiang Science City in Pudong, Shanghai • The Japan Properties, comprising four office buildings in Tokyo, an office building in Yokohama and three office buildings in Chiba • The Pinnacle Gangnam, a freehold office building with retail amenities located in Gangnam business district, Seoul.
As at 31 March 2021, MNACT’s total assets under management was S$7.9 billion¹. In Financial Year 2020/2021 (FY20/21), it contributed S$331.1 million to 2 Mapletree’s EBIT + SOA , and The Pinnacle Gangnam is located in Gangnam business district and has direct access to a subway station S$46.6 million to fee income3. (Gangnam-gu Office station), providing excellent connectivity across the Seoul metropolitan area.
72 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 due to the full-year contributions from annum for FY19/20. To enhance the In Hong Kong SAR, low consumption mBAY POINT Makuhari and Omori stability of MNACT’s distributions, demand will continue to weigh on retail Prime Building acquired in February approximately 73% of MNACT’s interest sales, with prospects of a recovery 2020, and a low base effect as no cost has been hedged into fixed rates dependent upon the effectiveness of rentals were collected in H2 FY19/20 as at 31 March 2021. To mitigate the mass vaccination programme and during the temporary closure of Festival exchange rate risk, about 90% of the re-opening of the border. Rental Walk mall from 13 November 2019 to expected foreign-sourced distributable rates are expected to drop further in 15 January 2020 and its office tower income for H1 FY21/22 has also been 2021 as the pandemic takes its toll on from 13 to 25 November 2019 (Festival hedged into Singapore Dollars. the economy, before bouncing back in Walk Temporary Closure). However, 2022 and 2023. the increase was partially offset by ACTIVE ASSET MANAGEMENT higher rental reliefs granted and lower For the Beijing office market, demand average rental rates at Festival Walk In view of the evolving retail landscape, is expected to remain soft, while supply and Gateway Plaza in FY20/21. the MNACT Manager continued to is set to surge. In Shanghai, due to the strengthen brand offerings at Festival lingering impact of Covid-19, some Distribution per unit (DPU) for FY20/21 Walk in Hong Kong SAR, bringing in office tenants are expected to remain was 6.18 Singapore cents, 13.3% more brands from resilient trades such cost sensitive. lower compared to 7.12 Singapore as food and beverage, services and cents in FY19/20. This was due to lifestyle offerings. During the year, In Japan, concerns over the economic top-ups to the distributable income4 the MNACT Manager also launched outlook have led to corporates being in FY19/20 to enable a certain level the “MyFestival” loyalty programme cautious about capital expenditure. of distributable income and DPU to to enhance shopping experience and Office buildings in non-core areas mitigate the loss of rental during the increase digital touchpoints. As a result where rental levels are lower are Festival Walk Temporary Closure. The of the MNACT Manager’s active leasing expected to attract a certain level DPU decline was partially mitigated efforts, the occupancy rate for Festival of demand, either from companies by the contribution from The Pinnacle Walk remained high at 99.9%. Average looking to cut costs or set up satellite Gangnam, acquired during the period, renewed and re-let rental rates were offices. In Seoul, demand from the IT, and lower finance costs. however, lower due to the challenging gaming, biotech and pharmaceutical retail environment. industries are expected to grow going The Pinnacle Gangnam is located in forward, despite lower demand from Gangnam business district and has With continued focus on stabilising some construction and international direct access to a subway station occupancy levels at Gateway Plaza to consumer companies. (Gangnam-gu Office station), providing minimise downtime, occupancy rate excellent connectivity across Seoul improved to 92.9% as at 31 March 2021. Against this backdrop, the MNACT metropolitan area. However, the softening market demand Manager will continue to focus and significant supply influx impacted on active asset management, and PRUDENT CAPITAL MANAGEMENT rental levels of new and renewed leases accretive acquisitions to achieve greater at the property. Sandhill Plaza achieved diversification of MNACT’s portfolio, As at 31 March 2021, both committed a high occupancy rate of 97.9% as at while keeping an active and prudent and uncommitted credit facilities 31 March 2021, underpinned by approach on capital management. that remained undrawn amounted to demand from the technology, media S$513.8 million. Together with cash and telecommunications sector. and bank balances of S$252.2 million, 1 Includes MNACT’s 50% effective interest in these provide MNACT with sufficient The eight office properties in Japan The Pinnacle Gangnam. liquidity to satisfy its working capital 2 Earnings before interest and tax (EBIT) plus demonstrated resilience in a volatile share of operating profit or loss of associated and operating requirements, meet market, achieving a higher occupancy companies and joint ventures (SOA), excluding maturing debt obligations and allow residential profits, incentive fee from private of 97.8%, compared to a year ago. The funds’ divestment, revaluation gains or losses, for adequate debt headroom for Pinnacle Gangnam registered a high divestment gains or losses, foreign exchange financial flexibility. and derivatives gains or losses. occupancy rate of 96.5%, attesting to 3 Includes REIT management fees. the attractiveness of the asset. 4 Please refer to MNACT’s SGX-ST 3Q FY19/20 MNACT’s aggregate leverage ratio Financial Results Announcements dated stood at 41.5% as at 31 March 2021, 17 January 2020 and SGX-ST 4Q FY19/20 MARKET REVIEW AND OUTLOOK Financial Results Announcements dated 29 taking into account lower portfolio April 2020. valuation, while interest cover ratio While there are expectations for a improved from 3.5 times as at gradual economic recovery in 2021 References: i. CBRE, Hong Kong Retail Marketview (Q4 2020) 31 March 2020 to 3.7 times as at with vaccines rolled out progressively ii. Savills, Hong Kong Retail (January 2021) 31 March 2021. The effective interest globally, increasing global infections iii. JLL, Asia Pacific Property Digest (Q4 2020) iv. CBRE, 2021 Asia Pacific Real Estate Market rate for FY20/21 was lower at 2.0% and delays in vaccine deployment pose Outlook, Japan per annum, as compared to 2.4% per risks to the pace of recovery. v. Savills, Seoul Prime Office (Q4 2020)
73 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
Singapore
Industrial
43 Keppel Road Bougainvillea Realty Pte Ltd 100 8,600 11,400 7,800
Tanjong Pagar Distripark Bougainvillea Realty Pte Ltd 100 40,200 80,500 62,900
Mixed-use
HarbourFront Centre HarbourFront Centre Pte Ltd 100 32,900 97,700 66,287
Office
20 Harbour Drive Vista Real Estate Investments 100 12,900 21,900 13,400 Pte Ltd
HarbourFront Tower One HarbourFront Two Pte Ltd 100 40,300 34,200 10,900 HarbourFront Tower Two HarbourFront Two Pte Ltd 100 (combined) 19,200 14,200
St James Power Station The HarbourFront Pte Ltd 100 17,800 12,900 11,100
Sites for Development/Land Leases
The Reef at King’s Dock HarbourFront Three Pte Ltd 61 28,600 32,000 -
SPI Development Site HarbourFront Four Pte Ltd 100 25,000 32,000 -
West Coast Ferry Terminal Bougainvillea Realty Pte Ltd 100 19,900 4,100 18,800 (land lease)
Australia
Logistics
Mapletree Logistics Park AlexandraLog AUS Assets Pty Ltd 100 363,950 196,715 196,715 – Crestmead
Serviced Apartment
Oakwood Apartments Brisbane Bridge SA (QL) Trust 100 2,966 10,642 6,697
Canada
Data Centre
6800 Millcreek Garrison DC Holdings Pte Ltd 50 24,295 – 7,781
74 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
China
Industrial
Mapletree Fullshine City Shanghai Fullshine Industrial 100 79,269 68,433 66,877 Industrial Park Development Co Ltd
Logistics
Mapletree Anji (International) Anji Feng’ao Industrial Co Ltd 100 101,280 60,271 57,108 Industrial Park
Mapletree Changchun EDZ Fengchun Warehouse 100 93,986 51,466 50,278 Industrial Park (Changchun) Co Ltd
Mapletree Changchun Kuancheng Fengkuan Warehouse 100 99,998 58,317 58,774 Modern Industrial Park (Changchun) Co Ltd
Mapletree Chaohu Industrial Fengxun Warehouse (Chaohu) 100 183,141 120,578 119,767 Logistics Park Co Ltd
Mapletree Chengdu Central Fengcong Industrial (Chengdu) 100 58,222 44,858 40,910 Kitchen Base Co Ltd
Mapletree Chengmai Jinma Fenghai Logistics Development 100 133,333 81,975 80,940 Logistics and Industrial Park (Hainan) Co Ltd
Mapletree Chongqing Airport Fengqian Warehouse 100 73,602 82,430 77,404 Logistics Park (Chongqing) Co Ltd
Mapletree Chongqing Bishan Fengju Warehouse (Chongqing) 100 97,883 55,270 54,555 Logistics Park Co Ltd
Mapletree Chongqing Fengzhong Warehouse 100 88,938 106,769 97,691 Cross-Border Logistics Park (Chongqing) Co Ltd
Mapletree Chongqing Jiangjin Fengfu Industrial (Chongqing) 100 73,587 47,436 47,037 Comprehensive Industrial Park Co Ltd
Mapletree Chongqing Liangjiang Fengjiang Warehouse 100 101,351 101,113 104,899 Logistics Park (Chongqing) Co Ltd
Mapletree Chuzhou Industrial Park Fenghui Industrial (Chuzhou) 100 152,244 101,593 101,472 Co Ltd
Mapletree Dalian International Fengbin Warehouse (Dalian) 100 119,878 73,409 71,659 Logistics Park Co Ltd
Mapletree (Dalian) Logistics Park Fengguang Warehouse (Dalian) 80 96,531 56,642 57,739 Co Ltd
Mapletree East Sichuan Modern Fengzhao Warehouse 100 108,867 60,910 60,049 Logistics Park (Nanchong) Co Ltd
75 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
China
Logistics
Mapletree Feixi Industrial Park Fengyan Warehouse (Hefei) 100 106,036 60,718 60,489 Co Ltd Mapletree Gaolan Modern Lanzhou Fengen Warehouse 100 154,235 87,458 85,703 Logistics Park Co Ltd Mapletree Haiyan Industrial Park Fengcang Industrial (Haiyan) 100 79,669 86,472 68,782 (Phase 1) Co Ltd Mapletree Haiyan Industrial Park Fenglan Industrial (Haiyan) 100 68,523 77,904 63,823 (Phase 2) Co Ltd Mapletree (Harbin) Logistics Park Harbin Fenggang Warehouse 100 100,000 56,867 59,128 Co Ltd Mapletree Hefei Xinzhan Fenghong Warehouse (Hefei) 100 93,002 112,444 90,553 Industrial Park Co Ltd Mapletree Huaian Industrial Park Fengan Warehouse (Huaian) 100 157,023 84,897 89,022 Co Ltd Mapletree (Jiangyin) Industrial & Feng’ang Industrial (Jiangyin) 100 159,277 97,630 102,419 Logistics Park Co Ltd Mapletree (Jiaozhou) Fenglai (Qingdao) Warehouse 100 66,621 37,110 36,111 Logistics Park Co Ltd Mapletree Jiaxing Industrial Park Feng’er Warehouse (Jiaxing) 100 75,697 77,062 76,578 Co Ltd Mapletree Jiedong Modern Fengdeng (Jieyang) Logistics 100 68,512 75,205 61,020 Logistics Comprehensive Park Development Co Ltd Industrial Park Mapletree Jinghai Logistics Park Fengjing Warehouse (Tianjin) 100 59,113 34,779 34,572 Co Ltd Mapletree Jinghe Logistics Park Xi’an Fengjie Warehouse Co Ltd 100 136,051 80,366 79,589 Mapletree Kaifeng Logistics Park Fengkun Warehouse (Kaifeng) 100 133,696 76,582 74,962 Co Ltd Mapletree Kunming Airport Kunming Fengyun Warehouse 100 117,671 66,504 65,650 Logistics Park Co Ltd Mapletree Lianyungang Logistics Fengchong Warehouse 100 138,686 85,759 84,634 Industry Park (Lianyungang) Co Ltd
76 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
China
Logistics
Mapletree (Linhai) Industrial Park Fengpeng Warehouse (Linhai) 100 223,802 173,157 156,205 Co Ltd
Mapletree Liuhe Logistics Park Fenghao Warehouse (Nanjing) 100 130,237 68,259 71,231 Co Ltd
Mapletree Luoyang Logistics Park Fengluo Warehouse (Luoyang) 100 78,668 36,729 35,221 Co Ltd
Mapletree Nanjing Industrial Park Fenghu Warehouse (Nanjing) 100 108,341 109,922 89,856 Co Ltd
Mapletree Nanjing Logistics Park Fengxu Warehouse (Nanjing) 100 68,843 70,282 68,711 Co Ltd
Mapletree Nanxun Lianshi Fengqiao Industrial (Huzhou 100 100,970 110,810 88,335 International Manufacturing Park Nanxun) Co Ltd
Mapletree Ningbo Hangzhou Bay Ningbo Hangzhou Bay Fengtao 100 153,707 223,800 151,951 International Industrial Park Industrial Co Ltd
Mapletree Panjin Supply-Chain Panjin Fenghe Warehouse 100 113,827 72,347 71,442 Industrial Park Co Ltd
Mapletree Pingyuan New Area Fengpan Warehouse (Xinxiang) 100 114,703 65,377 63,622 Modern Logistics Park Co Ltd
Mapletree Putian Xiuyu Fengyou Warehouse (Putian) 100 113,861 63,467 62,682 Comprehensive Logistics Park Co Ltd
Mapletree (Quanzhou TIZ) Quanzhou Fenglian Warehouse 100 104,793 105,332 108,312 Logistics Park Co Ltd
Mapletree Shenfu International Liaoning Fengsheng Warehouse 100 59,275 36,542 35,664 Logistics Park Co Ltd
Mapletree Shijiazhuang Lingshou Fenghui Warehouse Shijiazhuang 100 133,886 74,912 73,871 Logistics Park Co Ltd
Mapletree Shuanglong Fengchang Industrial (Guiyang) 100 93,942 77,839 64,283 Industrial Park Co Ltd
Mapletree Suzhou Logistics Park Fengwang Warehouse (Suzhou) 100 60,633 61,600 59,778 Co Ltd
77 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
China
Logistics
Mapletree Taiyuan Modern Supply Taiyuan Fengpu Warehouse 100 87,824 48,538 47,503 Chain Industrial Park Co Ltd
Mapletree Tongxiang Fengtong Industrial (Tongxiang) 100 79,347 81,493 69,470 Industrial Park Co Ltd
Mapletree Tuanfeng Logistics Park Fengmao (Tuanfeng) Warehouse 100 128,251 75,504 74,467 Co Ltd
Mapletree (Wenzhou) Fengfan Industrial (Wenzhou) 100 160,008 138,385 126,571 Industrial Park Co Ltd
Mapletree Wuhu International Feng’ou Industrial (Wuhu) Co Ltd 100 121,844 81,517 80,549 Industrial Park
Mapletree Xiangtan Logistics Park Xiangtan Fengxiu Warehouse 100 143,094 69,911 68,682 Co Ltd
Mapletree Xiaogan Linkong Fengmin Logistics (Xiaogan) 80 124,342 78,756 77,882 Logistics Park Co Ltd
Mapletree Xixian Airport Fengyang (Xixian New District) 100 122,286 72,047 71,006 Logistics Park Warehouse Development Co Ltd
Mapletree (Xuzhou) Automatic Fenghuai Warehouse (Xuzhou) 100 116,032 106,455 93,373 Logistics Park Co Ltd
Mapletree Yangzhou Fengyuan Warehouse (Yangzhou) 100 139,965 80,494 83,807 Industrial Park Co Ltd
Mapletree Yantai Modern Yantai Fengjun Warehouse 100 119,210 61,137 65,071 Logistics Park Co Ltd
Mapletree (Yaozhuang) Science Fenggao Industrial (Jiaxing) 100 116,164 137,592 129,877 and Technology Industrial Park Co Ltd
Mapletree Yiliang Industrial Park Fengting (Kunming) Warehouse 100 99,856 57,042 56,116 Co Ltd
Mapletree (Yinchuan) Ningxia Fengxia Warehouse 100 134,218 75,635 74,823 Logistics Park Co Ltd
Mapletree (Yiwu) Industrial Park Fengzhuo Warehouse (Yiwu) 100 149,488 128,393 113,923 Co Ltd
Mapletree (Yixing) Industrial Park Fenghuan Warehouse (Yixing) 100 133,492 69,911 73,932 Co Ltd
78 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
China
Logistics
Mapletree (Yuyao) Logistics Park Fengxuan Logistics (Yuyao) 80 83,622 46,811 48,914 Co Ltd
Mapletree (Yuyao) Logistics Park II Fengyu Warehouse (Yuyao) 100 119,864 65,564 69,824 Co Ltd
Mapletree Zhangzhou Zhangzhou Xinzhanwang 100 69,660 76,717 67,320 Logistics Park Industrial Co Ltd
Mapletree (Zhengzhou) Airport Zhengzhou Fengzhuang 100 161,718 95,951 94,735 Logistics Park Warehouse Co Ltd
Mapletree (Zhongshan) Modern Fengteng Warehouse 100 41,163 23,361 24,112 Logistics Park (Zhongshan) Co Ltd
Mapletree (Zhumadian) Logistics Fengxing Warehouse 100 100,000 64,576 61,814 Park (Zhumadian) Co Ltd
Mapletree Zhuzhou Logistics Park Zhuzhou Fengwo Warehouse 100 105,016 57,038 56,084 Co Ltd
Weifang Mapletree Modern Fengshou Warehouse (Weifang) 100 52,338 31,911 30,981 Supply Chain Industrial Park Co Ltd
Office mPlaza Guangzhou Guangzhou Xingjian Xingsui 100 – 109,002 – Real Estate Co Ltd mTower Beijing Beijing Yinhe Yongtai Business 100 – 51,235 – Management Co Ltd mTower Wuhan Wuhan Illinois Business 100 – 81,771 – Management Co Ltd
Residential
Guangzhou Zengcheng Guangzhou Fengzhou Real 100 24,660 93,706 – Residential Development Project Estate Co Ltd
Wuxi Xinwu Residential Wuxi Fengyuan Real Estate 100 76,907 169,195 – Development Project Co Ltd
79 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
Hong Kong SAR
Data Centre
Development Site for Data Centre Mapletree TM (HKSAR) Limited 100 4,028 20,140 – at Fanling, Hong Kong SAR
India
Office
Global Infocity Park Chennai Faery Estates Private Limited 100 50,077 – 252,415
Global Technology Park Adamas Builders Private Limited 100 52,862 – 173,786
Ireland
Office
The Sorting Office Nova Asset (Dublin) Limited 100 5,600 – 20,085
Japan
Logistics
Mapletree Chikushino Logistics Somei TMK 100 116,431 231,956 229,682 Centre
Office
TF Nishidai Building Godo Kaisha Zelkova 100 11,086 22,792 14,576
Serviced Apartment
Oakwood Apartments Azabudai, Kashinoki TMK 100 364 3,000 2,088 Tokyo
Oakwood Suites Yokohama Matsunoki TMK 100 13,135 14,039 9,745
Malaysia
Logistics
Mapletree Logistics Hub – Symphony Warehouse Sdn Bhd 100 61,491 128,585 127,445 Jubli Perak
Mapletree Logistics Hub – Trinity Bliss Sdn Bhd 80 112,988 148,989 131,986 Tanjung Pelepas, Iskandar
Mapletree Logistics Hub – Utas Strategic Sonata Sdn Bhd 70 157,034 342,020 337,120
Retail
Jaya Shopping Centre Jaya Section Fourteen Sdn Bhd 100 8,600 39,300 24,500
80 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
Poland
Logistics
Lubuskie 2 Building (Dirks BTS) AlexandraLog PLW04 Sp. Z.o.o. 100 – – 44,293
Wroclaw 2 Building 1 AlexandraLog PLSW01 Sp. Z.o.o. 100 – – 34,150 (Wroclaw II – A1)
Wroclaw 2 Building 2 AlexandraLog PLSW01 Sp. Z.o.o. 100 – – 18,724 (Wroclaw II – A2)
Wroclaw 2 Building 3 AlexandraLog PLSW01 Sp. Z.o.o. 100 – – 30,570 (Wroclaw II – A3b)
Wroclaw 2 Building 4 AlexandraLog PLSW01 Sp. Z.o.o. 100 – – 26,229 (Wroclaw II – A3a)
South Korea
Office
The Pinnacle Gangnam IGIS Qualified Investment Type 68.6 2,987 44,444 24,650 Private Placement Real Estate Investment Trust No. 6
The United Kingdom
Mixed-use
Green Park Green Park Reading No. 1 LLP 100 790,000 – 147,987
Office
Diageo Headquarters Derry Park Assets (UK) Limited 100 6,020 – 14,684
The United States
Data Centre
115 Second Avenue Medina DC 2 Assets LLC 50 11,841 – 6,199
375 Riverside Parkway Medina DC 1 Assets LLC 50 129,471 – 23,244
2055 East Technology Circle Medina DC 1 Assets LLC 50 36,743 – 7,093
8534 Concord Center Drive Medina DC 1 Assets LLC 50 19,799 – 7,958
11900 East Cornell Avenue Monterey DC Assets LLC 50 39,538 – 26,478
17201 Waterview Parkway Monterey DC Assets LLC 50 38,093 – 5,737
21110 Ridgetop Circle Medina DC 2 Assets LLC 50 34,367 – 12,589
21561-21571 Beaumeade Circle Monterey DC Assets LLC 50 57,260 – 15,278
21744 Sir Timothy Drive (ACC 10) Mason DC Assets LLC 40 67,016 – 26,850
81 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
The United States
Data Centre
21745 Sir Timothy Drive (ACC 9) Mason DC Assets LLC 40 76,157 – 30,458
44490 Chilum Place (ACC 2) Mason DC Assets LLC 40 89,442 – 8,083
45901 - 45845 Nokes Boulevard Medina DC 2 Assets LLC 50 49,589 – 15,530
Logistics
105 E Oakton St Sheares Logistics Assets LLC 100 26,709 – 16,774
302 E University Drive Sheares Logistics Assets LLC 100 16,916 – 7,058
319 Richard Mine Road Sheares Logistics Assets LLC 100 34,884 – 7,493
650 Long Beach Boulevard Helix Logistics Assets LLC 100 48,651 – 10,870
800 NW 33rd Street Helix Florida 2 Logistics 100 12,440 – 4,032 Asset LLC
1301 Tower Rd Helix Logistics Assets LLC 100 24,155 – 4,682
1881 Rose Road Helix Logistics Assets LLC 100 26,474 – 9,422
2050 S Mt Prospect Road Sheares Logistics Assets LLC 100 24,604 – 13,268
2304 Tarpley Road Helix Logistics Assets LLC 100 33,552 – 9,768
2935 Ramco Street Sheares Logistics Assets LLC 100 100,401 – 41,305
4475 West 700 South Sheares Logistics Assets LLC 100 72,681 – 32,115
6490 Hazeltine National Drive Helix Florida 1 Logistics 100 12,505 – 3,152 Asset LLC
7825 Rappahannock Ave Helix Logistics Assets LLC 100 22,298 – 11,228
7850 Oceano Ave Helix Logistics Assets LLC 100 22,338 – 10,472
11200 88th Ave Helix Logistics Assets LLC 100 81,259 – 25,182
14325 Gillis Road Sheares Logistics Assets LLC 100 37,761 – 16,286
14327 Gillis Road Sheares Logistics Assets LLC 100 12,395 – 5,346
Multifamily
Denizen Denver Properties I, LLC 100 11,644 27,710 17,669
Latitude 45 Minneapolis Properties III, LLC 100 4,446 36,593 23,357
Mint Urban Infinity Glendale Properties II, LLC 100 47,690 40,433 39,180
Place on Ponce Decatur Properties I, LLC 100 8,463 21,668 19,698
82 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
The United States
Office
50 South Sixth South Sixth Office LLC 100 4,731 100,832 64,903
1009 Think Place Think Place Office 1 LP 100 55,401 17,219 17,219
1025 Think Place Paramount Office LP 100 60,177 17,004 17,004
1500 Perimeter Park Perimeter Park Offices LP 100 22,136 7,438 7,438
1600 Perimeter Park Perimeter Park Offices LP 100 22,379 8,369 8,369
1700 Perimeter Park Perimeter Park Offices LP 100 20,477 7,176 7,176
1800 Perimeter Park Perimeter Park Offices LP 100 15,945 4,936 4,936
2000 Perimeter Park Perimeter Park Offices LP 100 17,199 5,072 5,072
2250 Perimeter Park Perimeter Park Offices LP 100 31,849 9,957 9,957
3300 Paramount Parkway Perimeter Park Offices LP 100 32,860 9,095 9,095
3800 Paramount Parkway Perimeter Park Offices LP 100 32,860 11,226 11,226
5221 Paramount Parkway Paramount Office LP 100 44,556 12,805 12,805
Uptown Station Uptown Broadway LLC 100 7,122 44,562 36,865
Serviced Apartment
Oakwood Arlington Arlington Assets LLC 100 5,129 19,045 14,374
Oakwood Chicago River North River North Assets LLC 100 1,477 27,592 15,680
Oakwood Dallas Uptown Bryson Noble LLC 100 9,442 27,691 20,893
Oakwood Miracle Mile Eighth Wilshire LLC 100 3,349 8,323 7,174
Oakwood Mountain View Boulevard City LLC 100 9,300 15,030 12,024
Oakwood Olympic & Olive Eighth Wilshire LLC 100 4,664 17,366 13,513
Oakwood Portland Pearl District Everett City LLC 100 1,858 9,662 7,383
Oakwood Raleigh at Brier Creek Courtney NC LLC 100 77,619 36,023 27,380
Oakwood Redwood City Boulevard City LLC 100 10,035 12,588 10,028
Oakwood Seattle South Lake Union Dexter City LLC 100 1,349 11,076 6,311
Oakwood Silicon Valley Labrador Cascades LLC 100 19,534 12,755 12,148
83 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
Vietnam
Logistics
Hung Yen Logistics Park 1-3 Hung Yen Logistics Park I 100 282,153 177,142 176,604 (Vietnam) Co Ltd Hung Yen Logistics Park II (Vietnam) Co Ltd Hung Yen Logistics Park III (Vietnam) Co Ltd
Mapletree Logistics Park Bac Ninh Mapletree Logistics Park Bac 100 271,354 137,358 127,002 Phase 4-5 Ninh Phase 4 (Vietnam) Co Ltd Mapletree Logistics Park Bac Ninh Phase 5 (Vietnam) Co Ltd
Mapletree Logistics Park Binh Mapletree Logistics Park Phase 3 100 452,231 247,690 246,808 Duong Phase 3-6 (Vietnam) Co Ltd Mapletree Logistics Park Phase 4 (Vietnam) Co Ltd Mapletree Logistics Park Phase 5 (Vietnam) Co Ltd Mapletree Logistics Park Phase 6 (Vietnam) Co Ltd
Mixed-use
mPlaza Saigon Saigon Boulevard Complex 100 13,632 145,751 72,976 Company Limited
Pacific Place Ever Fortune Trading Center 100 5,430 42,725 22,803 Joint Stock Company
Office
CentrePoint Nguyen Vu Investment Joint 100 4,163 44,732 28,303 Stock Company
Mapletree Business Centre Saigon South Office 1 Co Ltd 100 1,750 29,570 23,384
Residential
One Verandah Riverfront TML (Vietnam) 100 16,684 107,777 – Company Limited
RichLane Residences Saigon South Serviced 100 5,1431 34,394 19,048 Apartments Co Ltd
84 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Building/Site Asset Company Effective Land Gross Floor Net Stake (%) Area (sqm) Area (sqm) Lettable Area (sqm)
Vietnam
Retail
SC VivoCity Vietsin Commercial Complex 62 33,580 62,644 42,300 Development Joint Stock Company
Serviced Apartment
Oakwood Residence Saigon Saigon South Serviced 100 5,1431 28,856 21,081 Apartments Co Ltd
1 Combined land area for Oakwood Residence Saigon and RichLane Residences
85 PROPERty PORTFOLIO
Name of Building/Site Asset Company Effective Number Gross Floor Stake (%) of Beds Area (sqm)
Canada
Student Accommodation
Parc Cite 3275262 Nova Scotia Company 100 280 7,653
The United Kingdom
Student Accommodation
Calcott Ten Coventry Assets (UK) Limited 100 736 27,700
Millennium View Coventry Assets (UK) Limited 100 391 10,057
New Century Place Building 3 Coventry Assets (UK) Limited 100 135 3,055
Pablo Fanque House Norfolkshire Assets Limited 100 244 7,710
The Maltings Cambridgeshire Assets Limited 100 779 26,385
Westwood Student Mews Warwick Assets S.a.r.l. 100 453 12,108
The United States
Student Accommodation
4th Street Commons Sweetwater Properties I, LLC 100 562 24,214
700 on Washington Minneapolis Properties II, LLC 100 157 12,426
930 NoMo Charleston Properties I, LLC 100 430 32,748
evo at Cira Centre South Chester Loft LLC 100 850 39,019
SkyVue Apartments Pittsburgh Properties I, LP 100 627 32,118
The Chestnut at University City EM Chestnut Venture LLC 97 513 36,491
The District at Campus West Fort Collins Properties I, LLC 100 659 29,002
Todd Columbia Properties II, LLC 100 351 14,493
WaHu Minneapolis Huron Properties I, LLC 100 825 51,482
86 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 HONG KONG SAR THE UNITED KINGDOM our Mapletree Hong Kong Mapletree UK Management Limited Management Limited 4th Floor - West Works, Suites 2001-2, 20/F, White City Place, OFFICES Great Eagle Centre, 195 Wood Lane, London, 23 Harbour Road, Wan Chai, W12 7FQ, United Kingdom Hong Kong Tel: +44 207 6054 668 Tel: +852 2918 9855 SINGAPORE Fax: +852 2918 9915 THE UNITED STATES Mapletree US Management, LLC Mapletree Investments Pte Ltd th 10 Pasir Panjang Road #13-01, INDIA 5 Bryant Park, 28 Floor, Mapletree Business City, Mapletree India Management New York, NY 10018, Singapore 117438 Services Private Limited United States Tel: +65 6377 6111 Tower A, Ground Floor, Tel: +1 646 908 6300 Fax: +65 6273 2753 Global Technology Park, Marathahalli Outer Ring Road, Chicago Office AUSTRALIA Devarabeesanahalli Village, 311 South Wacker Drive, Suite 520, Mapletree Asset Management Pty Ltd Varthur Hobli, Bengaluru 560103, Chicago, IL 60606, Level 9, Suite 9.01, Karnataka, India United States 580 George Street, Tel: +91 80 6639 0800 Fax: +91 80 6639 0888 Los Angeles Office Sydney NSW 2000, Australia th Tel: +61 2 9026 8418 1 World Trade Center, 24 Floor, JAPAN Long Beach, CA 90831, CHINA Mapletree Investments Japan United States Beijing Mapletree Huaxin Kabushiki Kaisha Tel: +1 562 473 7300 Management Consultancy Co Ltd Level 10, Omori Prime Building, Suite 5BCD1 Tower B, Gateway Plaza, 6-21-12 Minamioi, Shinagawa-ku, Atlanta Office 18 Xiaguangli, East Third Ring North Tokyo 140-0013, Japan 180 Peachtree Street, Suite 610, Road, Chaoyang District, Tel: +81 3 6459 6469 Atlanta, GA 30303, Beijing 100027, China Fax: +81 3 3766 3133 United States Tel: +86 10 5793 0333 Fax: +86 10 5793 0300 MALAYSIA Texas Office Mapletree Malaysia 5757 Alpha Road, Suite 470, Foshan Mapletree Management Management Sdn Bhd Dallas, TX 75240, Consultancy Co Ltd Suite 12.05, Level 12, United States 0502 & 0503, Block 30, Fufeng Plaza, Centrepoint North Tower, No. 1 Foping 4th Road, Mid Valley City, VIETNAM Guicheng Street, Nanhai, Foshan, Lingkaran Syed Putra, Mapletree Vietnam Management Guangdong 528251, China 59200 Kuala Lumpur, Malaysia Consultancy Co Ltd Tel: +86 757 6686 0900 Tel: +603 2289 9000 18 L2-1 Tao Luc 5 Street, Vietnam- Fax: +86 757 6686 0939 Fax: +603 2283 6128 Singapore Industrial Park II (VSIP II), Binh Duong Industry - Service - Guangzhou Mapletree Huaxin POLAND Urban Complex, Hoa Phu Ward, Enterprise Management Mapletree Management Thu Dau Mot City, (Poland) Sp. Z.O.O. Binh Duong Province, Vietnam Consultancy Co Ltd st Unit 4108, Tower A, West Station II, 1 Floor, Tel: +84 274 3543 688 Zhongtai International Square, Al. Jerozolimskie 142B, Fax: +84 274 3767 678 No. 161, Linhe Xi Road, 02-305 Warszawa, Poland Tianhe District, Guangzhou, Tel: +48 22 375 94 20 Unit 501-502, Mapletree Business Guangdong 510610, China Centre, 1060 Nguyen Van Linh Parkway, Tel: +86 20 3250 2000 SOUTH KOREA Tan Phong Ward, District 7, Fax: +86 20 8852 3101 Mapletree Korea Ho Chi Minh City, Vietnam Management Co Ltd Tel: +84 28 3776 0304/5 Shanghai Mapletree Management 5F Twin City Namsan, Fax: +84 28 3776 0375 Co Ltd 366 Hangang-daero, Yongsan-gu, 11/F, Taikang Insurance Tower, Seoul, South Korea, 04323 Unit 306, Pacific Place Building, No. 429 North Nanquan Road, Tel: +82 2 6742 3200 83B Ly Thuong Kiet Street, Pudong New Area, Fax: +82 2 6742 3230 Hoan Kiem District, Shanghai 200120, China Hanoi, Vietnam Tel: +86 21 2316 7677 THE NETHERLANDS Tel: +84 24 3946 0355 Fax: +86 21 2316 7700 Mapletree Management Fax: +84 24 3946 0359 (Netherlands) B.V. Amsterdam Atrium, 5th Floor, Tower 2, Centre Building, Strawinskylaan 3071, 1077 ZX Amsterdam, the Netherlands Tel: +31 020 820 9900
87 investment activities And capital management
With a wealth of experience in the real structuring and fundraising capabilities. estate capital management market, Many of our investors are invested in Mapletree’s capital the Group is currently managing or both our private funds and public REITs. management business has managed 15 capital management As at 31 March 2021, Mapletree has vehicles on behalf of the world’s assets under management (AUM) of facilitates the strategic largest institutional investors including S$66.3 billion, of which S$46.5 billion are reinvestment of capital through pension funds, sovereign wealth funds, third-party managed assets under four public-listed real estate insurance firms, university endowments, Singapore-listed REITs and five private financial institutions and family offices. funds. In the last decade, Mapletree has investment trusts (REITs) and Our resilient real estate portfolio offers grown its third-party AUM by more than private real estate funds. As a investors exposure to both diversified five times. real estate developer, investor, and sector-focused portfolios across the public and private real estate markets, As Mapletree is committed to deliver capital and property manager delivering differentiated long-term consistent and high returns, the Group with expertise across sectors investment performance. constantly seeks opportunities to launch and markets, the Group offers new capital management platforms Mapletree has forged a strong reputation by leveraging its strong pipeline and diverse real estate investment as an industry leader in the Singapore performance of real estate assets while opportunities over a wide REIT market and private capital fostering lasting relationships with management business with origination, capital partners. risk spectrum.
FIVE-YEAR GROWTH IN THIRD-PARTY AUM & CAPITAL UNDER MANAGEMENT (S$ million)
46,536 48,000 42,204 42,000 37,747
36,000 31,051 30,000 28,111 25,947 23,453 24,000 21,839 19,043 17,880 18,000
12,000
6,000
0 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21
Funds Under Management ● Third-Party AUM
88 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Mapletree’s REITs and their portfolios, EUR507 MILLION (~S$812.9 MILLION) EQUITY RAISED FOR as well as Mapletree as a reputable sponsor. Despite the strong headwinds MAPLETREE’S FIRST EUROPEAN OFFICE FUND – brought on by Covid-19 in the retail MAPLETREE EUROPE INCOME TRUST (MERIT) and commercial sectors, the four REITs achieved an annual distribution yield Despite the disruption caused by Covid-19, Mapletree successfully closed its per unit between 4.3% and 5.8% in first European office fund at the end of March 2021. MERIT is a fully invested Financial Year 2020/2021 (FY20/21). income-yielding portfolio comprising seven commercial assets across seven major cities in Europe and the United Kingdom (UK) with a total investment EFFICIENT CAPITAL value of EUR1.2 billion (~S$1.9 billion). Although faced with challenges brought about by the pandemic, the fund attracted strong investor support, MANAGEMENT and was approximately 1.5 times covered from top institutional investors Mapletree continues to employ a including insurance firms, financial institutions and family offices. In order disciplined capital management to ensure alignment of sponsor interests with investors, the Group retained framework, delivering consistent a 26.9%1 stake in MERIT, an approach consistent with Mapletree’s other and high returns to our investors. sponsored private funds and Singapore-listed REITs. In FY20/21, even with the pandemic battering markets globally, the Group enlarged its commercial, data centre, lodging, logistics and residential The success in syndicating MERIT 2018 with the sale of three assets, and portfolio in Asia, Europe and the amid a global pandemic illustrates subsequently sold another six assets as United States (US). the confidence that investors have in a portfolio to a Blackstone-managed Mapletree’s capital management and fund in July 2019. The final asset was The Group strives to align the global real estate capabilities. acquired by Mapletree Logistics Trust development of current and new (MLT) in February 2020, and MJLD was products with our capital partners’ In addition to MERIT, Mapletree fully realised in June 2020, achieving evolving investment requirements, manages four other funds – namely a return of 1.8 times equity multiple especially in the current economic Mapletree China Opportunity Fund II and net internal rate of return (IRR)3 of climate. The capital management (MCOF II), Mapletree Global Student 23.7%. business will continue to expand as the Accommodation Private Trust (MGSA), Group develops innovative real estate Mapletree Australia Commercial Private DELIVERING STABLE RETURNS investment products to cater to the Trust (MASCOT) and Mapletree US & BACKED BY A REPUTABLE varying needs and risk-return profiles of EU Logistics Private Trust (MUSEL). SPONSOR our investors. Mapletree is also exploring the possibility of launching a private fund ACHIEVED A SUCCESSFUL EXIT Strengthening Mapletree’s capital with its US commercial portfolio. – MJLD management capability is a key strategy to achieve an optimal capital structure. MJLD was launched in 2014 with a While Mapletree continues to syndicate committed capital of JPY51 billion new private funds, the Group remains (~S$630 million), which exceeded committed to deliver sustainable the original target of JPY44 billion returns to retail investors through its (~S$543.6 million). The fund’s objective listed platforms. The Group’s four was to invest in logistics development Singapore-listed REITs – MLT, Mapletree assets and select completed logistics Industrial Trust, Mapletree Commercial assets in Japan. Upon the end of its Trust and Mapletree North Asia investment period in 2017, MJLD had Commercial Trust – have maintained made 12 investments, accounting for a resilient performance and delivered approximately 80%2 of MJLD’s capital strong returns to its investors since commitment. The fund started the their respective initial public offerings. divestment of projects in September This is testament to the quality of
89 investment activities And capital management
Name of Fund Brief Launch Investment Investment Fund Life Fund Size Description Date Universe Focus (Years)
Private Funds – Existing
Mapletree Invested in a resilient 2021 The UK and Commercial 5 EUR507 million Europe Income income-producing portfolio of Europe (~S$812.9 million) Trust (MERIT) commercial assets in key UK and European cities.
Mapletree Invested in income-generating 2019 Australia Commercial 5 A$654 million Australia commercial assets that are (~S$681 million) Commercial strategically located in key Private Trust Australian gateway cities. (MASCOT)
Mapletree US Invested in high quality and 2019 The US and Logistics 7 US$1.8 billion & EU Logistics strategically located logistics Europe (~S$2.4 billion) Private Trust assets in the US and Europe. (MUSEL)
Mapletree Invested in attractive and 2017 The UK and Student 5 US$535 million Global Student resilient income-producing the US Accommodation (~S$717 million) Accommodation student accommodation Private Trust portfolio in the UK and the US. (MGSA)
Mapletree China Invested in a portfolio of 2013 China Commercial, 9 US$1.4 billion Opportunity development projects and Industrial, (~S$1.9 billion) Fund II (MCOF II) projects with value enhancement Residential and potential located in Tier 1 and Mixed-use Tier 2 cities in China.
Name of Fund Brief Launch Investment Investment Fund Performance Description Date Universe Focus Size
Private Funds – Fully realised
MJLD Invested in logistics 2014 Japan Logistics JPY51 Achieved 1.8 development assets in Japan to billion times equity generate attractive total returns. (~S$630 multiple and net million) IRR3 of 23.7%
Mapletree India Established to maximise total 2008 China and Commercial and US$1.2 Achieved 2.0 China Fund returns by acquiring, developing India Mixed-use billion times equity (MIC Fund) and realising real estate projects (~S$1.6 multiple and net in China and India. billion) IRR3 of 13.6%
90 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Name of Fund Brief Launch Investment Investment Fund Performance Description Date Universe Focus Size
Private Funds – Fully realised
MJOF Invested predominantly in 2014 Japan Commercial JPY65 Achieved 1.9 income-generating office spaces billion times equity located primarily on or around (~$803 multiple and net the fringe of the Tokyo CBD and million) IRR3 of 27.2% within the Greater Tokyo area.
Mapletree Invested in industrial assets in 2006 Pan Asia Industrial US$299 Achieved 1.5 Industrial Fund Asia for yield and appreciation. million times equity (MIF) (~S$401 multiple and net million) IRR3 of 15.1%
Mapletree Held S$1.7 billion of industrial 2008 Singapore Industrial S$708 Achieved 1.5 Industrial Trust – assets acquired from JTC in million times equity Private (MITP) 2008. multiple and net IRR3 of 19.1%
Mapletree Focused on originating and 2005 Pan Asia All S$90 Achieved 1.2 Real Estate executing real estate mezzanine million times equity Mezzanine Fund loans in Asia. multiple and net (MREM) IRR3 of 25.3%
Name of REIT Brief Listing Investment Investment NAV4 Description Date Universe Focus Public Listed – REITs Mapletree North Invests in a diversified portfolio of 2013 North Asia Commercial ~S$4.4 billion Asia Commercial income-producing commercial real estate in Trust (MNACT) Greater China, Japan and South Korea. Mapletree Invests in a diversified portfolio of office and 2011 Singapore Commercial ~S$5.7 billion Commercial Trust retail assets in Singapore. (MCT) Mapletree Invests in a diversified portfolio of 2010 Singapore Industrial and ~S$3.9 billion Industrial Trust income-producing assets used for and North Data Centres (MIT) industrial purposes in Singapore and America income-producing assets used primarily as data centres beyond Singapore. Mapletree First Asia-focused logistics REIT in 2005 Pan Asia Logistics ~S$6.1 billion Logistics Trust Singapore, with the principal strategy of (MLT) investing in a diversified portfolio of income-producing logistics real estate and real estate related assets in Asia Pacific.
1 Eventual ownership in the fund post settlement with all investors and excluding director and senior management’s stake. 2 Total required equity for projects (including amount drawn from fund level loan for bridging purpose) as a percentage of total committed equity. 3 After expenses, taxes and base management fee but before carried interest. 4 Net asset value (NAV) attributable to unitholders for listed REITs as at 31 March 2021.
91 Participants during the 36th Singapore Bird Race held on 5 and 6 December 2020, jointly organised by Mapletree, BirdLife International and the Nature Society (Singapore). Moving towards a sustainable future Mapletree believes in the importance of integrating sustainability into its business value chain and operations. The Group seeks to achieve positive long-term outcomes for the people and communities in the markets it operates in, as well as to minimise the environmental impact of its business. Mapletree supports initiatives that align with the four key pillars of its Corporate Social Responsibility (CSR) programme – the arts, education, environment and healthcare. In Financial Year 2020/2021, Mapletree committed approximately S$3.7 million to various CSR causes.
ENVIRONMENTAL SUSTAINABILITY Environmental conservation has long been a priority for Mapletree, given the far-reaching and adverse impacts of climate change. Throughout the years, the Group has rolled out numerous initiatives to improve the energy and water efficiency of its major commercial assets.
ECONOMIC SOCIAL SUSTAINABILITY SUSTAINABILITY By executing a proven business Recognising that a high-performing strategy well that combines real company results from employees estate development, investment, living up to their potential capital and property management, and creating value, Mapletree Mapletree has generated provides a work environment that consistent and good returns to its not only enables employees to stakeholders, and established a grow but also safeguards their track record for building award- health and safety. In addition, the winning development projects Group is committed to long-term across various real estate classes partnerships with stakeholders and geographies. and beneficiaries for sustained outcomes that strengthen society. SUSTAINABILITY report
ABOUT THE REPORT OUR SUSTAINABILITY APPROACH As a leading real estate Reporting scope At Mapletree, we strive to create 102-46 102-50 102-52 long-term value for our stakeholders development, investment, by incorporating sustainable practices capital and property This report covers the sustainability into our daily operations and activities. management company performance of Mapletree for the We remain committed to building good Financial Year 2020/2021 (FY20/21) relationships with our stakeholders headquartered in Singapore, from 1 April 2020 to 31 March 2021. through the following key activities: Mapletree Investments Pte Ltd The data from prior years has been (Mapletree) is committed to included for comparison, where available. Unless otherwise stated, all incorporating sustainable information disclosed in the Group’s practices and minimising its SR relates to Mapletree, except environmental footprint in its property-specific data which are applicable to properties within business operations. Mapletree’s non-listed portfolio in Safeguarding the health and safety of Singapore. our employees and stakeholders The Group is pleased to The SR should be read together present its fifth Sustainability with the financial, operational and Report (SR), prepared in governance information detailed in the Annual Report (AR), as well as the accordance with the Global SRs published by the Group’s four Reporting Initiative (GRI) Singapore-listed real estate investment Standards: Core Option. trusts (REITs) – Mapletree Logistics Trust (MLT), Mapletree Industrial Trust (MIT), Supporting projects which have a Mapletree Commercial Trust (MCT) and positive impact on local communities We welcome all questions Mapletree North Asia Commercial Trust and feedback on (MNACT) – for a more comprehensive picture of Mapletree’s business and Mapletree’s sustainability performance. reporting practices at [email protected]. Reporting standards 102-54 102-53 Minimising the environmental The GRI Standards was selected as it footprint of our business represents the global best practice for organisations to report on a wide range of economic, environmental, social and governance (ESG) impacts. We have also applied additional guidance set forth by the GRI-G4 Construction and Real Estate Sector Disclosures which are relevant to our industry. Supplementary details are included on Maintaining high ethical standards our methodology on Page 119.
94 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Sustainability governance 102-18 102-20 102-29 102-32
A strong governance structure enables us to implement our sustainability strategy across the Group, strengthen relations with stakeholders as well as ensure overall accountability.
The Boards of the following entities are involved: • Mapletree Investments Pte Ltd The Board of each entity incorporates • Mapletree Logistics Trust Management Ltd (MLTM) sustainability matters as part of their • Mapletree Industrial Trust Management Ltd (MITM) strategic formulation. They approve, • Mapletree Commercial Trust Management Ltd (MCTM) manage and monitor Mapletree’s material • Mapletree North Asia Commercial Trust BOARD sustainability matters and its reporting. Management Ltd (MNACTM)
A strong leadership team, comprising representatives from senior management: • Mr Chua Tiow Chye, Deputy Group Chief Executive Officer (Co-Chairman) • Mr Wan Kwong Weng, Group Chief Corporate The SSC reports to the Board, Officer (GCCO) (Co-Chairman) develops the Group’s • Group Chief Development Officer SUSTAINABILITY sustainability objectives and • Chief Executive Officers (CEOs) of the four REITs STEERING COMMITTEE strategies as well as manages • Group Financial Controller and monitors the Group’s • Managing Director, Private Capital (SSC) overall sustainability Management performance. • Head, Group Human Resource • Head, Group Property Management • Group Corporate Communications representative (Secretariat)
A cross-functional committee, comprising representatives from the following: • Investor Relations (four REITs) • Group Human Resource The SWC drives • Group Development sustainability Management (GDM) SUSTAINABILITY WORKING programmes across • Property Management COMMITTEE (SWC) the organisation. • Group Legal • Private funds and Business units • Group Corporate Communications
ALL EMPLOYEES
Our commitment to sustainability The SSC continues to refine the Group’s four CEOs of the REIT Managers as well begins at the top with the oversight of sustainability strategy, manage the as other members of Mapletree’s senior the Group’s Board of Directors and the overall sustainability performance, set management across various functions. Boards of the REIT Managers namely targets as well as review management Supporting the SSC, the SWC helps MLTM, MITM, MCTM and MNACTM. policies and practices regularly. The implement, execute and monitor the SSC is co-chaired by the Deputy Group sustainability policies and practices. CEO and GCCO and consists of the
95 SUSTAINABILITY report
KNOWING THE MATTERS THAT AFFECT OUR STAKEHOLDERS MOST Stakeholder engagement and materiality 102-46
Understanding our stakeholders’ concerns and identifying the sustainability topics that matter most to them is important to us. In FY16/17, we conducted a formal Group-wide materiality assessment where we identified, prioritised and validated a list of sustainability matters that are most relevant to Mapletree as well as of significant interest to key stakeholders1.
Since then, we continue to assess the relevance of our material sustainability matters on an annual basis by drawing upon insights obtained from our day-to-day interactions as well as the evolving business environment. In FY20/21, our material sustainability matters remain unchanged.
Supporting our stakeholders during the Covid-19 pandemic
We recognise the significant impact of Covid-19 on all our stakeholders and have worked closely with them to manage the situation. The following summarises our response to the pandemic in FY20/21.
Health and safety Tenant support Community effort The health and safety of our The unprecedented Covid-19 situation As a Group, Mapletree donated employees and stakeholders at has disrupted supply chains and over 2 million disposable medical our properties remain our highest affected a large number of businesses. masks to assist frontline agencies in priority. The “circuit breaker” period (April to the battle against Covid-19, in the June 2020) in Singapore has resulted markets we operate in, including We work closely with the authorities in many retail tenants having to community caregivers to vulnerable and take all necessary precautionary temporarily cease their operations. groups in May 2020 when masks measures calibrated in line with were still in short supply. the Covid-19 scenarios. These To support our tenants and service include continuing with split-team providers, Mapletree collected over We strive to do what we can to and safe distancing arrangements S$85,000 of voluntary contributions support the community, from in FY20/21 as well as supporting from the employees’ Solidarity financial support for students, a local vaccination efforts through Payments under its Mapletree traineeship programme, donation instituting paid leave arrangements Community Sharing Fund to help of masks as well as morale boosters on vaccination days. employees of tenants and service through digital entertainment and providers who were placed on unpaid arts programmes. leave during this period.
Refer to Page 111 for more Refer to Page 115 for more information Refer to Page 114 for more information on our health and on measures to support tenants. information on our community efforts. safety measures.
96 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 ALIGNING OUR AMBITIONS WITH THE GREATER GLOBAL GOALS Sustainability matters, targets and performance 102-12 102-47
The table below summarises our material sustainability matters, current and future targets2, performance as well as how we contribute to the United Nations Sustainable Development Goals (SDGs).
Our material Targets and performance for FY20/21 Targets for FY21/22 and beyond Contribution sustainability matters to the SDGs Targets Performance : met : not met
• Achieve sustainable economic • Achieve sustainable economic growth in order to provide performance in Mapletree’s third stable returns to our Five-Year Plan by FY23/24: shareholders Economic Returns performance - Average ROIE3: 10% to 15% Achieving sustainable - Average ROE4: 10% to 15% economic growth Earnings/Cash Flow and providing - Average Recurring PATMI5: strong returns to our S$900 million to S$1 billion stakeholders. - Recycled Proceeds6,7: >S$20 billion Capital Management - Fee Income6: >S$2.5 billion - Assets under Management (AUM) Ratio: >3x - AUM: S$80 billion to S$90 billion More information on Mapletree’s third Five-Year Plan can be found on Page 50. • Continue to commit to • Continue to commit to fair fair employment practices employment practices by ensuring by ensuring that all that all individuals receive the Talent retention individuals receive the same same opportunities for hiring, Providing a positive opportunities for hiring, advancement and benefits work environment advancement and benefits for our employees • Maintain a diverse and relevant • Maintain a diverse and relevant through fair learning and professional learning and professional employment practices, development programme development programme training and equal opportunities. • Hold employee town hall • Hold employee town hall meetings meetings once a year at least once a year • Zero incidences resulting • Zero incidences resulting in in employee* permanent employee* permanent disability or disability or fatality fatality Health and safety * scoped to Singapore staff only * scoped to Singapore staff only Maintaining a safe environment for all our • Zero incidences resulting in • Zero incidences resulting in stakeholders and care fatalities* for third-party service fatalities* for TPSPs and tenants providers (TPSPs) and tenants for the well-being of * fatality due to safety hazard within our employees. * fatality due to safety hazard building (i.e. not suicide or self-inflicted) within building (i.e. not suicide or self-inflicted) • Encourage and provide seed • Encourage each country to adopt funding for staff-led Corporate a green initiative that can be Social Responsibility (CSR) implemented in Mapletree’s offices Local communities activities, awarding up to 16 or assets Supporting initiatives teams in at least 10 markets and projects that have where Mapletree has business a positive impact on presence communities.
97 SUSTAINABILITY report
Our material Targets and performance for FY20/21 Targets for FY21/22 and beyond Contribution sustainability matters to the SDGs Targets Performance : met : not met
• Reduce landlord energy • Reduce landlord energy consumption of all stabilised consumption of all stabilised Singapore Commercial sites8 Singapore Commercial sites8 in Energy by 1% from FY19/20’s baseline FY21/22 by 2.9%9 from FY19/20’s Improving our energy baseline performance and • Achieve Environmental efficiency. Management System Certification (ISO14001 certification) • By 2030, we aim to reduce the landlord energy consumption of Singapore Commercial sites8 by 30%, with reference to the energy consumption levels in FY09/10 • Maintain Building • Maintain BCA Green Mark ratings Construction Authority (BCA) for all properties that are Green Green Mark ratings and higher Mark rated for all properties that are Green Mark rated • Maintain landlord water • Maintain landlord water consumption of all stabilised consumption of all stabilised Singapore Commercial sites8 Singapore Commercial sites8 within Water within FY18/19’s baseline FY19/20’s baseline Managing our water resources in a sustainable manner. • Maintain zero incidences • Maintain zero incidences of of non-compliance with non-compliance with anti-corruption laws and anti-corruption laws and Anti-corruption regulations regulations We want to conduct our work with utmost integrity and accountability. • Achieve no material • Achieve no material incidences of incidences of non-compliance non-compliance with relevant laws with relevant laws and/or and/or regulations Compliance regulations with laws and regulations Achieving full regulatory compliance in everything we do.
98 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 ECONOMIC PERFORMANCE 103-1 103-2 103-3
Why is this important to us? Mapletree focuses on delivering value to our stakeholders in executing the key elements of our business model well. This ensures a continued sustainable stream of income and high profitability. In implementing a business strategy that combines the roles of real estate development, investment, capital and property management, Mapletree has generated consistent and good returns to our stakeholders, and established a track record for building award-winning development projects across various real estate classes.
Key policies Our targets
• Accounting Policy Current target Future targets • Group Investment FY20/21 Performance FY21/22 Management Manual* • Achieve sustainable • Achieve sustainable economic growth in order * Applies to all Investment economic growth to provide stable returns to our shareholders Teams in the Mapletree in order to provide FY23/24 Group, including Joint Venture stable returns to our arrangements with listed REITs, but excluding listed REITs and shareholders • Achieve sustainable economic performance in Private Funds Mapletree’s third Five-Year Plan by FY23/24: Returns - Average ROIE3: 10% to 15% - Average ROE4: 10% to 15% Earnings/Cash Flow - Average Recurring PATMI5: S$900 million to S$1 billion - Recycled Proceeds6,7: >S$20 billion Capital Management - Fee Income6: >S$2.5 billion - AUM Ratio: >3x - AUM: S$80 billion to S$90 billion
Highlights during the year Contribution to SDGs
8.6% 10.6% ROIE3 ROE4
S$692.7m S$3b AVERAGE RECYCLED PROCEEDS6,7 RECURRING PATMI5 (FROM FY19/20 TO FY20/21)
S$365.8m 2.4x S$66.3b FEE INCOME6 AUM RATIO AUM
99 SUSTAINABILITY report
MAPLETREE REAL ESTATE FORUM – OPPORTUNITIES AND CHALLENGES FOR THE REAL ESTATE SECTOR IN THE COVID-19 ERA
On 31 October 2020, the Group Mapletree) exchanged their views On the retail front, Ms Koh noted held the second edition of the on the challenges and opportunities the trend of retailers embracing Mapletree Real Estate Forum for various real estate asset classes. omni-channel retailing, building (Webinar), titled “Opportunities both physical and online presence to and Challenges for the Real Estate Despite the downward pressure on office tap a wider market and strengthen Sector in the Covid-19 Era”. The spaces in Singapore, Ms Wendy Koh brand awareness. Concurrently, the insightful panel session that was noted that the need for more safe surge in e-commerce has raised attended by over 360 participants distancing areas may coexist alongside the demand for industrial spaces painted a positive industry outlook for real estate planning. Mr Stephen such as warehouses and distribution amid the pandemic as the economy Bramley-Jackson agreed that offices centres. The rising demand for moves towards a digital one. are likely to remain in demand as perishables and essential supplies developers review fringe locations like pharmaceuticals has resulted in The annual forum draws industry with the working community needing more stockpiling and hence greater practitioners, subject experts and to minimise commute. Sharing from demand for more warehouse space. tertiary students to share trends the academia’s perspective, Assistant Data centres as an asset class is and cross-disciplinary knowledge, Professor Song Changcheng pointed gaining traction with investors with and is part of the Mapletree Real out that data analytics could help the Internet becoming a lifeline in Estate Programme at Singapore landlords and developers better Covid-19 times. Management University (SMU) understand space utilisation. launched in 2018 which comprises speaker events, the Mapletree Professorship in Real Estate, Mapletree Awards and study trip grants.
Moderated by Professor Melvyn Teo (Deputy Dean of Faculty and Research, SMU Lee Kong Chian School of Business), panellists, Mr Stephen Bramley-Jackson (Head of Real Estate Equity Research, Hong Kong and Shanghai Banking Corporation), SMU Assistant Professor of Finance Song Changcheng and Ms Wendy Koh (Group Chief Financial Officer,
DEVELOPING FOR SUCCESS, that drive long-term economic growth. • MLT, MCT and MNACT secured SUSTAINABLY During the year, Mapletree’s Singapore- S$928 million in green loans in listed REITs continued to make FY20/21. Sustainable finance headways in sustainable financing: Sustainable finance generally refers to In line with the Group’s commitment to the process of integrating ESG criteria • A total of S$450 million in sustainability, we will review and assess into financial services and business sustainability-linked loans and facilities the feasibility of participation in real estate decision-making, resulting in activities were obtained by MLT and MIT. benchmarking assessments in FY21/22.
100 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 ENERGY 103-1 103-2 103-3
Why is this important to us? The effects of climate change are far-reaching and pose adverse impacts on human health and civilisation. Mapletree recognises the key role it must play to reduce its energy consumption and associated greenhouse gases (GHG) emissions and enhance its efficiency.
Our targets Current target Future targets FY20/21 Performance FY21/22 and beyond • Reduce landlord energy consumption • Reduce landlord energy consumption of all stabilised Singapore of all stabilised Singapore Commercial Commercial sites8 in FY21/22 by 2.9%9 from FY19/20’s baseline sites8 by 1% from FY19/20’s baseline • Achieve Environmental Management System Certification (ISO14001 certification) • By 2030, we aim to reduce the landlord energy consumption of Singapore Commercial sites8 by 30%, with reference to the energy consumption levels in FY09/10 • Maintain BCA Green Mark ratings and • Maintain BCA Green Mark ratings for all properties that are higher for all properties that are Green Green Mark rated Mark rated
Highlights during the year • Operational control measures were put in place to ensure our building mechanical and electrical (M&E) systems were operated in the most optimal configurations. These were actively adapted to the changing conditions of reduced human traffic or increase in economic activities at our properties as Singapore responded to the Covid-19 measures. • Planned initiatives to upgrade and renew building systems and lightings continued. Opportunities to reconfigure systems for greater operational efficiencies were identified to secure further electricity savings in FY21/22. 70.59 0.029 Contribution to SDGs 2 2 kWh/m /yr tonnes CO2e/m /yr TOTAL LANDLORD ELECTRICITY TOTAL ENERGY INDIRECT INTENSITY IN FY20/21 (SCOPE 2) GHG EMISSIONS INTENSITY IN FY20/21
EMPOWERING SUSTAINABLE emissions are classified as Scope 2 70.59 kWh/m2/yr in FY20/21. Likewise, GROWTH (indirect) GHG emissions. these translate to a corresponding decrease in our energy indirect (Scope The Group’s main source of energy Energy and emissions 2) GHG emissions by 18.1% from 8,658 consumption comprises purchased performance tonnes carbon dioxide emissions (CO2e) electricity for our business operations – 302-1 302-3 305-2 305-4 in FY19/20 to 7,095 tonnes CO2e in property management and operations, FY20/21. These significant reductions CRE1 CRE3 lighting, air-conditioning and elevators. are due to active operational controls As diesel is only topped up for back- The total landlord electricity put in place in tandem with Covid-19 up purposes and makes up less than consumption of the four stable measures being implemented. In 1% of energy used throughout year, properties decreased by approximately addition, planned upgrades and it has been excluded from reporting. 15.9% from 20.65 million kWh in FY19/20 renewals continued in FY20/21 while As the electricity generated for use to 17.37 million kWh in FY20/21. The opportunities to reconfigure systems for at Mapletree properties were from electricity intensity decreased by 12.1% greater efficiencies were identified and external utility providers, these from 80.35 kWh/m2/yr in FY19/20 to implemented.
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25 23.30 100 Energy-saving initiatives 21.85 21.62 Mapletree acknowledges that there are 20.65 20 80 Electricity intensity 88.30 17.37 significant benefits and cost savings 83.41 82.50 that arise from a reduction in energy 80.35 (kWh/m usage and by improving energy 15 70.59 60 efficiency. Some of the measures we 2 have implemented at our properties 10 40 /yr)
include: (million kWh) 5 20 • Utilised LED lightings for all Electricity consumption 8 Singapore Commercial sites . 0 0 • Standardised building operation FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 hours and environmental settings to prevent over cooling and energy Electricity consumed ● Electricity intensity wastage. • Ensure effective and timely emissions intensity (tonnes CO 14,000 0.050 maintenance programmes for 12,120 Energy indirect (Scope 2) GHG maintaining equipment operational 12,000 e) 0.045 2 efficiency. 0.046 • Implemented green energy 10,000 9,271 9,064 8,658 0.040 solutions and technologies where 8,000 7,095 possible. 0.035 6,000 0.035 0.035 0.034 0.030 4,000 0.029 0.025 emissions (tonnes CO 2,000 2 e/m Energy indirect (Scope 2) GHG indirect Energy 0 0.020 2
FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 /yr)
Energy indirect (Scope 2) GHG emissions ● Energy indirect (Scope 2) GHG emissions intensity
Electricity consumption and energy indirect (Scope 2) GHG emissions* FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 Total electricity purchased for consumption (million kWh) 23.30 21.85 21.62 20.65 17.37 Total electricity intensity (kWh/m2/yr) 88.30 83.41 82.50 80.35 70.59
Total energy indirect (Scope 2) GHG emissions (tonnes CO2e) 12,120 9,271 9,064 8,658 7,095 Total energy indirect (Scope 2) GHG emissions intensity (tonnes 0.046 0.035 0.035 0.034 0.029 2 CO2e/m /yr)
* Data relates to the four stable properties in Singapore – (i) HFC, (ii) HFT, (iii) 20 HD, (iv) TPD Refer to Page 119 for methodology and definitions.
102 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Managing our environmental footprint To ensure that we meet our sustainability goals and targets, Mapletree will continue to pursue energy-saving initiatives at our properties. In the process of doing so, this will help reduce our GHG emissions and consequently, our overall carbon footprint.
The Group continually seeks opportunities to enhance energy efficiency through measures such as:
• Continuous renewal and retrofitting to capitalise on higher efficiency and high technology solutions to achieve greater efficiencies in our building systems. • Standardising building service operations, operation hours and environmental settings to prevent over-cooling. This will result in a lower energy wastage. In particular, we will continue to explore the use of advanced technologies to actively detect, optimise and reduce loading requirements or turn off M&E systems altogether, which will lead to a well-run building without sacrificing on tenant comfort. • Actively evaluating and implementing green energy solutions and technologies.
WATER 103-1 103-2 103-3
Why is this important to us? At Mapletree, we recognise the importance of prudent water management and do our utmost in working with stakeholders to reduce water consumption and improve the efficiency of water use. Where possible, Mapletree uses renewed or reclaimed water at our properties as part of our water-saving initiatives.
Our targets Current target Future targets FY20/21 Performance FY21/22 • Maintain landlord water consumption • Maintain FY21/22 landlord water consumption of all Singapore of all stabilised Singapore Commercial Commercial sites8 within FY19/20‘s baseline consumption sites8 within FY18/19’s baseline
Highlights during the year • Reduced human traffic in the mall and offices due to Covid-19 Government-imposed measures which resulted in substantial water savings. • Active intervention of building air-conditioning and other system configurations resulted in reduced overall water consumption. • Constant optimisation of building systems that led to lower water discharge, wastage, and consumption.
Contribution to SDGs 133,727m3 43.6% TOTAL LANDLORD WATER DECREASE IN LANDLORD WATER WITHDRAWAL IN FY20/21 WITHDRAWAL FROM FY18/19
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WATER CONSERVATION Water performance AND MANAGEMENT 303-3 CRE2 Interactions with water The total landlord water withdrawal of the four stable properties decreased by 303-1 303-2 43.6% from 237,146m3 in FY18/19 to 133,727m3 in FY20/21, of which 45,193m3 comprises NEWater used at HFC. The water intensity of the four stable sites Water at Mapletree’s properties in decreased from 0.86m3/m2/yr in FY19/20 to 0.54m3/m2/yr in FY20/21. Singapore is mainly provided by PUB, Singapore’s water agency. Water supply comprises the “Four National 300,000 271,741 1.20 Taps” – water from local catchments, 255,229 250,000 1.03 237,146 1.00 imported water, highly purified 0.97 220,137 Water use intensity )
reclaimed water known as NEWater 3 0.90
0.86 (m and desalinated water. 200,000 0.80 3 133,727 /m
150,000 0.60 2 Water is essential to our business 0.54 /yr) operations – particularly in regulating 100,000 0.40
building temperature and keeping withdrawal (m
our buildings cool for occupants and volume of water Total 50,000 0.20 all stakeholders. For most buildings, the air-conditioning systems rely 0 0.00 on evaporative cooling towers that FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 eject heat from the building through Total water withdrawal ● Water intensity evaporation of water. As our make- NEWater withdrawal up water needs for cooling towers is approximately 40% to 50% of the building’s total water usage, we have Water withdrawal* identified this as a significant area for us FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 to minimise our water-related impacts. Total volume of water 271,741 255,229 237,146 220,137 133,727 withdrawal (m3) From a value chain perspective, we also work closely with our tenants to Domestic (m3) 212,747 198,739 182,262 155,757 88,534 steward water as a shared resource and NEWater (m3) 58,994 56,490 54,884 64,380 45,193 regularly engage them on managing Total water use intensity 1.03 0.97 0.90 0.86 0.54 their water-related impacts. For (m3/m2/yr) instance, promoting water conservation at the restrooms and pantries as well * Data relates to the four stable properties in Singapore – (i) HFC, (ii) HFT, (iii) 20 HD, (iv) TPD as when fit-out, addition and alteration Refer to Page 119 for methodology and definitions works are performed. Guidelines on the use of PUB Water Efficiency Labelling Scheme (WELS) sanitary fittings for tenant’s fit-out work are also provided in the Fit-out Manual.
All effluents are discharged in line with regulatory requirements.
104 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Water-saving initiatives Focus areas include: of building system operational Water-saving measures are primarily schedules as well as shutting down established through the design, • Use of non-potable NEWater for of systems when they are not in use. development and implementation cooling towers and other non- • Actively exploring the use of phases. However, with improvements in potable uses where possible and technologies to detect and report our operational processes, we can also practical. faulty sanitary fittings. reap further efficiencies and savings • Adjusting the operational • Continued use of PUB’s WELS in water consumption. Sourcing and parameters of water-related systems and other water-saving sanitary executing water saving opportunities to minimise water consumption, fittings and accessories for toilets in will remain a key part of Mapletree’s losses and wastage. To this end, Mapletree’s buildings aligned with water-saving strategy. Mapletree actively pursues the their respective country-specific standardisation and optimisation water-efficiency labelling schemes.
EXCELLENCE IN ENVIRONMENTAL RESPONSIBILITY Promoting sustainable waste management practices We are committed towards prudent waste management at our properties. Wherever possible, we encourage our tenants and visitors to prioritise sustainable methods of waste disposal such as recycling. Recycling bins are readily accessible at prominent and high traffic areas throughout our properties. In FY20/21, we collected 1,203 tonnes of waste at HFC, HFT and 20 HD, of which 102 tonnes was recycled.
Waste collection and recycling* FY18/19 FY19/20 FY20/21 Total waste collected (tonnes) 3,035 3,172 1,203 Total waste recycled (tonnes) 172 193 102 Total recycling rate (%)^ 5.7 6.1 8.5
* Data relates to the stable properties in Singapore – (i) HFC, (ii) HFT, (iii) 20 HD, excluding TPD ^ Recycling rate is derived by taking total waste recycled divided by total waste collected
Greening buildings and building green CRE8
Mapletree is committed to building and investing in properties with innovative and functional concepts. These include integrating sustainability into architectural design, building details, and construction as well as maintenance activities. In Singapore, we continue to support the BCA’s Green Building Masterplan to shape a safe, high quality, sustainable and friendly built environment. Over the years, the Group has obtained many Green Mark Awards by BCA and the Leadership in Energy and Environmental Design (LEED) by U.S. Green Building Council certifications which demonstrate our best-in-class building strategies and practices.
BCA Green Mark Awards Property Entity Award Singapore 1 and 1A Depot Close MIT Platinum HarbourFront Centre Mapletree Platinum Mapletree Anson MCT Platinum Mapletree Benoi Logistics Hub MLT Platinum, Super Low Energy Building Mapletree Business City I MCT Platinum Mapletree Business City II MCT Platinum Mapletree Business City II MCT Platinum (Universal Design Mark)
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BCA Green Mark Awards Property Entity Award Singapore St James Power Station Mapletree Platinum VivoCity MCT Platinum 26A Ayer Rajah Crescent MIT BCA-IMDA Green Mark for Existing Data Centre v1.1 Bank of America Merrill Lynch HarbourFront MCT GoldPLUS The Reef at King’s Dock Mapletree GoldPLUS mTower and Alexandra Retail Centre MCT GoldPLUS The Strategy MIT GoldPLUS 18 Tai Seng MIT Gold 30A Kallang Place MIT Gold 5B Toh Guan Road East MLT Gold 978 & 988 Toa Payoh North MIT Gold HarbourFront Towers One and Two Mapletree Gold K&S Corporate Headquarters MIT Gold The Signature MIT Gold
LEED Certifications Property Entity Certification Singapore 26A Ayer Rajah Crescent MIT LEED Core and Shell Gold Level Mapletree Business City II MCT LEED Gold STT Tai Seng 1 MIT LEED Gold for Level 1,3,4,5 and 6 Hong Kong SAR Mapletree Logistics Hub Tsing Yi MLT LEED Core and Shell Gold Level India Global Technology Park Phase 1 Mapletree LEED Gold Global Technology Park Phase 2 Mapletree LEED Gold Ireland The Sorting Office Mapletree LEED Platinum
BREEAM Certifications Property Entity Certification Poland West Station II Mapletree BREEAM Certification 2019 (Excellent)
106 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 TALENT RETENTION 103-1 103-2 103-3
Why is this important to us? We firmly believe that a successful company is the result of its employees. As an employer, it is important to provide an enabling work environment for employees to excel in. Fair employment practices remain high on our list of sustainability priorities. Mapletree aims to continue attracting, developing and retaining our employees while helping every individual maximise their potential and continue to create value through the things that they do.
Key policies Our targets Current target Future targets Group-wide • Compensation, Benefits FY20/21 Performance FY21/22 and Leave Policy • Fair employment practices • Fair employment practices by ensuring • Learning and by ensuring that all that all individuals receive the same Development Policy individuals receive the same opportunities for hiring, advancement and • Performance Management opportunities for hiring, benefits Policy advancement and benefits • Resourcing and Employment Policy • Maintain diverse and relevant • Maintain diverse and relevant learning • Safety and Health Policy learning and professional and professional development • Talent Management Policy development programmes programmes • Overseas Business Travel • Hold employee town hall • Hold employee town hall meetings at least and International meetings once a year once a year Assignment Policy
Highlights during the year • Mapletree Immersion Programme: Virtual sessions for new colleagues across global offices. • Mapletree Recreational Club Programmes: Giveaways to employees (e.g. health snack pack, welfare pack, etc.) and weekly sports and games (reintroduced in Singapore’s Phase 3 Safe Nation Re-opening). • Wellness@Mapletree: Virtual workouts with employees (e.g. zumba, high-intensity interval training, stretch-and-rejuvenate, etc.), and wellness workshops covering a range of topics (e.g. Beating Burnout, Ergonomics, Nutrition, etc.). • Learning and development: Virtual trainings and workshops, and availability of e-learning resources (e.g. GlobeSmart, LinkedIn Learning, etc.) for all employees. • Learning goes virtual in Mapletree: Collaboration with Singapore Police Force’s Centre for Protective Security to conduct a webinar on security services for Singapore Mapletree staff.
Contribution to SDGs 1,030 59% 1% FULL-TIME, PERMANENT FEMALE EMPLOYEES AVERAGE TURNOVER RATE EMPLOYEES10 IN FY20/21 IN FY20/21 IN FY20/21
100% 2,025 91 EMPLOYEES WHO HAVE TRAINING PROGRAMMES EMPLOYEES PARTICIPATED RECEIVED PERFORMANCE ATTENDED BY EMPLOYEES IN VIRTUAL IMMERSION AND CAREER DEVELOPMENT IN FY20/21 PROGRAMMES REVIEWS IN FY20/21 399% FROM FY19/20
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OUR PEOPLE ARE THE ROOTS OF MAPLETREE Profile of our workforce 102-8
Our diverse talent pool continues to grow in FY20/21, comprising an average of 1,030 employees10 who are employed on a full-time, permanent basis. This is an increase of about 1% from FY19/20’s headcount. The distribution by gender and age group remained consistent with prior years.
Total employees by gender and age group (%)* Male Female Total
FY20/21 3.1 28.5 9.2 10.1 42.6 6.6 419 (41%) 611 (59%) 1,030 (100%)
FY19/20 3.2 29.3 8.6 11.5 41.8 5.6 417 (41%) 598 (59%) 1,015 (100%)
FY18/19 3.7 29.1 8.2 12.4 41.3 5.3 398 (41%) 572 (59%) 970 (100%)
FY17/18 4.1 28.7 8.2 13.0 41.3 4.7 374 (41%) 538 (59%) 912 (100%)
Male, <30 years old Female, <30 years old Male, 30 to 50 years old Female, 30 to 50 years old Male, >50 years old Female, >50 years old * Due to rounding, percentages expressed may not precisely reflect the absolute figures.
NURTURING OUR PEOPLE WITH Overall new hires and turnover rate (%) THE RIGHT ENVIRONMENT FY17/18 FY18/19 FY19/20 FY20/21 New hires and turnover New hires rate 1 2 1 1 401-1 Turnover rate 1 1 1 1
Mapletree’s human resource strategies Refer to Page 119 for methodology and definitions help foster a progressive workplace – one where every employee feels support our employees during these trying times, we have provided a Covid-19 valued, respected and empowered. We subsidy of S$500 or equivalent to all employees worldwide in November 2020. have persevered through the Covid-19 crisis, and emerged stronger while PROVIDING THE RIGHT SUPPORT TO GROW TOGETHER doing what we can to ensure that we retain our employees. While hiring Talent development activities have slowed down in the early 404-2 months of FY20/21 due to Covid-19, we have seen an increase in recruitment The Group places emphasis on upskilling our employees by enhancing their on the whole and are pleased to report competencies, building motivation and self-efficacy, which in turn leads to growth that our workforce remained stable, and success in the business. Despite the pandemic, our talent development with a new hire rate and turnover programmes continue unabated by our flexible working arrangements and safe rate of 1% each. We recognise the management measures. In fact, the shift to utilise off-site and virtual capabilities importance of employee retention, enabled us to step up learning and development opportunities for our employees, in particular, how continuity builds as we explored new ways of virtual collaboration and enhanced access to momentum of our corporate pulse to e-learning resources for employees to gain new skills and knowledge on-the-go. provide a competitive edge to propel We introduced access to GlobeSmart, an online learning platform for employees to the company forward. As a gesture to access information and obtain advice on effective cross-cultural collaboration.
108 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 We also introduced LinkedIn Learning, which comprises a digital library of over 16,000 courses covering a wide range of topics for our employees.
Aside from these e-learning resources, our dedicated training programmes in FY20/21 more than doubled that of FY19/20 – a total of 2,025 training programmes were provided, garnering more than 14,200 counts of participation. These platforms enable us to achieve our target of maintaining diverse and relevant learning and professional development programmes for employees.
Breakdown of training programmes in FY20/21 by categories (%)
9.8
7.2 2,025 6.4 Programmes 6.9 conducted 3.8 0.6 65.3
FY20/21 Training Categories No. of No. of Examples of Programmes Programmes Participants Finance 198 1,224 • Ethics Update for Professional Accountants in Business • Understanding Delegation of Authority and Procurement Building and Safety 146 837 • Building Management System Training • Company Emergency Response Team (CERT) First Aid • Chiller System Training • Electrical System Training • Manage Workplace Safety and Health System • Outcome-based Contracting for Security Services Information and 130 5,374 • IT Security Awareness Series Technology • Training on tools (e.g. SAP, Vendor Invoice Management, etc.) Real Estate 140 1,533 • Mapletree Investments 101 and 102 • Market Updates • Mapletree Real Estate Forum: Opportunities and Challenges for the Real Estate Sector in the Covid-19 Era Personal Effectiveness 77 673 • Diversity and Inclusion • Business Communication and Presentation Business Continuity 12 90 • Safe Management Officer Training Others 1,322 4,488 • Functional training (e.g. Legal, Project Management, Risk Management, Human Resources, etc.) • Mapletree Immersion Programme
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Career development framework. Thereafter, performance In addition, Mapletree organised a total 404-3 feedback is provided based on targets of two town hall sessions in FY20/21. in four key areas – domain knowledge, The first, held in June 2020 was an The e-Performance Appraisal system, a business networks and innovation, annual session on the Group’s financial performance appraisal system deployed collaboration and communications as performance while the second, held Group-wide electronically, provides us well as operational excellence. in November 2020, sought to address with the platform to enable deeper, the results from the EES as well as more meaningful career development Employee engagement provided employees with an update conversations with all our employees. We strive to ensure that every on Mapletree’s performance in light The system aligns evaluation practices employee’s voice is heard and that the of Covid-19. across countries, effectively tracks key company has support channels in place performance indicators and measures for employees to provide valuable our employees’ personal achievements. feedback and raise their grievances should they arise. In FY20/21, Annually, all our employees are Mapletree launched the Group-wide assessed against a core competencies Employee Engagement Survey (EES).
EMPLOYEE ENGAGEMENT SURVEY The EES was conducted for employees Group-wide in August 2020 to gauge their engagement levels and perceptions relating to a variety of areas. The EES is a useful tool for the management to assess employees’ needs, set future goals and take systematic actions to create value for employees. In 2020, the EES response rate was 97%, an increase of 3% from the last survey conducted in 2017, with encouraging improvement in the scores across all survey categories.
Table 1: Top and bottom five scoring items Top Five Scoring Items Bottom Five Scoring Items I have confidence in the future of the company*. Within the company, there is effective 90% 63% collaboration between departments. The company keeps employees informed of At this company, people are rewarded according 90% Mapletree’s performance*. 62% to their performance. I have confidence in the senior leadership team to I rarely think about looking for a new job with 86% make the right decisions for the company. 61% another company. My manager encourages collaboration within my There are effective communication channels in the 85% team. 60% company for me to provide feedback, opinions and ideas^. I feel the changes at the company level are There are internal opportunities within the 85% managed well. 60% Mapletree Group to meet my career objectives^.
* Nine out of 10 employees have confidence in the future of the company and agree that the company keeps them informed of Mapletree’s performance. ^ On the other hand, only six out of 10 employees perceive effective communication channels in the company and availability of internal opportunities to meet their career objectives.
Mapletree values all feedback received from the EES 2020 and has since convened small focus group discussions to ideate and garner support for action plans to improve the way the Group works. Mapletree is presently reviewing the areas identified for improvement and will embark on more engagement initiatives to address these areas in time.
110 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 HEALTH AND SAFETY 103-1 103-2 103-3
Why is this important to us? Safeguarding the health and safety of employees and stakeholders at our properties remains our top priority. We believe that maintaining a healthy and safe working environment for employees and stakeholders at our properties would lead to greater morale, efficiency and increases confidence in Mapletree.
Key policies Our targets Current target Future targets Group-wide • Safety and Health Policy FY20/21 Performance FY21/22 • Pandemic Disease Plan • Zero incidences resulting • Zero incidences resulting in employee* in employee* permanent permanent disability or fatality disability or fatality * scoped to Singapore staff only * scoped to Singapore staff only • Zero incidences resulting • Zero incidences resulting in fatalities* in fatalities* for TPSPs and for TPSPs and tenants tenants * fatality due to safety hazard within building * fatality due to safety hazard (i.e. not suicide or self-inflicted) within building (i.e. not suicide or self-inflicted)
Highlights during the year • Wellness@Mapletree: Virtual workouts with employees (e.g. zumba, high-intensity interval training, stretch-and-rejuvenate, etc.), and wellness workshops covering a range of topics (e.g. Beating Burnout, Ergonomics, Nutrition, etc.). • Precautionary measures taken in light of Covid-19 • Safety-related training programmes 837 0 Contribution to SDGs EMPLOYEES PARTICIPATED IN TOTAL NUMBER OF ALL BUILDING AND SAFETY TRAINING WORK-RELATED FATALITIES PROGRAMMES IN FY20/21 IN FY20/21 0 0.00 TOTAL NUMBER OF TOTAL RECORDABLE RECORDABLE WORK-RELATED WORK-RELATED INJURY RATE INJURIES IN FY20/21 IN FY20/21
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BUILDING A PLACE WHERE PREVENTION IS BETTER as possible by Mapletree’s GDM EMPLOYEES CAN CALL HOME THAN CURE department whenever a new TPSP is pre-qualified and engaged. Promotion of employee Hazard identification and well-being risk assessment Our standard contract terms determine 403-6 403-2 403-7 the safety accountabilities expected of our main contractors. For instance, Mapletree aims to provide a work We adopt a risk-based approach to main contractors are required to comply environment that is not only safe for prevent and mitigate potential health with all prevailing laws and regulations. employees but contributes to their and safety impacts that are linked to They are also required to provide health and general well-being. We our operations by way of business protective apparel and safety devices. understand that Covid-19 is a trying relationships with stakeholders such Prior to the commencement of a new time for our employees, as changes as tenants and TPSPs. In FY20/21, project, they are required to submit a to the way we work may lead to some we adopted a highly collaborative Risk Management Plan for review. experiencing the blurring of boundaries approach with all stakeholders between the workplace and home. across all properties and facilities to In addition, onsite safety audits are To that end, we have increased implement safe management practices conducted on a regular basis to ensure emphasis on our employees’ physical in relation to Covid-19. compliance. and mental well-being by giving away healthy snacks and welfare packs, Our Fit-out Manual, which is provided EVERY LIFE MATTERS AT and by arranging for courses such as to tenants, includes safety rules and MAPLETREE Beating Burnout, and regular mass guidelines that they must adhere virtual workouts including zumba, to. Clauses are continually being Occupational health and high-intensity interval training, etc. – refined and expanded to include safety (OHS) performance for our employees to participate from more guidelines on environmental 403-5 403-9 their homes. These activities also help and social aspects. Health and safety in fostering team bonding. are also included as part of our Our Employee Handbook sets out the screening criteria and process before Group-wide Safety and Health Policy An increasing focus on health and engaging TPSPs. Subcontracted which guides all employees on safe safety is supplemented by our health works such as construction are only work practices, emergency response screening programme provided for awarded to qualified and competent and timely reporting of accidents and employees. In addition, employment TPSPs via a risk assessment scheme. hazardous situations. benefits such as insurance and medical The assessment includes, but is not benefits are regularly reviewed to limited to, safety tracking records, ISO The Group invests in building a culture ensure that they are updated and and OHSAS certifications. In 2021, focused on environment, health and relevant to employees’ needs. the Group will obtain ISO 45001 safety (EHS) by equipping employees certification. Due diligence and other with the necessary knowledge, skills and safety measures are initiated as early capabilities. In FY20/21, 837 employees
Work-related injuries* for employees FY19/20 FY20/21 Number (and rate*) of fatalities as a result of work-related injuries 0 (0.00) 0 (0.00) Number (and rate*) of high-consequence work-related injuries 0 (0.00) 0 (0.00) (excluding fatalities) Number (and rate*) of recordable work-related injuries 1 (0.45) 0 (0.00)
* Rates expressed per million man-hours worked. Refer to Page 119 for methodology and definitions
112 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 participated in training programmes Emergency preparedness and In view of Covid-19, the Group such as CERT First Aid, Fire Safety, response developed a Pandemic Disease Plan Managing Work at Heights, Building which provides the guidelines to 403-7 Maintenance Management, etc. safeguard and de-risk operations during As part of Mapletree’s OHS system, a contagious medical situation. This Our incident reporting protocol allows emergency response procedures Plan seeks to restore and maintain timely investigation and prudent are in place and these are regularly Mapletree’s activities to the pre-defined incident management in the event of communicated to all relevant level of business continuity following incidents at any of Mapletree’s premises stakeholders, taking into account their an infectious disease crisis, establish and sites. We are pleased to report needs, capabilities and involvement preventive strategies to control disease that there were zero fatalities and zero in carrying out the response. Selected spread among staff as well as train high-consequence work-related injuries Mapletree employees undergo specific and educate staff on policies and among employees during FY20/21. training such as first-aid and fire-fighting. procedures.
SAFEGUARDING THE HEALTH AND SAFETY OF OUR STAKEHOLDERS AMID COVID-19
Since the outbreak of the virus, • Family care leave arrangements For tenants and visitors: we have worked closely with the are available when employees • Increased frequency of cleaning authorities and undertook all accompany their family members and disinfection activities, and necessary precautionary measures for Covid-19 vaccination. deep-cleaning of areas when aligned with escalating scenarios to • Ensured ample supply of masks suspected cases were reported minimise community transmission. for employees and provided at Mapletree’s premises. These measures are progressively cleaning equipment and hand • Implemented contact tracing strengthened in line with the sanitisers for staff. efforts at all entrances to our national risk assessment levels • Maintained close communication, properties. and Government regulations. providing health advisories and • Increased availability of hand updates on the situation. sanitisers within properties. Some of the measures implemented • Continued with split-team • Enforced social distancing in are as follows: arrangements and safe distancing the form of tape markings for all employees at various work which were put up at relevant For employees: locations. common areas. • Organised a webinar on • Complied with all national measures • Maintained close communication Covid-19 vaccines with Fullerton for affected employees who were with all tenants, providing health Healthcare Group to highlight issued with a Leave of Absence or advisories, mitigation measures the importance of getting Stay-Home Notice. and cooperation. vaccinated against the virus, and • Safe distancing measures in office • Posters and regular address some of the common meeting rooms, pantries and announcements in place to misconceptions surrounding the common areas. enhance awareness of visitors vaccines. • Supported efforts in contact tracing. to practise good hygiene, • Supported the Government’s • Increased frequency of cleaning and social distancing and wearing Covid-19 vaccination drive by disinfection activities, and deep- of masks. providing paid leave on each cleaning of areas when suspected Covid-19 vaccination day as well cases were reported at Mapletree’s as an additional paid two-day premises. medical leave for side-effects per • Provided personal protective dose as needed. equipment such as masks, gloves and gowns for frontline employees.
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LOCAL COMMUNITIES 103-1 103-2 103-3
Why is this important to us? At Mapletree, we incorporate sustainable practices in our operations and endeavour to generate positive outcomes in the communities we operate in. The Group is committed to fostering long-term partnerships with stakeholders and beneficiaries with sustained impact.
Key policies Our targets Current target Future targets Group-wide • Mapletree CSR Framework FY20/21 Performance FY21/22 • Encourage and provide • Encourage each country to adopt a green seed funding for staff-led initiative that can be implemented in CSR activities, awarding up Mapletree’s offices or assets to 16 teams in at least 10 markets where Mapletree has business presence
Highlights during the year • Arts: Mapletree Arts in the City on Air, Mapletree-TENG Academy Scholarships, School of the Arts, Singapore (SOTA) Primary 6 Art Competition, Epigram Books Fiction Prize, Mapletree-NTU CCA Singapore Public Art Education Programme, etc. • Environment: Support for Nature Society (Singapore) (NSS) programmes, green building initiatives, etc. • Healthcare: Sponsorship to National University Hospital (NUH) Management & Innovation for Longevity in Elderly Surgical (MILES) programme, Covid-19 support for distribution of disposable masks to beneficiaries, etc. • Education: Mapletree Traineeship Programme (M-TRAIN), Mapletree Academic Achievement Programme (MAAP), Yellow Ribbon Foundation (YRF) Mapletree Skills Training Assistance to Restart (STAR) Bursary, Mapletree-SCCCI River Hongbao Hackathon, Mapletree x NP Hack, The Mapletree Challenge, Mapletree Real Estate Programme etc.
Contribution to SDGs ~S$3.7m S$70,000 COMMITTED TO CSR CAUSES SEED FUNDING PROVIDED IN FY20/21 AS PART OF MAPLETREE’S STAFF CSR PROGRAMME FOR FY20/21
EMPOWERING INDIVIDUALS, communities through the arts and A dedicated five-member CSR ENRICHING COMMUNITIES environmental sustainability. Our Board Committee provides strategic initiatives are based on definable social oversight of the Group’s CSR efforts. Our CSR framework outcomes, long-term engagement and The CSR Board Committee comprises 413-1 staff volunteerism opportunities. Mapletree’s Chairman and senior management as well as two Board Mapletree’s Group-wide CSR framework Our CSR commitment is closely aligned representatives from the REITs, is guided by two broad objectives to the Group’s business performance. private platforms or private funds 5 of empowering individuals through For every S$500 million of PATMI , or (rotated on a three-year basis). supporting educational and healthcare part thereof, S$1 million is set aside initiatives, as well as enriching annually to fund CSR programmes.
114 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 SUPPORTING OUR STAKEHOLDERS AND COMMUNITIES AMID COVID-19
Singapore As part of the Group’s CSR initiative to help the employees of our tenants and service providers who were placed on no-pay leave due to Covid-19, the Group launched the Mapletree Community Sharing Fund in April 2020. The fund combined the Solidarity Payments from more than 100 Mapletree management and staff in Singapore on a voluntary basis, raising over S$85,000 for the fund.
In 2020, more than 270 applicants who are employees of our tenants and service providers at MBC, Alexandra Retail Centre, VivoCity, Singapore as well as retail tenants at tribute to the efforts of frontline To date, the total commitment for HFC, HFT and 18 Tai Seng received workers through a variety of MAITC on Air is S$85,000. the one-off cash grant of S$200. performances ranging from music to We continued our support through dance every Thursday and Saturday The Group donated S$10,000 a second payout for 142 applicants on Mapletree’s YouTube channel. to Ngee Ann Polytechnic (NP)’s who were still placed on no-pay With MAITC on Air receiving positive Covid-19 Support Fund for students leave by their companies. feedback for the first series of 19 who required financial assistance performances, Mapletree committed due to the global pandemic as well Mapletree Arts in the City (MAITC) an additional S$45,000 to extend the as an additional commitment of on Air was launched in May 2020, online performances, and continue S$40,000 to support similar funds of to liven up the “circuit breaker” to support local artists by presenting other Institutions of Higher Learning period in Singapore and to pay new arts performances every month. in Singapore.
MAPLETREE TRAINEESHIP Trainees will have the opportunity to Technology, Investor Relations, PROGRAMME (M-TRAIN) gain relevant skills and knowledge Leasing and Marketing, Property LAUNCHED TO SUPPORT in the real estate industry, as well as Management and others; while the practical and hands-on work experience ‘Study’ component allows trainees CHALLENGING EMPLOYMENT work while attending classroom to attend classes by Mapletree’s CLIMATE trainings conducted by faculty members senior leaders and curated real from SMU and senior leaders from estate courses from the SMU Real The Group launched a 12-month Mapletree. Estate Track such as Introduction to work-study full time programme in Real Estate Economics, Law of Real October 2020, known as M-TRAIN. The ‘Work’ component provides Estate and Real Estate Investments The programme, which is initiated trainees with the opportunity to work and Finance modules. and fully funded by Mapletree, will on projects with the relevant business employ up to 30 trainees to support functions in Mapletree, including fresh graduates who face difficulty in Finance, Data Analytics, Human securing employment in Singapore. Resource, Information Systems and
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Key programmes during the year In FY20/21, we continued to make headway in our CSR programmes, building on existing partnerships and forging new ones.
ARTS EDUCATION
Mapletree Arts in the City on Air: Launched the Endowed Mapletree bursaries at all six online arts performance series with S$40,000 and universities*: NUS (2012), NTU (2012), SMU (2013), committed additional S$45,000 to continue the SUTD (2013), SIT (2014) and SUSS (2016). monthly series from August 2020 to July 2021. * Indicates the year in which the bursaries were established.
SOTA Primary 6 Art Competition: Sponsorship Mapletree Traineeship Programme (M-TRAIN): of S$24,000 per year for the annual nationwide Committed S$1 million for M-TRAIN, a 12-month competition to raise awareness and promote visual work-study full-time programme that provides trainees arts, as well as identify and acknowledge young talents with the opportunity to gain insights into the real (2021 to 2022). estate industry.
Epigram Books Fiction Prize: Sponsorship of S$8,000 Mapletree Academic Achievement Programme to promote contemporary creative writing and rewards (MAAP): Renewal and expansion with support of excellence in literature (since 2017). S$32,500 under MAAP as a five-year sponsorship for graduation prizes under NP, Singapore Polytechnic Mapletree-TENG Academy Scholarships: and Temasek Polytechnic, starting from AY2020/2021 Sponsorship of S$45,000 for four two-year scholarships to AY2024/2025. in 2021. Mapletree x NP Hack 2021: Committed S$25,000 to the hackathon for NP students which seeks to develop technical and soft skills through design-thinking approaches.
Mapletree Real Estate Programme at SMU: Committed S$2.5 million to expand the programme which started in 2018. Jointly organised the Mapletree Annual Lecture (30 October 2020) and Mapletree Real Estate Forum (31 March 2021).
Culture City. Culture Scape.: Launch of an art book Mapletree-SCCCI River Hongbao Hackathon which is part of the Mapletree-NTU CCA Singapore 2021: Committed S$30,000 to the annual youth Public Art Education Programme that started in entrepreneurship competition for tertiary students. October 2017. Winning teams received seed money to display and sell their products online at River Hongbao 2021.
Mapletree Laptop Donation: 15 upcycled laptops which were refurbished with a new hard disk and Microsoft Office Suite were donated to the Bukit Batok Community Club in Singapore to support children from low-income families.
116 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 EDUCATION HEALTHCARE
The Mapletree Challenge: Organised the seven- NUH MILES Patient Programme: Sponsorship of month challenge for students from Singapore S$20,000 to the programme, which aims to enhance Institute of Technology. The challenge comprised the perioperative management of elderly patients. masterclasses, mentorships and an innovation and entrepreneurship forum with industry professionals. Covid-19 support: Committed more than S$1.9 million to the global distribution of disposable Yellow Ribbon Foundation (YRF) Mapletree Skills masks to beneficiaries across markets in which the Training Assistance to Restart (STAR) Bursary: Group operates in, to help alleviate the mask Commitment of S$397,800 to sponsor tertiary studies shortage situation. for up to nine recipients.
Continued support on design partnership project with SUTD: Supported students with a fund of S$42,000 to create architectural works or furniture COMMUNITY by re-using planks from the Sky Park at VivoCity, Singapore. Mapletree Staff CSR Programme FY20/21: Awarded seed funding of S$5,000 to each of the 14 teams from Singapore, Australia, China, Hong Kong SAR, Japan, Poland, the Netherlands, ENVIRONMENT the United States and Vietnam. Three India teams were awarded seed funding but tapped on their respective entity’s budget for CSR as mandated by Support for Nature Society (Singapore) India Company Act. Programmes: Sponsorship of S$35,000 for the 36th Singapore Bird Race and other outreach activities.
Green building initiatives: Achieved and maintained BCA Green Mark Awards and LEED certifications which demonstrate best-in-class building strategies and practices.
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ANTI-CORRUPTION AND COMPLIANCE 103-1 103-2 103-3
Why is this important to us? Corruption is a business risk recognised as a major threat that impacts all aspects of society. It undermines the global effort towards sustainable development, disrupt markets and may cause misallocation of resources within communities. It is thus imperative that we pursue good governance and leadership in stemming out corruption in all its forms.
Compliance cuts across all our sustainability commitments – from human resources to health, safety and environment – enabling us to build better relationships with our stakeholders and a more sustainable business.
Key policies Our targets Current target Future targets Group-wide • Anti-money laundering FY20/21 Performance FY21/22 • Code of Conduct • Maintain zero incidences of • Maintain zero incidences of • Confidentiality of non-compliance with anti- non-compliance with anti-corruption Information corruption laws and regulations laws and regulations • Contract Review • Enterprise Risk • Achieve no material incidences • Achieve no material incidences of Management Framework of non-compliance with relevant non-compliance with relevant laws • Gifts Policy laws and/or regulations and/or regulations • Personal Data Policy • Securities Trading • Whistleblowing Policy
Highlights during the year Contribution to SDGs 0 0 INCIDENCES OF CORRUPTION MATERIAL INCIDENCES OF NON-COMPLIANCE WITH 205-3 RELEVANT LAWS & REGULATIONS 307-1 416-2 417-2 417-3 419-1
GOOD CORPORATE GOVERNANCE Mapletree has voluntarily subscribed to made available on the intranet and are IS THE CORNERSTONE OF OUR some of the core principles set out in the accessible to all employees. Such policies SUCCESS Code of Corporate Governance issued and procedures include anti-money by the Monetary Authority of Singapore. laundering checks on tenants, securities 102-16 More information about the Group’s trading, code of conduct, whistleblowing, Good corporate governance underpins corporate governance can be found in contract review as well as anti-corruption. the Group’s long-term success and pages 125 to 129 of the annual report. To ensure compliance awareness ensures investor confidence and continues throughout the year, relevant business integrity. The Group is To foster a culture of responsible and employees are kept up-to-date with the committed to conducting its business ethical behaviour within the Group, we recent developments and changes of the in accordance with all applicable laws have a comprehensive set of policies applicable laws and regulations through and regulations, in an ethical manner. and procedures in place. The policies are training and communication.
118 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 To ensure the effectiveness of risk Compliance with laws and GHG emissions management, control and governance regulations • GHG emissions are reported in line processes, we have internal audit In FY20/21, the Group maintained zero with the guidance from the GHG processes in place. Cases of threatened incidences of non-compliance with anti- Protocol Corporate Accounting or pending litigation are reported corruption laws and regulations. There and Reporting Standard. The immediately to the CEO of the Business were also zero material incidences of operational control approach is Unit, the GCCO and Group General non-compliance with other relevant applied, and Mapletree accounts Counsel for timely resolution. laws and/or regulations. for GHG emissions from operations over which it or its subsidiaries has Securities trading by employees SUPPLEMENTARY INFORMATION operational control. Mapletree has an internal policy on • Energy indirect (Scope 2) GHG prudent trading of Mapletree-listed Stakeholder engagement emissions intensity is derived by securities and employees are apprised 102-40 102-42 102-43 102-44 taking total energy indirect (Scope of insider trading laws regularly. 103-1 103-3 2) GHG emissions divided by the Reminders are issued prior to the GFA less vacant lettable area for the start of trading “blackout periods” An effective sustainability four stable properties. and employees are required to give strategy involves understanding • A location-based method is pre-trading notifications before any our stakeholders’ concerns and adopted to reflect the average dealings in Mapletree-listed securities. expectations. Regular stakeholder emissions intensity of Singapore’s engagement helps us identify, grid. The emission factors used Code of conduct understand and communicate the are obtained from the Singapore Our internal code on General Conduct topics which are of utmost importance Energy Statistics published by the and Discipline sets out the framework to our stakeholders and in turn enhance Energy Market Authority. We adopt and guidelines for employees on our performance management. the latest available Grid Emission ethical values such as honesty and Factor calculated using the Average responsibility, as well as appropriate The table on the next page shows Operating Margin method for the conduct for our employees. Mapletree’s stakeholder engagement reporting period. approach throughout the year and Whistleblowing the topics of interest to our key Water Our Whistleblowing Policy further stakeholders. These are key stakeholder • Water withdrawal is defined as provides an avenue for employees groups which either have a significant the total water drawn for use. At and external parties to raise concerns impact on, or are significantly impacted Mapletree, this includes third-party about illegal, unethical or otherwise by our sustainability performance. water (municipal water and NEWater inappropriate behaviour observed sourced from Singapore’s PUB) and in the course of our businesses. The METHODOLOGY surface water (rain-water harvesting). reporting channels are handled with • Water intensity is derived by taking confidential safeguards to ensure that This section explains the boundaries, methodologies and assumptions used total water withdrawal divided by whistleblowers are protected from the GFA less vacant lettable area for reprisals or victimisation if reports are in the computation of Mapletree’s the four stable properties. made in good faith or are not malicious. sustainability data and information. Employees data Anti-corruption Environmental data • Employee data relates to the The Group recognises that our • Property-specific data relates to the management teams of the Singapore- operations in various geographies and four stable properties in Singapore listed REITs and other business engagement with multiple stakeholders – (i) HFC (ii) HFT (iii) 20 HD (iv) TPD subsidiaries based in Singapore, and in our business activities exposes us (note: reporting scope for waste does not include workers who are to the risks of bribery and corruption. does not include TPD) The Group has a zero-tolerance policy non-employees (e.g. TPSPs). towards bribery and corruption and we Energy New hires and turnover take precautionary measures to address • The most significant form of energy • New hires rate is calculated by such risks. consumed relates to purchased taking the sum of the new hires electricity from the grid, and only in a year divided by 12 to obtain Our policies relating to anti-corruption, includes the common areas and the average number of new hires the prohibition of bribery, acceptance shared services within the four in a year. The percentage is then or offer of lavish gifts or entertainment stable properties. calculated by dividing this taking are strictly enforced. In addition, our • Electricity intensity is derived by employees are required to adhere to the average of the actual number taking total electricity consumption the Group’s policies and procedures of new hires in each month across a divided by the gross floor area relating to code of ethics and conduct, total of 12 months in a year. (GFA) less vacant lettable area for conflict of interest and dealing in • Turnover rate is calculated by taking the four stable properties. Mapletree-listed securities. the actual number of resignees in
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Key Stakeholder Engagement Method Key Topics of Interest Investors Timely and transparent updates of annual financial results and • Sustain profitability announcements, business developments, and other relevant • Transparent reporting disclosures via key channels • Sound corporate governance practices • Active portfolio management One-on-one meetings and site visits during the year • Business strategy and outlook Tenants – existing Regular formal or informal tenant gatherings, meetings and • Safe and secure office premises and potential feedback sessions to exchange ideas and update on important • Responsiveness to tenant requests initiatives and matters and feedback • Competitive rental rates and locations Established channels of communication for tenant and property-related issues throughout the year One-on-one meetings and site visits during the year Employees Immersion programme for new employees during the year • Equitable remuneration • Fair and competitive employment Training and development programmes throughout the year practices and policies Career development performance appraisals during the year • Safe and healthy work environment • Focus on employee development and Recreational and wellness activities throughout the year well-being Regular e-mails, meetings and an annual Staff Communication session Government and Meetings and dialogue sessions during the year • Compliance with, and keeping Regulators abreast of changing laws and Membership in industry associations such as the REIT Association regulations of Singapore (REITAS)
Business Partners Regular meetings, dialogue and site-walk sessions with service • Equitable treatment of business (e.g. TPSPs) providers, property managers and development managers partners • Regular and punctual payments upon Established channels of communication throughout the year enlistment of service
each month, summed up for a total • High-consequence work-related or in an injury from which the of 12 months and then divided by injuries are defined as work-related worker cannot, does not, or is 12 to obtain the average number of injuries that result in a fatality not expected. resignees in a year. The percentage is then calculated by dividing this average over the average total 1 Refer to Page 120 for Stakeholder Engagement summary. number of employees. 2 Targets for FY21/22 were established and accurate at the point of production and may be revised depending on the progression of Covid-19 situation. 3 ROIE is computed based on adjusted* PATMI over the Group’s equity held at original invested cost (OIC). Occupational health and safety 4 ROE denotes return on equity and is computed based on PATMI attributable to Equity Holder of the Company over shareholder’s funds. • Work-related injuries are defined as 5 PATMI denotes net profit after tax and non-controlling interests attributable to Perpetual Securities a negative impact on an employee’s Holders and Equity Holder of the Company. health arising from exposure to 6 KPIs measured on a five-year cumulative basis. 7 Measured on Mapletree Investments’ balance sheet perspective (excluding REITs) and private funds. hazards at work. Injuries as a result 8 Singapore Commercial sites refer to (i) HarbourFront Centre (HFC), (ii) HarbourFront Towers One and of commuting incidents are only Two (HFT), (iii) 20 Harbour Drive (20 HD) (formerly reported as PSA Vista in FY19/20), (iv) Tanjong Pagar included if the transport has been Distripark (TPD) 9 0.9% savings will be achieved due to opportunistic reduction of landlord energy consumption due to an organised by Mapletree. The rate expected slow resumption of economic activities in FY21/22. of work-related injuries is computed 10 Employee data include the management teams of the Singapore-listed REITs and other business based on 1,000,000 man-hours subsidiaries based in Singapore, and does not include other workers who are non-employees (e.g. TPSPs). worked. * Adjusted to exclude non-cash and non-operating items such as unrealised revaluation gains or losses, mark-to-market fair value adjustments, gains and losses on foreign exchange, negative goodwill and dilution gains and loss and include OIC gains from any gains or losses on disposal and corporate restructuring surplus or deficit.
120 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 GRI CONTENT INDEX
GRI Standards Disclosures Reference(s) and/or Identified Explanation Omission(s) General Disclosures Organisational profile 102-1 Name of the organisation Page 94 102-2 Activities, brands, products, and services Pages 6-7, 74-86, 88-91 102-3 Location of headquarters Page 87 102-4 Location of operations Pages 74-86, 87 102-5 Ownership and legal form Pages 198-202 102-6 Markets served Pages 74-86, 87 102-7 Scale of the organisation Pages 74-86, 88-91, 107-108 102-8 Information on employees and other workers Page 108 102-9 Supply chain Pages 52-73 102-10 Significant changes to the organisation and its supply chain Pages 32-38 102-11 Precautionary principle or approach Pages 130-132 102-12 External initiatives Pages 97-98 102-13 Membership of associations Page 120 Strategy 102-14 Statement from senior decision-maker Pages 8-17 Ethic and integrity 102-16 Values, principles, standards, and norms of behavior Pages 95, 118-119, 125-129 102-17 Mechanisms for advice and concerns about ethics Pages 125-129 Governance 102-18 Governance structure Page 95 102-20 Executive-level responsibility for economic, environmental, and social topics Page 95 102-29 Identifying and managing economic, environmental, and social impacts Pages 96-98 102-32 Highest governance body’s role in sustainability reporting Page 95 102-36 Process for determining remuneration Pages 125-129 Stakeholder engagement 102-40 List of stakeholder groups Page 120 102-41 Collective bargaining agreements – Not applicable, as there are no collective bargaining agreements in place. 102-42 Identifying and selecting stakeholders Page 120 102-43 Approach to stakeholder engagement Page 119 102-44 Key topics and concerns raised Page 120 Reporting practice 102-45 Entities included in the consolidated financial statements Pages 224-226 102-46 Defining report content and topic boundaries Page 94 102-47 List of material topics Pages 97-98 102-48 Restatement of information – 102-49 Changes in reporting – Not applicable, as there are no changes from the previous reporting period.
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GRI Standards Disclosures Reference(s) and/or Identified Explanation Omission(s) Reporting practice 102-50 Reporting period Page 94 102-51 Date of most recent report The AR/SR for FY19/20 was published in June 2020. 102-52 Reporting cycle Annual 102-53 Contact point for questions regarding the report Page 94 102-54 Claims of reporting in accordance with the GRI Standards Page 94 102-55 GRI content index Pages 121-124 102-56 External assurance Mapletree has not sought external assurance on this report but may do so in the future. Material Topic: Economic performance GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 99-100 103-2 The management approach and its components Pages 99-100 103-3 Evaluation of the management approach Pages 99-100 GRI 201 (2016): Economic performance 201-1 Direct economic value generated and distributed Pages 142-150 Information unavailable for breakdown of economic value distributed. Material Topic: Talent retention GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 107-110 103-2 The management approach and its components Pages 107-110 103-3 Evaluation of the management approach Pages 107-110 GRI 401 (2016): Employment 401-1 New employee hires and employee turnover Page 108 Mapletree does not view the breakdown by age group, gender and region as material as the Group adopts fair employment practices. GRI 404 (2016): Training and education 404-2 Programmes for upgrading employee skills and transition assistance Pages 107-110 programmes 404-3 Percentage of employees receiving regular performance and career Pages 107, 110 development reviews
122 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 GRI Standards Disclosures Reference(s) and/or Identified Explanation Omission(s)
Material Topic: Health and safety GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 111-113 103-2 The management approach and its components Pages 111-113 103-3 Evaluation of the management approach Pages 111-113 GRI 403 (2018): Occupational health and safety 403-2 Hazard identification, risk assessment, and incident investigation Pages 111-113 403-5 Worker training on occupational health and safety Pages 111-113 403-6 Promotion of worker health Pages 111-113 403-7 Prevention and mitigation of occupational health and safety impacts directly Pages 111-113 linked by business relationships 403-9 Work-related injuries Page 112 Information unavailable for workers who are not employees but whose work and/ or workplace is controlled by the organisation GRI 416 (2016): Customer health and safety 416-2 Incidents of non-compliance concerning the health and safety impacts of Page 118 products and services Material Topic: Local communities GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 114-117 103-2 The management approach and its components Pages 114-117 103-3 Evaluation of the management approach Pages 114-117 GRI 103 (2016): Management approach 413-1 Operations with local community engagement, impact assessments and Pages 114-117 development programmes Material Topic: Energy GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 101-103 103-2 The management approach and its components Pages 101-103 103-3 Evaluation of the management approach Pages 101-103 GRI 302 (2016): Energy 302-1 Energy consumption within the organisation Page 102 302-3 Energy intensity Page 102 GRI 305 (2016): Emissions 305-2 Energy indirect (Scope 2) GHG emissions Page 102 305-4 GHG emissions intensity Page 102 GRI-G4 Sector Disclosures: Construction and real estate CRE1 Building energy intensity Page 102 CRE3 GHG emissions intensity from buildings Page 102 CRE8 Type and number of sustainability certification, rating and labeling schemes Pages 105-106
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GRI Standards Disclosures Reference(s) and/or Identified Explanation Omission(s)
Material Topic: Water GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 103-105 103-2 The management approach and its components Pages 103-105 103-3 Evaluation of the management approach Pages 103-105 GRI 303 (2018): Water and effluents 303-1 Interactions with water as a shared resource Pages 103-105 303-2 Management of water discharge-related impacts Pages 103-105 303-3 Water withdrawal Pages 103-105 GRI-G4 Sector Disclosures: Construction and real estate CRE2 Building water intensity Page 104 CRE8 Type and number of sustainability certification, rating and labeling schemes Pages 105-106 Material Topic: Anti-corruption GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 118-119 103-2 The management approach and its components Pages 118-119 103-3 Evaluation of the management approach Pages 118-119 GRI 205 (2016): Anti-corruption 205-3 Confirmed incidents of corruption and actions taken Pages 118-119 Material Topic: Compliance with laws and regulations GRI 103 (2016): Management approach 103-1 Explanation of the material topic and its boundary Pages 118-119 103-2 The management approach and its components Pages 118-119 103-3 Evaluation of the management approach Pages 118-119 GRI 307 (2016): Environmental compliance 307-1 Non-compliance with environmental laws and regulations Pages 118-119 GRI 417 (2016): Marketing and labelling 417-2 Incidents of non-compliance concerning product and service information Pages 118-119 and labelling 417-3 Incidents of non-compliance concerning marketing communications Pages 118-119 GRI 419 (2016): Socioeconomic compliance 419-1 Non-compliance with laws and regulations in the social and economic area Pages 118-119
124 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 SUSTAINABILITY CORPORATE GOVERNANCE
A) BOARD MATTERS performance and key activities, as well as reviews strategic policies, significant As Mapletree continues its Board’s conduct of affairs acquisitions and divestments. The business expansion globally, Mapletree upholds the principle Board is updated on any material that an effective Board of Directors change to relevant laws, regulations the Group places importance (Board) is one that has the right and accounting standards through on maintaining good corporate core competencies and diversity of briefings by professionals or updates experiences. The collective wisdom of issued by the Management. governance practices to the Board provides strategic guidance ensure investor confidence and diverse insights to support All Directors provide, and are also the Group’s Management who is and business integrity. provided with the other Directors’ accountable to the Board. disclosures of interests. Although Mapletree is not The key roles of the Board are to: listed on a stock exchange • guide the corporate strategy and Board composition and balance Mapletree believes that a strong and and therefore not subjected direction of the Group; independent Board composition to mandatory disclosures, the • ensure that the Management discharges business leadership and will prompt broad and in-depth Group voluntarily subscribes demonstrates the highest quality deliberations between the Board and its Management. Apart from the to some of the core principles of management with integrity and enterprise; and Group Chief Executive Officer (GCEO), set out in the Code of • oversee the proper conduct of the who is an Executive Director, all Board Corporate Governance issued Management. members are Independent Directors. by the Monetary Authority of Board committee membership The Board is supported by the Audit and Singapore. The Board comprises 11 members, of Risk Committee (AC), which oversees whom 10 are Non-Executive Directors financial, risk and audit matters. In and Independent Directors. Board addition, other Board committees, Mapletree is also committed committees are also constituted to namely the Executive Resource and to establishing long-term assist the Board in discharging its Compensation Committee (ERCC), the duties. The composition of the Board Investment Committee (IC) and the value creation and integrating and the various Board committees are Transaction Review Committee (TRC), sustainability into its strategy, detailed on the next page. are constituted to address different aspects of the business. All these policies and practices. To this Mapletree’s Directors are business ensure optimal effectiveness of the end, Mapletree has voluntarily leaders and distinguished professionals Board, fostering active participation and contribution. published its fourth Global in their respective fields who are appointed based on their professional Reporting Initiative (GRI) calibre, experience and stature. The Chairman and GCEO compliant Sustainability Report Board was formed with the overall Mapletree adopts the principle that a consideration that their collective clear separation between the roles and which can be found on pages experiences will bring breadth and responsibilities of the Chairman and the 94 to 124 of this Annual Report. depth to the Board’s deliberations. The GCEO institutes an appropriate balance diversified professional backgrounds of power and authority. of the Directors enable the Group’s Management to benefit from their As a Non-Executive Independent external, varied and objective Director, the Chairman guides the perspectives on issues brought before Board in constructive debates on the Board. Every Director is expected matters of strategic direction, to act in good faith and consider the management and governance. Being interests of the Group at all times. non-executive, the Chairman is able to act independently in the best interests The Board meets at least once every of Mapletree. The Chairman and the quarter to assess Mapletree’s business GCEO are not related to each other.
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Name Board of Audit and Executive Resource Investment Transaction Directors Risk and Compensation Committee Review (Board) Committee Committee (IC) Committee (AC) (ERCC) (TRC) Mr Edmund Cheng Wai Wing Chairman Chairman Chairman Mr Lee Chong Kwee Member Chairman Chairman Mr Paul Ma Kah Woh Member Member Member Member Mr Tsang Yam Pui Member Member Mr Wong Meng Meng Member Member Member Mr David Christopher Ryan Member Member Mr Lim Hng Kiang Member Member Mr Samuel N. Tsien Member Ms Elaine Teo Member Member Mr Cheah Kim Teck Member Ms Chan Wai Ching Co-opted Member Mr Hiew Yoon Khong Member Group CEO & Ex-officio Member Ms Wendy Koh Mui Ai Group CFO & Ex-officio Member
The GCEO, who is a Board member, member is given sufficient time to bring The Board has separate and is responsible for the management of his or her perspective to the Board independent access to the Management the Group’s business. The GCEO carries to enable constructive discussions for and the Company Secretary. The out full executive responsibilities over balanced and well-considered decisions Company Secretary oversees the the business directions and operational to be made. administration of corporate secretarial decisions of the Group. The GCEO is matters, attends all Board and Board also responsible for ensuring compliance Access to information committee meetings, and provides with applicable laws and regulations in Mapletree adopts the principle that assistance to the Chairman in ensuring the Group’s day-to-day operations. the Board shall be provided with timely adherence to Board procedures. and complete information prior to Board membership Board meetings and when the need To discharge its responsibilities Mapletree recognises that Board arises. New Board members are briefed effectively, the Board takes renewal is a necessary ongoing process on Mapletree’s business through independent professional advice as to ensure good governance and to an orientation programme which and when necessary. The AC meets remain relevant to the changing needs covers the Group’s business, strategic the external and internal auditors of the Group. All appointments and direction, risk management policies and separately at least once a year, without resignations of Board members are governance practices. the presence of the Management. approved by the Board. All Board members are required to submit The Management is required to provide B) REMUNERATION MATTERS themselves for re-nomination and adequate and timely information to the re-election at regular intervals. As Board, which includes matters requiring Mapletree takes on the approach a Board member, the GCEO is also the Board’s decision as well as ongoing that remuneration matters are to be subject to retirement and re-election. reports relating to the operational and sufficiently structured and benchmarked financial performance of the Group. The to good market practices, in order to Management is also required to furnish attract suitably qualified talent to grow Board performance and manage its business. Mapletree adopts the principle that the any additional information requested Board’s performance is reflected in the by the Board in a timely manner for the performance of the Group. Each Board Board to make informed decisions.
126 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 Mapletree adopts the principle that salary, allowances, bonuses and Mapletree has established internal remuneration for the Board and the share appreciation awards from the controls and risk management systems Management should be viewed in Group. The latter is conditional upon that address the key operational, totality. To ensure continuous talent him meeting certain performance financial, compliance and information development and renewal of strong targets. The GCEO is not present technology (IT) risks relevant to the and sound leadership, the Group has during discussions relating to his own Group’s business and operating implemented a performance-linked compensation, terms and conditions of environment. These systems provide remuneration system. To this end, the service, and performance review. reasonable but not absolute assurance ERCC is responsible for recruiting and on the achievement of their intended retaining key talents. Previously, the ERCC’s duties included internal controls and risk management overseeing the executive compensation objectives. The members of the ERCC are: and talent development matters of • Mr Edmund Cheng Wai Wing Mapletree Logistics Trust Management The key elements of Mapletree’s (Chairman); Ltd (MLTM), Mapletree Industrial Trust internal controls and risk management • Mr Paul Ma Kah Woh (Member); and Management Ltd (MITM), Mapletree systems of controls are as follows: • Ms Chan Wai Ching, Senior Managing Commercial Trust Management Ltd Director, Temasek International (MCTM) and Mapletree North Asia Operating structure (Private) Limited (Co-opted Member). Commercial Trust Management Ltd Mapletree has a well-defined (MNACTM), which are respectively operating structure with clear lines All ERCC members are independent the real estate investment trust (REIT) of responsibility and delegated of the Management. The ERCC Managers of Mapletree Logistics Trust, authority, complementing the reporting oversees executive compensation and Mapletree Industrial Trust, Mapletree mechanism to the Management and development of the Management’s Commercial Trust and Mapletree North the Board. bench strength, so as to build and Asia Commercial Trust (MNACT), augment a capable and dedicated each of which has Mapletree as its Policies, procedures and practices management team. In addition, it also sponsor. Since January 2016, with the Controls are detailed in formal gives guidance on progressive policies establishment of a Nominating and procedures and manuals. For example, which can attract and retain a pool of Remuneration Committee (NRC) by the Board has approved a set of talented executives for the present and each of the board of directors of delegations of authority that sets out future growth of the Group. MLTM, MITM, MCTM and MNACTM, approval limits for investments and the respective NRC oversees the divestments, development, operational Specifically, the ERCC: remuneration and succession matters of and capital expenditures and treasury • establishes compensation policies the directors and senior management activities. for key executives; of each REIT Manager. • approves salary reviews, bonuses Approval sub-limits are also provided at and incentives for key executives; C) ACCOUNTABILITY AND AUDIT various management levels to facilitate • approves key appointments and operational efficiency and provide a reviews succession plans for key Accountability system of checks and balances. positions; and Mapletree embraces the belief that • oversees the development of key in order to build confidence among Mapletree’s procedures and practices executives and younger talented stakeholders, there is a need to are regularly reviewed and revised executives. deliver sustainable value. The Group where necessary to enhance complies with statutory and regulatory controls and efficiency. Mapletree Annually, the ERCC conducts a requirements as well as adopts best has implemented a Control succession planning review of the practices in its business processes. Self-Assessment programme GCEO and several key positions in the On a regular basis, the Board is also to reinforce risk awareness and Group. In this regard, potential internal apprised of the Group’s performance compliance with internal controls within and external candidates for succession in order to make a balanced and the Group, by fostering accountability, are reviewed for immediate, medium informed assessment of the Group’s control and risk ownership. and longer term needs. The ERCC held performance, position and prospects. a total of two meetings in FY20/21. The Internal Audit (IA) department Internal controls reviews compliance with the control The GCEO, as an Executive Director, Mapletree adopts the principle that a procedures and policies established does not receive Director’s fees. He is sound system of internal controls and within the internal control and risk a lead member of the Management. risk management is necessary for the management systems. His compensation consists of his Group’s business.
127 SUSTAINABILITY CORPORATE GOVERNANCE
Whistleblowing policy More information relating to risk risk, liquidity risk, currency risk and To reinforce a culture of good business management can be found on pages credit risk. Where necessary and ethics and governance, Mapletree has 128 to 130 of this Annual Report. appropriate, Mapletree hedges a whistleblowing policy to encourage against interest and/or currency rate the reporting, in good faith, of any Information technology controls fluctuations. In addition, Management suspected improper conduct, including As part of the Group’s risk management proactively manages liquidity risk by possible financial irregularities, while process, IT controls and cybersecurity ensuring that sufficient working capital protecting the whistleblowers from measures have been put in place lines and loan facilities are maintained. reprisals. Any reporting is notified to and are periodically reviewed to The Group also has in place credit the AC Chairman for investigation ensure that IT risks and cybersecurity control procedures for managing and to the AC for deliberation on threats are identified and mitigated. tenant credit risk and monitoring the findings. As part of the periodic review, debt collection. regulatory requirements, such as the For queries or to make a report, please MAS Cyber Hygiene Notice and the Internal audit write to [email protected]. MAS Technology Risk Management Annually, IA prepares a risk-based Guidelines (January 2021) are audit plan to review the adequacy and Risk management monitored and complied with where effectiveness of Mapletree’s system Risk management is an integral part of applicable. of internal controls. The department is Mapletree’s business strategy. also involved during the year in In order to safeguard and create value On an annual basis, Mapletree conducts conducting system or process reviews for stakeholders, Mapletree proactively the Business Continuity Plan (BCP) and that may be requested by the AC or manages risks and embeds the risk IT Disaster Recovery (ITDR) Tests, as the Management on specific areas management process as part of the well as engages external specialists to of concern. In doing so, IA obtains Group’s planning and decision-making perform a Vulnerability and Penetration reasonable assurance that business process. Test (VAPT) on the Group’s networks, objectives for the process under systems, and devices. The BCP and review are being achieved and key The Risk Management (RM) ITDR ensure that critical IT systems control mechanisms are in place. Upon department oversees the Enterprise remain functional in a crisis situation or completion of each review, a formal Risk Management (ERM) framework, system failure, and the VAPT ensures report detailing the audit findings and which is adapted from the International that cybersecurity measures deployed the appropriate recommendations will Organisation for Standardisation under continue to be effective. be issued to the AC. IA monitors and (ISO) 31000 Risk Management. It reports reports on the timely implementation key risk exposures, portfolio risk profile Financial reporting of the action plans to the Management and activities in respect of significant The Board is updated quarterly on and the AC quarterly. risk matters to the AC and the Board the Group’s financial performance. independently on a quarterly basis. These reports provide explanations External audit for significant variances in financial The external auditors provide an The risk management system, which performance, in comparison with independent perspective on certain encompasses the ERM framework budgets and the actual performance aspects of the internal financial controls and the risk management process, is of corresponding periods in the system arising from their work, and dynamic and evolves with the business. preceding year, as well as an updated report their findings to the AC annually. Mapletree has identified key risks, full-year forecast. The Board is also assessed their likelihood and impact on provided with quarterly updates on Transaction Review Committee (TRC) the Group’s business and established key operational activities. Since March 2013, with the listing corresponding mitigating controls. of MNACT, Mapletree has established The information is maintained in a risk Financial management a TRC to: register that is reviewed and updated The Management reviews the monthly regularly. The RM department works performances of the Group’s portfolio (a) resolve any potential conflict of closely with the Management to review properties to instil financial and interest that may arise between and enhance the risk management operational discipline at all levels of (i) MNACT and the Mapletree system in accordance with market the Group. China Opportunity Fund II (whose practices and regulatory requirements, investment mandate includes under the guidance and direction of The key financial risks which Mapletree investment properties in China) as the AC and the Board. is exposed to comprise interest rate well as any future Greater China
128 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 commercial private fund (whose • approval of the remuneration and The Standards set by the IIA cover investment mandate includes terms of engagement of external requirements on: commercial properties in Greater auditors. • independence and objectivity; China) concerning the process to be • proficiency and due professional undertaken to acquire investment In addition, the AC also: care; properties in Greater China; and • meets with the external and internal • managing the internal audit activity; (ii) MNACT and any future Japan auditors, without the presence of the • engagement planning; commercial private fund (whose Management, at least once a year • performing engagement; investment mandate includes to review and discuss the financial • communicating results; and commercial properties in Japan) reporting process, system of • monitoring progress. concerning the process to be internal controls (including financial, undertaken to acquire investment operational and compliance The internal auditors involved in properties in Japan; and controls), significant comments and IT audits are Certified Information recommendations; and System Auditors and members of the (b) grant approval for the acquisition • reviews and, if required, investigates Information System Audit and Control of any seed asset for a future the matters reported via the Association (ISACA) in the US. Greater China commercial private whistleblowing mechanism by The ISACA Information System fund or a future Japan commercial which staff may, in confidence, Auditing Standards provide guidance private fund. raise concerns about suspected on the standards and procedures to be improprieties including financial applied in IT audits. With regard to (a), the TRC process will irregularities. not apply if the proposed acquisition To ensure that the internal audits are is by way of a tender, auction or any The objective is to ensure that performed by competent professionals, other form of competitive process. arrangements are in place for IA employs qualified staff. In order for independent investigations of any their technical knowledge to remain Audit and Risk Committee matter arising from such meetings, current and relevant, IA also provides The AC supports the Board in financial, and for review of such investigations to training and development opportunities risk and audit matters, so as to ensure appropriate follow-up actions to its staff. maximise the effectiveness of the Board are taken. The AC held a total of four and foster active participation and meetings in FY20/21. In compliance with the IIA Standards, contribution. an external quality assessment review Internal Audit Department (QAR) of IA is conducted at least Mapletree adopts the principle that the Mapletree adopts the practice that IA once every five years by a qualified, AC shall have at least three members, reports directly to the Chairman of the independent reviewer. The last external all of whom must be non-executive and AC and administratively to the Head, QAR of IA was completed in 2018 and the majority of whom, including the Operations System and Control. it was assessed that the Internal Audit AC Chairman, must be independent. function is in conformance with the IIA The role of IA is to conduct internal standards. The next external QAR will The AC has written Terms of Reference audit work in consultation with but be conducted in 2023. dealing with its scope and authority, independently of the Management. which include: Its annual audit plan and findings D) COMMUNICATION WITH • review of annual internal and are submitted to the AC. The AC SHAREHOLDERS external audit plans; also meets with IA at least once a • review of audit findings of internal year without the presence of the Mapletree adopts the principle of and external auditors, as well as the Management. The Head of IA is a providing regular and timely Management’s responses to them; member of the Singapore branch of the communication with its shareholders, • review of quarterly results and Institute of Internal Auditors Inc. (IIA), as well as ensuring equal access annual financial statements; which has its headquarters in the United to information. • review of the quality and reliability States (US). IA is in conformance with of information prepared for the International Standards for inclusion in financial reports; the Professional Practice of Internal • recommendation of the Auditing (Standards) developed by appointment and re-appointment the IIA, and has incorporated these of external auditors; and Standards into its audit practices.
129 SUSTAINABILITY RISK MANAGEMENT
STRONG OVERSIGHT AND objectives and strategies for Mapletree, GOVERNANCE and which is also integrated with Risk management is an integral operational processes for effectiveness The Board of Directors (Board) is and accountability. part of Mapletree’s business responsible for determining the Group’s strategy to deliver strong overall risk strategy and risk governance, Mapletree’s Enterprise Risk Management as well as ensuring that the Management (ERM) framework is adapted from earnings and sustainable implements sound risk management and the International Organisation for returns. internal control practices. The Board also Standardisation ISO 31000 Risk approves the risk appetite and tolerance Management. It is dynamic and evolves statements, which set out the nature with the business, thus providing the To safeguard and create and extent of risks that can be taken to Group with a holistic and consistent achieve the Group’s business objectives. process for the identification, value for stakeholders, the The Board, which is supported by assessment, monitoring and reporting Management proactively the Audit and Risk Committee (AC), of risks. The RM department works comprises directors whose collective closely with the Management to manages risks and embeds the diverse experience and knowledge serve continually review and enhance the risk risk management process as to give guidance and provide strategic management system in accordance insights to the Management. As part of with market practices and regulatory part of the Group’s planning the review of Mapletree’s portfolio risks, requirements, under the guidance and and decision-making process. the AC engages directly with the Risk direction of the AC and the Board. A Management (RM) department on a group-wide control self-assessment quarterly basis. (CSA) framework further reinforces risk awareness by fostering accountability, At Mapletree, the risk management control and risk ownership, as well culture involves both top-down oversight as provides additional assurance to and bottom-up engagement from all the Management and the Board that employees. This ensures a risk approach operational risks are being effectively and that is aligned with the Group’s business adequately managed and controlled.
ENTERPRISE RISK MANAGEMENT FRAMEWORK
Risk Appetite, Tolerance, Risk Attitudes and Philosophy Strategy
Risk Reporting Structures, Risk Roles and Responsibilities Governance
1 Risk Identification 5 Risk Reporting 2 Risk Assessment • Risk Analysis 4 Risk • Risk Evaluation Monitoring 3 Risk Risk Management Process Treatment
Strategic | External | Operational | Financial | Key Risks Compliance | Information Technology
Internal Audit | Key Risk Indicators | Delegation of Authority | Financial | Standard Operating Procedures | Risk Assurance Control Self-Assessment | Training | Whistleblowing
130 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 ROBUST MEASUREMENT AND Investment risk management strategy. Additionally, ANALYSIS Mapletree adopts a rigorous and the Management will seek suitable disciplined investment approach, which acquisition opportunities in these Mapletree’s risk measurement framework subjects all investment proposals to markets to diversify Mapletree’s income is based on Value-at-Risk (VaR), a stringent reviews. Project returns are stream and enhance the resilience of methodology which measures the assessed against internal country and the portfolio. volatilities of market and property risk sector-specific hurdle rates, which are drivers such as rental rates, occupancy independently determined by the RM Operational risks rates, capital values, interest rates and department and regularly reviewed by Comprehensive operating, reporting and foreign exchange rates. It takes into the Management. Sensitivity analysis monitoring guidelines enable Mapletree consideration changes in the market is performed for each acquisition on to manage day-to-day activities and environment and asset cash flows. To all key project variables to test the mitigate operational risks. To ensure complement the VaR methodology, robustness of the assumptions used. For relevance, the Group regularly reviews other risks such as refinancing, tenant- significant acquisitions, independent its standard operating procedures (SOPs) related and development risks are also risk assessments are conducted by and benchmarks them against industry assessed, monitored and measured as the RM department and included in practices where appropriate. part of the framework where feasible. investment proposals submitted to the Investment Committee or the Board Compliance with SOPs is assessed The VaR methodology measures risks for approval. All investment proposals under the CSA framework and consistently across Mapletree’s portfolio are subject to rigorous scrutiny by the reinforced through training of of assets. It enables the Management Board (or delegated to the Management employees and regular reviews by the to quantify the benefits that arise from Committee), in accordance with the Internal Audit department. diversification across the portfolio and Board’s approved delegation of authority. to assess risk by country, asset class and Human resource risk risk type. The Management recognises Project development risk The loss of key management personnel the limitations of any statistically based New development projects usually take or inability to attract, grow and retain key analysis that relies on historical data. a few years to complete, depending talent and leaders can cause disruptions Therefore, Mapletree’s portfolio is subject on the project size and complexity. to the Group’s business operations and to stress tests and scenario analyses to To mitigate the risks of development hinder the achievement of its business ensure that the Group remains resilient in delays, cost overruns and lower than objectives. Succession planning, the event of unexpected market shocks. expected quality, the Management has talent management, competitive put in place stringent pre-qualifications compensation and benefit plans have RISK IDENTIFICATION AND for consultants and contractors as well as been put in place to attract, reward and ASSESSMENT regular reviews of the project progress. retain talents and performing personnel. The Management identifies key risks, External risks Property damage and business assesses their likelihood and impact Economic and geopolitical risks disruption risks on the business, as well as establishes To manage economic and geopolitical In the event of unforeseen catastrophic corresponding mitigating controls. risks, Mapletree conducts rigorous events such as Covid-19, Mapletree The information is maintained in a risk country and real estate market research has a business continuity plan and register that is reviewed and updated and monitors the economic, geopolitical crisis communication plan that enable regularly. The key risks identified include and political developments closely. it to resume operations with minimal but are not limited to: The emergence of Covid-19 in early disruption and loss. Mapletree’s 2020 has heightened the economic properties are insured in accordance Strategic risks uncertainties globally. To mitigate the with industry norms in their respective Market risk adverse impact from Covid-19 on the jurisdictions and benchmarked against Mapletree’s portfolio is subject to real financial performance of Mapletree’s those in Singapore. estate market risks such as rental rate, properties, the Management has occupancy volatilities and country- extended rental reliefs to support Health and safety risks specific factors including competition, tenants, where necessary, and also Mapletree places utmost importance on supply and demand as well as local adopted flexible leasing strategies to health and safety of its stakeholders. regulations. Such risks are quantified, maintain a high portfolio occupancy. aggregated and monitored for existing Health and safety considerations are assets and prospective acquisitions. The Group will continue to closely incorporated in the Group’s SOPs. Significant risk profile changes or monitor economic and geopolitical Checks on fire protection systems emerging trends are reported for developments across the markets that as well as required certificates and assessment and/or action. it operates in as part of its active asset permits are performed regularly to
131 SUSTAINABILITY RISK MANAGEMENT
ensure compliance with regulatory Foreign exchange risk Compliance with the policies and requirements. After taking into account cost, tax procedures is required at all times. and other relevant considerations, This includes policies on ethics and Precautionary measures have been taken the Manager will borrow in the same code of conduct, safe work practices at Mapletree’s properties to safeguard currency as the underlying assets to and professional conduct. If an the well-being of its stakeholders provide some natural hedge, and/or employee is found guilty of fraud, during the pandemic. These included hedges through derivatives, whenever dishonesty or criminal conduct in enhancing the frequencies of cleaning appropriate. relation to his/her employment, the and disinfection of common areas, Management reserves the rights to increasing the availability of hand Liquidity risk take appropriate disciplinary action, sanitisers within properties as well as The Management actively monitors including termination of employment. instituting safe distancing measures. the Group’s cash flow position and For more information, please refer to funding requirements to ensure Information Technology (IT) risk page 113 of this annual report. there are significant liquid reserves Concerns over the threat posed by to fund operations, meet short-term cybersecurity attacks have risen as such Credit risk obligations, and achieve a well- attacks have become more prevalent Credit risk is mitigated from the outset staggered debt maturity profile. and sophisticated. Mapletree has in by conducting tenant credit assessment place comprehensive policies and as part of the investment due diligence The Group also maintains sufficient procedures governing information process prior to an acquisition. For new financial flexibility and adequate debt availability, control and governance, and sizeable leases, credit assessments headroom for Mapletree to fund as well as data security. An IT disaster of prospective tenants are undertaken future acquisitions. In addition, the recovery plan is in place and tested before the signing of lease agreements. Group monitors and mitigates bank annually to ensure that Mapletree’s On an ongoing basis, tenants’ credit concentration risks, by having a business recovery objectives are met. worthiness is closely monitored and well-diversified funding base. All employees are required to complete arrears are managed by the Credit a mandatory online training course on IT Control Committee, which meets Compliance risks security awareness to ensure that they regularly to review debtor balances. Regulatory risk are aware of potential cybersecurity To further mitigate credit risks, security Mapletree is committed to complying threats. On top of the constant deposits in the form of cash or banker’s with the applicable laws and regulations monitoring of Internet gateways to guarantees are collected from prospective of the various jurisdictions in which it detect potential security events, network tenants prior to the commencement of operates. Non-compliance may result in vulnerability assessment and penetration leases, where applicable. litigation, penalties, fines or revocation testing are also conducted regularly to of business licenses. Mapletree identifies check for potential security gaps. Financial risks the applicable laws and regulatory Financial market risks and capital obligations, and ensures compliance RIGOROUS MONITORING AND adequacy of Mapletree are closely with these laws and regulations in its CONTROL monitored and actively managed by day-to-day business processes. the Management, and reported to the Mapletree has developed internal key Board on a quarterly basis. Fraud risk risk indicators that serve as an early- A comprehensive corporate warning system to highlight risks that At the portfolio level, the risk impact governance framework has been have escalated beyond the agreed of interest rate and currency volatilities established to maintain responsible tolerance levels. The Management has on value is quantified, monitored and transparent business practices. The also established required actions to be and reported quarterly using the VaR framework contains specific guidelines taken when risk thresholds are breached. methodology. Refinancing risk is also on anti-corruption practices such as the quantified, taking into account the prohibition of bribery, acceptance or Every quarter, the RM department concentration of loan maturity profile offer of gifts and entertainment. presents a comprehensive report to the and credit spread volatility. Board and the AC, highlighting key risk The Group also has a whistleblowing exposures, portfolio risk profile, results of Interest rate risk policy that allows employees and stress testing scenarios such as Covid-19 The Management prudently manages stakeholders to raise any serious and status of key risk indicators. The exposure to interest rate volatility from concerns, dangers, risks, malpractices Board and the AC are also kept abreast the Group’s borrowings through interest or wrongdoings in the workplace while of any material changes to the Group’s rate derivatives and fixed rate debts. protecting them from reprisals. risk profiles and activities.
132 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 FINANCIAL STATEMENTS
CONteNTS
Directors’ Statement 134
Independent Auditor’s Report 139
Statements of Profit or Loss 142
Statements of Comprehensive Income 143
Statement of Financial Position – Group 144
Statement of Financial Position – Company 145
Statement of Changes in Equity – Group 146
Statement of Changes in Equity – Company 148
Consolidated Statement of Cash Flows 149
Notes to the Financial Statements 151
133 DIRECTORS’ STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
The directors present their statement to the member together with the audited financial statements of Mapletree Investments Pte Ltd (the “Company”) and its subsidiaries (the “Group”), which comprise the statements of financial position of the Company and of the Group as at 31 March 2021, the statements of profit or loss, statements of comprehensive income and statements of changes in equity of the Company and of the Group and the consolidated statement of cash flows of the Group for the financial year ended 31 March 2021.
In the opinion of the directors,
(a) The statement of profit or loss, statement of comprehensive income, statement of financial position and statement of changes in equity of the Company and consolidated financial statements of the Group as set out on pages 142 to 231 are drawn up so as to give a true and fair view of the financial position of the Company and of the Group as at 31 March 2021 and the financial performance and changes in equity of the Company and of the Group and cash flows of the Group for the financial year covered by the consolidated financial statements; and
(b) As at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
DIRECTORS
The directors of the Company in office as at the date of this statement are as follows:
Cheng Wai Wing Edmund Cheah Kim Teck David Christopher Ryan Lee Chong Kwee Lim Hng Kiang Ma Kah Woh Paul Marie Elaine Teo Samuel N. Tsien Tsang Yam Pui Wong Meng Meng Hiew Yoon Khong
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than those disclosed under “Mapletree Performance Share Units Plan”, “Mapletree Restricted Share Units Plan” and “Mapletree NED Restricted Share Units Plan” on pages 136 to 138 of this statement.
134 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 DIRECTORS’ STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES
According to the register of directors’ shareholdings, none of the directors holding office as at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:
Holdings in which Holdings registered director is deemed in name of director to have an interest As at As at As at As at 31 March 2021 1 April 2020 31 March 2021 1 April 2020
Astrea III Pte. Ltd. (ASTREA III US$170M 4.65% N260708) Lim Hng Kiang US$400,000 US$400,000 – –
Astrea IV Pte. Ltd. (ASTREA IV US$210M 5.5% B280614) Lim Hng Kiang US$200,000 US$200,000 – –
(ASTREA IV S$242M 4.35% B280614) Lim Hng Kiang S$8,000 S$8,000 – –
(ASTREA IV US$110M 6.75% B280614) Lim Hng Kiang US$200,000 – – –
Astrea V Pte. Ltd. (ASTREA V US$230M 4.5% B290620) Lim Hng Kiang US$400,000 US$200,000 – –
Astrea VI Pte. Ltd. (ASTREA VI US$228M 3.25% B310318) Lim Hng Kiang US$200,000 – – –
(ASTREA VI US$130M 4.35% B310318) Lim Hng Kiang US$800,000 – – –
CapitaLand Limited (Ordinary shares) Lim Hng Kiang 50,000 30,000 – – Hiew Yoon Khong 105,550 105,550 – – Ma Kah Woh Paul 7,539 7,539 – –
Olam International Limited (OLAM US$500M 5.35% PERCAPSEC) Lim Hng Kiang US$400,000 US$200,000 – –
Singapore Telecommunications Limited (Ordinary shares) Lim Hng Kiang 11,360 66,360 – – Ma Kah Woh Paul 190 190 190 190 Wong Meng Meng 1,667 1,667 1,550 1,550
135 DIRECTORS’ STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (CONTINUED)
Holdings in which Holdings registered director is deemed in name of director to have an interest As at As at As at As at 31 March 2021 1 April 2020 31 March 2021 1 April 2020
Singapore Airlines Ltd (Ordinary shares) Lim Hng Kiang 7,500 3,000 – –
(SIA S$300M 3.75% N240408) Lim Hng Kiang S$250,000 S$250,000 – –
(SIA MCB S$3.496B Z300608) Lim Hng Kiang S$8,000 – – –
Singapore Technologies Engineering Ltd (Ordinary shares) Lim Hng Kiang 35,000 5,000 – – Hiew Yoon Khong – – 30,000 30,000
Singapore Technologies Telemedia Pte Ltd (ST TELEM S$375M 4.1% PERSEC) Lim Hng Kiang S$250,000 – – –
StarHub Ltd (Ordinary shares) Ma Kah Woh Paul 175,780 145,780 – –
Temasek Financial (I) Limited (TEMASEKFIN S$500M 3.785% N250305) Lim Hng Kiang S$250,000 S$250,000 – –
SHARE-BASED COMPENSATION PLANS
The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the share-based compensation plans.
(a) Mapletree Performance Share Units Plan and Mapletree Restricted Share Units Plan
The Mapletree Performance Share Units Plan (“Mapletree PSU Plan”) and the Mapletree Restricted Share Units Plan (“Mapletree RSU Plan”) (collectively referred to as the “Plans”) for employees (including executive director) were approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009. The first grant of award under the Plans was made in January 2010. The duration of each share plan is 10 years commencing from 4 November 2009. The Plans were approved to be extended for another 10 years commencing from 4 November 2019 by the Board of Directors and shareholder on 16 May 2019 and 10 September 2019 respectively.
136 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 DIRECTORS’ STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
SHARE-BASED COMPENSATION PLANS (CONTINUED)
(a) Mapletree Performance Share Units Plan and Mapletree Restricted Share Units Plan (continued)
Under the Plans, awards are granted to eligible participants. Eligible participants of the Plans include selected employees of the Company, subsidiaries and associated companies, including executive director.
A Performance Share Unit (“PSU”) or Restricted Share Unit (“RSU”) granted under the Plans represents a right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Plans, provided certain performance conditions and service conditions are met.
Under the Mapletree PSU Plan, awards granted to eligible participants vest immediately upon completion of the performance achievement periods. Awards are released once the ERCC is satisfied that the performance conditions have been achieved.
Similarly, under the Mapletree RSU Plan, a portion of the awards granted to eligible participants vest immediately upon completion of the performance achievement periods and the remaining awards will vest only after a further period of service beyond the performance target completion date. Awards are released once the ERCC is satisfied that the performance conditions have been achieved and the extended period of service beyond the performance target completion date have been fulfilled.
Details of the PSU and RSU granted to a director of the Company are as follows:
Outstanding Outstanding as at as at 31 March 2021 1 April 2020
Hiew Yoon Khong – PSU to be released after 31 March 2020 – 1,503,106 (1) – PSU to be released after 31 March 2021 1,603,615 (1) 1,603,615 (1) – PSU to be released after 31 March 2022 1,424,390 (1) 1,424,390 (1) – PSU to be released after 31 March 2023 1,556,420 (1) 1,556,420 (1) – PSU to be released after 31 March 2024 2,038,217 (1) 2,038,217 (1) – PSU to be released after 31 March 2025 1,248,227 (1) – – RSU to be released after 31 March 2018 – 144,760 (3) – RSU to be released after 31 March 2019 215,596 (3) 431,193 (4) – RSU to be released after 31 March 2020 602,691 (4) 717,489 (2) – RSU to be released after 31 March 2021 425,121 (2) –
Footnotes: (1) The final number of units to be released will depend on the achievement of pre-determined targets over a five-year performance period. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 200% of the initial award. (2) The final number of units to be released will depend on the achievement of pre-determined targets over a one-year performance period and the release will be over a vesting period of three years. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 150% of the initial award. (3) Being the unvested one-third of the award. (4) Being the unvested two-thirds of the award.
137 DIRECTORS’ STATEMENT FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
SHARE-BASED COMPENSATION PLANS (CONTINUED)
(b) Mapletree NED Restricted Share Units Plan
The Mapletree NED Restricted Share Units Plan (“Mapletree NED RSU Plan”) was approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009 and are restricted to non-executive directors of the Company. The first grant of award was made in June 2010. The duration of the Mapletree NED RSU Plan is 10 years commencing from 4 November 2009. The Plans were approved to be extended for another 10 years commencing from 4 November 2019 by the Board of Directors and shareholder on 16 May 2019 and 10 September 2019 respectively.
Under the Mapletree NED RSU Plan, awards are granted to eligible non-executive directors of the Company. A NED Restricted Share Unit (“NED RSU”) granted under the Mapletree NED RSU Plan represents a right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Mapletree NED RSU Plan. Grants of Mapletree NED RSU made to a non-executive director shall form part of the director’s remuneration.
Under the Mapletree NED RSU Plan, awards granted to eligible non-executive directors shall vest at the date of grant. The right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, is exercisable at the discretion of the non-executive directors at the annual pre-determined exercise period, until the date falling on the fifth (5th) anniversary of the date of grant of each award.
Details of the NED RSU granted to the non-executive directors of the Company are as follows:
Outstanding Outstanding as at as at 31 March 2021 1 April 2020
Cheng Wai Wing Edmund 52,173 55,796 Cheah Kim Teck 8,809 6,106 David Christopher Ryan 26,357 29,166 Lee Chong Kwee 31,970 33,934 Ma Kah Woh Paul 30,876 33,967 Marie Elaine Teo 15,434 11,981 Samuel N. Tsien 15,344 16,762 Tsang Yam Pui 24,677 23,631 Wong Meng Meng 25,698 27,434 Lim Hng Kiang 5,185 1,656
INDEPENDENT AUDITOR
The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.
On behalf of the directors
CHENG WAI WING EDMUND HIEW YOON KHONG Chairman Group Chief Executive Officer/Director
19 May 2021
138 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF MAPLETREE INVESTMENTS PTE LTD
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Our Opinion
In our opinion, the accompanying consolidated financial statements of Mapletree Investments Pte Ltd (the “Company”) and its subsidiaries (the “Group”) and the statement of profit or loss, statement of comprehensive income, statement of financial position and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (“the Act”) and Singapore Financial Reporting Standards (International) (“SFRS(I)s”) so as to give a true and fair view of the consolidated financial position of the Group and the financial position of the Company as at 31 March 2021, and of the consolidated financial performance of the Group and the financial performance of the Company, consolidated changes in equity of the Group and changes in equity of the Company and consolidated cash flows of the Group for the financial year ended on that date.
What we have audited
The financial statements of the Company and the Group comprise:
• the statements of profit or loss for the Company and the Group for the financial year ended 31 March 2021; • the statements of comprehensive income for the Company and the Group for the financial year then ended; • the statement of financial position − Group as at 31 March 2021; • the statement of financial position − Company as at 31 March 2021; • the statement of changes in equity − Group for the financial year then ended; • the statement of changes in equity − Company for the financial year then ended; • the consolidated statement of cash flows for the financial year then ended; and • the notes to the financial statements, including a summary of significant accounting policies.
Basis for Opinion
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code.
Emphasis of Matter
We draw attention to Note 3 and Note 33 to the financial statements, which describe the impact arising from the Coronavirus Disease 2019 outbreak on the valuation of the Group’s investment properties. Our opinion is not modified in respect of this matter.
Other Information
Management is responsible for the other information. The other information comprises the Directors’ Statement (but does not include the financial statements and our auditor’s report thereon), which we obtained prior to the date of this auditor’s report, and the other sections of the annual report (the “Other Sections”), which are expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.
139 INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF MAPLETREE INVESTMENTS PTE LTD
Other Information (continued)
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
When we read the Other Sections, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions in accordance with SSAs.
Responsibilities of Management and Directors for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Act and SFRS(I)s, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
The directors’ responsibilities include overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
140 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 INDEPENDENT AUDITOR’S REPORT TO THE MEMBER OF MAPLETREE INVESTMENTS PTE LTD
Auditor’s Responsibilities for the Audit of the Financial Statements (continued)
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary corporations incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
PricewaterhouseCoopers LLP Public Accountants and Chartered Accountants
Singapore, 19 May 2021
141 STATEMENTS OF PROFIT OR LOSS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Group Company Note 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Revenue 4 2,881,832 4,030,011 748,229 2,034,095
Other gains/(losses) – net and other income 5 948,837 1,229,379 (100,443) 21,186
Expenses – Depreciation and amortisation (40,024) (59,077) (15,436) (15,500) – Employee compensation 6 (360,580) (514,045) (163,675) (248,572) – Utilities and property maintenance (195,484) (309,063) (636) (772) – Property and related taxes (198,514) (282,967) (129) (155) – Marketing and promotion expenses (26,950) (46,441) (5,101) (6,295) – Professional fees (79,286) (112,166) (6,606) (5,968) – Property rental expenses (43,472) (331,391) (20) (39) – Cost of residential properties sold (97,758) (2,423) – – – Others (67,207) (101,225) (16,743) (10,195) 2,721,394 3,500,592 439,440 1,767,785
Finance costs (493,349) (715,271) (246) (367) Finance income 14,695 26,204 45,278 111,784 Finance (costs)/income − net 7 (478,654) (689,067) 45,032 111,417
Share of profit of associated companies 15 191,833 232,761 – – Share of profit of joint ventures 16 69,485 74,609 – – Profit before income tax 2,504,058 3,118,895 484,472 1,879,202
Income tax (expense)/credit 8 (395,613) (322,726) 6,826 7,615
Profit for the financial year 2,108,445 2,796,169 491,298 1,886,817
Profit attributable to: Equity holder of the Company 1,777,155 1,705,494 491,298 1,886,817 Perpetual securities holders 72,795 72,994 – – Non-controlling interests 258,495 1,017,681 – – 2,108,445 2,796,169 491,298 1,886,817
The accompanying notes form an integral part of these financial statements.
142 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 STATEMENTS OF COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Group Company Note 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Profit for the financial year 2,108,445 2,796,169 491,298 1,886,817
Other comprehensive income/(loss):
Items that may be reclassified subsequently to profit or loss
Cash flow hedges – Net fair value gain/(loss) 32,270 (235,710) – – – Realised and transferred to profit or loss 29,551 46,576 – – – Realised to profit and loss on deconsolidation of subsidiaries 34,606 – – – Currency translation differences (84,205) 113,498 – – Share of other comprehensive income of associated companies and joint ventures – Net fair value gain/(loss) on cash flow hedges 27,975 (9,411) – – – Net fair value loss on cash flow hedges realised and transferred to profit or loss (1,348) – – – – Currency translation differences 1,509 51,503 – –
Items that will not be reclassified subsequently to profit or loss
Revaluation (loss)/gain on property, plant and equipment, net of deferred tax (15,096) 4,920 – – Financial assets, at fair value through other comprehensive income (“FVOCI”) – Fair value gain on equity investments 13 14,245 – – –
Other comprehensive income/(loss) for the financial year, net of tax 39,507 (28,624) – – Total comprehensive income for the financial year 2,147,952 2,767,545 491,298 1,886,817
Total comprehensive income attributable to: Equity holder of the Company 1,840,364 1,651,095 491,298 1,886,817 Perpetual securities holders 72,795 72,994 – – Non-controlling interests 234,793 1,043,456 – – 2,147,952 2,767,545 491,298 1,886,817
The accompanying notes form an integral part of these financial statements.
143 STATEMENT OF FINANCIAL POSITION – GROUP AS AT 31 MARCH 2021
Note 2021 2020 $’000 $’000
ASSETS Current assets Cash and cash equivalents 9 2,021,268 2,440,059 Trade and other receivables 10 664,471 860,574 Properties held for sale 11 800,144 205,944 Other assets 12 400,546 405,939 Inventories 871 2,026 Financial assets, at fair value through profit or loss (“FVPL”) 14 9,503 – Derivative financial instruments 25 56,320 26,576 3,953,123 3,941,118
Non-current assets Trade and other receivables 10 148,819 111,555 Other assets 12 22,928 5,063 Financial assets, at FVOCI 13 68,178 69,973 Financial assets, at FVPL 14 51,551 48,742 Investments in associated companies 15 3,864,469 2,194,090 Investments in joint ventures 16 584,016 1,334,589 Investment properties 18 42,957,430 46,371,136 Properties under development 19 1,606,316 1,129,656 Property, plant and equipment 20 185,313 230,248 Intangible assets 23 110,112 139,685 Derivative financial instruments 25 47,227 35,584 49,646,359 51,670,321 Total assets 53,599,482 55,611,439
LIABILITIES Current liabilities Trade and other payables 24 1,605,233 1,375,445 Derivative financial instruments 25 113,358 193,513 Borrowings 26 1,911,361 2,807,414 Lease liabilities 35,046 44,123 Current income tax liabilities 180,195 230,691 3,845,193 4,651,186
Non-current liabilities Trade and other payables 24 488,389 576,952 Derivative financial instruments 25 197,798 351,882 Borrowings 26 18,271,662 18,758,385 Lease liabilities 209,698 267,480 Deferred income taxes 27 619,904 471,211 19,787,451 20,425,910 Total liabilities 23,632,644 25,077,096
NET ASSETS 29,966,838 30,534,343
EQUITY Share capital 28 3,094,307 3,094,307 Retained earnings 14,647,437 13,056,610 Foreign currency translation reserve (96,637) (53,926) Revaluation reserve 17,871 32,967 Hedging reserve 30 (61,303) (168,074) Fair value reserve 14,245 – Capital and other reserves 44,226 122,867 Shareholder’s funds 17,660,146 16,084,751 Perpetual securities 29 1,760,018 1,760,200 Non-controlling interests 39 10,546,674 12,689,392 Total equity 29,966,838 30,534,343
The accompanying notes form an integral part of these financial statements.
144 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 STATEMENT OF FINANCIAL POSITION – COMPANY AS AT 31 MARCH 2021
Note 2021 2020 $’000 $’000
ASSETS Current assets Cash and cash equivalents 9 39,535 23,661 Trade and other receivables 10 8,371,355 7,928,698 Other assets 12 2,669 2,166 8,413,559 7,954,525
Non-current assets Trade and other receivables 10 1,089,599 1,200,568 Investments in subsidiaries 17 1,364,759 1,465,202 Property, plant and equipment 20 29,917 17,936 Intangible assets 23 247 1,648 Deferred income taxes 27 53,728 49,459 2,538,250 2,734,813 Total assets 10,951,809 10,689,338
LIABILITIES Current liabilities Trade and other payables 24 181,997 167,516 Lease liabilities 9,161 7,515 Current income tax liabilities 5,690 20,771 196,848 195,802
Non-current liabilities Trade and other payables 24 199,372 194,152 Lease liabilities 15,627 1,420 214,999 195,572
Total liabilities 411,847 391,374
NET ASSETS 10,539,962 10,297,964
EQUITY Share capital 28 3,094,307 3,094,307 Retained earnings 7,445,655 7,203,657 Total equity 10,539,962 10,297,964
The accompanying notes form an integral part of these financial statements.
145 STATEMENT OF CHANGES IN EQUITY – GROUP FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Foreign currency Capital Non- Share Retained translation Revaluation Hedging Fair value and other Perpetual controlling Total Note capital earnings reserve reserve reserve reserve reserves securities interests equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
As at 1 April 2020 3,094,307 13,056,610 (53,926) 32,967 (168,074) – 122,867 1,760,200 12,689,392 30,534,343
Profit for the financial year – 1,777,155 – – – – – 72,795 258,495 2,108,445
Other comprehensive (loss)/income for the financial year – – (42,711) (15,096) 106,771 14,245 – – (23,702) 39,507
Total comprehensive income/(loss) for the financial year – 1,777,155 (42,711) (15,096) 106,771 14,245 – 72,795 234,793 2,147,952
Dividend paid to shareholder 36 – (249,300) – – – – – – – (249,300)
Dividend paid to non- controlling interests – – – – – – – – (497,560) (497,560)
Restricted profits – (889) – – – – 889 – – –
Share of associated companies’ issuance costs – – – – – – (8,987) – – (8,987)
Capital contribution from non-controlling interests, net of transaction costs – – – – – – (14,912) – 619,758 604,846
Deconsolidation of subsidiaries – 60,566 – – – – (60,566) – (2,477,761) (2,477,761)
Changes in ownership interest in subsidiaries with no change in control – – – – – – – – (6,185) (6,185)
Dilution of interest in subsidiaries to non- controlling interests – (6,187) – – – – 4,935 – (15,763) (17,015)
Perpetual securities − distribution paid – – – – – – – (72,977) – (72,977)
Tax credit arising from perpetual securities distribution 27 – 9,482 – – – – – – – 9,482
Total transactions with owners, recognised directly in equity – (186,328) – – – – (78,641) (72,977) (2,377,511) (2,715,457)
As at 31 March 2021 3,094,307 14,647,437 (96,637) 17,871 (61,303) 14,245 44,226 1,760,018 10,546,674 29,966,838
The accompanying notes form an integral part of these financial statements.
146 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 STATEMENT OF CHANGES IN EQUITY – GROUP FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Foreign currency Capital Non- Share Retained translation Revaluation Hedging and other Perpetual controlling Total Note capital earnings reserve reserve reserve reserves securities interests equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
As at 1 April 2019 3,094,307 11,615,191 (126,926) 28,047 (35,755) 17,607 1,760,018 11,995,951 28,348,440
Profit for the financial year – 1,705,494 – – – – 72,994 1,017,681 2,796,169
Other comprehensive income/ (loss) for the financial year – – 73,000 4,920 (132,319) – – 25,775 (28,624)
Total comprehensive income/ (loss) for the financial year – 1,705,494 73,000 4,920 (132,319) – 72,994 1,043,456 2,767,545
Dividend paid to shareholder 36 – (272,100) – – – – – – (272,100)
Dividend paid to non-controlling interests – – – – – – – (758,530) (758,530)
Restricted profits – (772) – – – 772 – – –
Share of associated companies’ issuance costs – – – – – (1,958) – – (1,958)
Capital contribution from non- controlling interests, net of transaction costs – – – – – 111,488 – 1,483,600 1,595,088
Disposal of subsidiaries – – – – – – – (1,078,521) (1,078,521)
Dilution of interest in subsidiaries to non-controlling interests – (706) – – – (4,982) – 3,436 (2,252)
Perpetual securities − distribution paid – – – – – – (72,812) – (72,812)
Tax credit arising from perpetual securities distribution 27 – 9,508 – – – – – – 9,508
Others – (5) – – – (60) – – (65)
Total transactions with owners, recognised directly in equity – (264,075) – – – 105,260 (72,812) (350,015) (581,642)
As at 31 March 2020 3,094,307 13,056,610 (53,926) 32,967 (168,074) 122,867 1,760,200 12,689,392 30,534,343
The accompanying notes form an integral part of these financial statements.
147 STATEMENT OF CHANGES IN EQUITY – COMPANY FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Share Retained Total Note capital earnings equity $’000 $’000 $’000
As at 1 April 2020 3,094,307 7,203,657 10,297,964
Total comprehensive income for the financial year – 491,298 491,298
Dividend paid 36 – (249,300) (249,300)
As at 31 March 2021 3,094,307 7,445,655 10,539,962
As at 1 April 2019 3,094,307 5,588,940 8,683,247
Total comprehensive income for the financial year – 1,886,817 1,886,817
Dividend paid 36 – (272,100) (272,100)
As at 31 March 2020 3,094,307 7,203,657 10,297,964
The accompanying notes form an integral part of these financial statements.
148 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2021 2020 $’000 $’000
Cash flows from operating activities Profit for the financial year 2,108,445 2,796,169 Adjustments for: – Income tax expense 395,613 322,726 – Depreciation and amortisation 40,024 59,077 – Net (gain)/loss on disposal of property, plant and equipment (3,667) 2,889 – Net gain on disposal of investment properties – (34,421) – Impairment loss on intangible assets 10,750 13,258 – Impairment loss on properties held for sale 3,497 – – Write-off of shareholder’s loan extended to an associated company – 1,357 – Fair value gain on financial assets, at FVPL (14) – – Fair value changes in derivative financial instruments (133,951) 144,187 – Gain on deconsolidation of subsidiaries (829,991) – – Net gain on disposal of subsidiaries, associated companies and joint ventures (43,183) (15,938) – Net revaluation gain on investment properties and properties under development (100,039) (1,258,441) – Finance costs – net and interest income from loans to non-related parties 474,781 675,409 – Share of profit of associated companies and joint ventures (261,318) (307,370) – Fee income of associated companies and joint ventures paid in units (41,261) – – Unrealised currency translation gains (42,804) (67,217) Operating cash flow before working capital changes 1,576,882 2,331,685
Changes in operating assets and liabilities – Trade and other receivables (15,913) (157,057) – Inventories 1,155 2,953 – Other assets 1,563 22,241 – Trade and other payables 28,178 343,818 – Properties held for sale (597,644) (80,641) Cash generated from operations 994,221 2,462,999 Income tax paid (282,088) (172,214) Net cash generated from operating activities 712,133 2,290,785
Cash flows from investing activities Acquisition of subsidiaries, net of cash acquired (684,097) (605,215) Disposal of subsidiaries, associated companies and joint ventures, net of cash disposed 76,703 1,635,822 Cash outflow from deconsolidation of subsidiaries (212,691) – Payments for investments in associated companies and joint ventures – (1,514,554) Loans to associated companies and joint ventures (7,664) (47,728) Dividends received from associated companies and joint ventures 189,078 169,186 Capital return from associated companies 384,870 375,659 Payments for investment properties (1,821,476) (2,842,539) (Payment for)/return of deposit for investment properties (142,337) 6,079 Proceeds from disposal of investment properties – 208,638 Payments for properties under development (1,494,332) (751,884) Prepayments for properties under development (132,971) (166,287) Payments for intangible assets and property, plant and equipment (13,094) (23,961) Proceeds from disposal of property, plant and equipment 6,451 1,476 Payments for financial assets, at FVOCI (6,046) (404) Proceeds from financial assets, at FVOCI 21,952 – Payments for financial assets, at FVPL (11,288) – Net (loan to)/repayment from a non-related party (1,432) 44,051 Interest received 24,609 32,370 Net cash used in investing activities (3,823,765) (3,479,291)
The accompanying notes form an integral part of these financial statements.
149 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
Note 2021 2020 $’000 $’000
Cash flows from financing activities Loan proceeds from financial institutions and TMK bonds 11,804,493 17,383,470 Repayment of loans from financial institutions (8,435,875) (16,083,019) Proceeds from issuance of medium term notes 308,146 888,490 Repayment of medium term notes (259,232) (148,313) Loan proceeds from non-controlling interests 1,175 1,950 Repayment of loans from non-controlling interests (18,466) (31,092) Principal payment of lease liabilities (38,788) (40,522) Perpetual securities distribution paid (72,977) (72,812) Net capital contribution from non-controlling interests 582,611 1,571,738 Acquisition of non-controlling interest (6,185) – Net outflow from dilution of interest in subsidiaries to non-controlling interests (16,989) (2,252) Cash dividend paid to non-controlling interests (475,325) (735,178) Dividends paid (249,300) (272,100) Interest paid (404,113) (681,930) Financing fees paid (8,755) (13,555) Increase in restricted cash (46,673) (26,694) Net cash generated from financing activities 2,663,747 1,738,181
Net (decrease)/increase in cash and cash equivalents (447,885) 549,675 Cash and cash equivalents at beginning of financial year 9 2,385,259 1,874,661 Effects of currency translation on cash and cash equivalents (13,744) (39,077) Cash and cash equivalents at end of financial year 9 1,923,630 2,385,259 RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
Loans from financial Medium Loans from institutions and term non-controlling Lease TMK bonds notes interests liabilities $’000 $’000 $’000 $’000
As at 1 April 2020 17,243,263 4,283,800 38,736 311,603 Proceeds 11,804,493 308,146 1,175 – Repayment (8,435,875) (259,232) (18,466) (50,380) Financing fees paid (8,755) – – – Non-cash changes: – Additions – – – 5,979 – Acquisition of subsidiaries (Note 40(a)) 479,485 – – – – Disposal of subsidiaries (Note 40(b)) (1,749,167) – – – – Deconsolidation of subsidiaries (Note 40(c)) (2,905,185) (408,098) – (27,041) – Disposal – – – (3,423) – Financing fees expense 16,317 1,111 – 11,592 – Currency translation differences (164,101) (45,688) 1,064 (3,586) As at 31 March 2021 16,280,475 3,880,039 22,509 244,744
As at 1 April 2019 19,841,816 3,499,695 68,643 296,000 Proceeds 17,383,470 888,490 1,950 – Repayment (16,083,019) (148,313) (31,092) (53,569) Financing fees paid (11,949) (1,606) – – Non-cash changes: – Additions – – – 67,543 – Acquisition of subsidiaries (Note 40(a)) 76,677 – – – – Disposal of subsidiaries (Note 40(b)) (4,346,601) – – (11,534) – Disposal – – – (3,242) – Financing fees expense 17,769 836 – 13,047 – Currency translation differences 365,100 44,698 (765) 3,358 As at 31 March 2020 17,243,263 4,283,800 38,736 311,603
The accompanying notes form an integral part of these financial statements.
150 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1. GENERAL INFORMATION
Mapletree Investments Pte Ltd (the “Company”) is incorporated and domiciled in Singapore. The address of its registered office is 10 Pasir Panjang Road, #13-01 Mapletree Business City, Singapore 117438.
The principal activities of the Company and its subsidiaries (the “Group”) are those relating to investment holding, provision of marketing consultancy and asset and fund management, property development and investment, marketing and lease administration and administrative and support services to related companies.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
These financial statements have been prepared in accordance with Singapore Financial Reporting Standards (International) (“SFRS(I)”) under the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with SFRS(I) requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
2.2 Interpretations and amendments to published standards effective in 2020
On 1 April 2020, the Group has adopted the new or amended SFRS(I) and Interpretations of SFRS(I) (“INT SFRS(I)”) that are mandatory for application for the financial year. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective SFRS(I) and INT SFRS(I).
The adoption of these new or amended SFRS(I) and INT SFRS(I) did not result in substantial changes to the Group’s accounting policies and had no material effect on the amounts reported for the current or prior financial years, except as follows:
(a) Amendments to SFRS(I) 9 Financial Instruments and SFRS(I) 7 Financial Instruments: Disclosures – Interest Rate Benchmark Reform
In accordance with the transition provisions, the Group has adopted the amendments to SFRS(I) 9 and SFRS(I) 7 on 1 April 2020 retrospectively to hedging relationships that existed at the start of the reporting period or were designated thereafter, and to the amount accumulated in the cash flow hedge reserve at that date. The amendments provide temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by interbank offered rate (“IBOR”) reform.
The Group has applied the following reliefs that were introduced by the amendments made to SFRS(I) 9:
• when considering the ‘highly probable’ requirement, the Group has assumed that the interest rates on which the Group’s hedged debt are based do not change as a result of IBOR reform;
• in assessing whether the hedge is expected to be highly effective on a forward-looking basis, the Group has assumed that the interest rates on which the cash flows of the hedged debt and the interest rate swap that hedges it are based are not altered by the IBOR reform; and
• the Group has not recycled the cash flow hedge reserve relating to the period after the reforms are expected to take effect.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2 Interpretations and amendments to published standards effective in 2020 (continued)
(a) Amendments to SFRS(I) 9 Financial Instruments and SFRS(I) 7 Financial Instruments: Disclosures – Interest Rate Benchmark Reform (continued)
The reliefs have the effect that IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness continues to be recorded in the income statement. The reliefs will cease to apply when the uncertainties arising from interest rate benchmark reform are no longer present.
A fundamental reform of major interest rate benchmarks is being undertaken globally to replace some of the interbank offered rates (“IBORs”) with alternative risk free rates. While the timing and the methods of transition of the IBORs are still uncertain, the Group has started to engage the existing lenders and derivative counterparties to plan the transition of the affected loans and derivatives.
Assumptions made
Cash flow hedge
In calculating the change in fair value, the Group assumes that the loans and related derivatives will progressively move to the replacement benchmark rates in the same time period and the spread adjustment between the current and the replacement benchmark rates will be on a similar basis.
No other material changes to the terms, other than the transition to the replacement benchmark rates, are anticipated.
Note 32(a)(iii) provides information about the uncertainty arising from IBOR reform for hedging relationships for which the Group has applied the reliefs. No changes were required to any of the amounts recognised in the current or prior period as a result of these amendments.
(b) Amendments to SFRS(I) 3 Business Combinations
The Group applied the amendments relating to the definition of a business to acquisitions whose acquisition dates are on or after 1 April 2020. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets.
2.3 Revenue recognition
(a) Leasing income
Leasing income from operating leases, adjusted for rent-free incentives and service charges from the investment properties, is recognised on a straight-line basis over the lease term.
Leasing income from corporate housing operations is recognised over the term of the leases, which are generally one year or less, net of occupancy and other taxes assessed by various governmental entities.
(b) Income from hotel operations
Revenue from hotel operations is recognised over time as the accommodation and related services are provided.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Revenue recognition (continued)
(c) Rendering of services
Service income from provision of property development, fund and asset management, marketing and lease administration and administrative and support services are recognised over time as the services are rendered under the terms of the contract, except for incentive fees which are recognised at a point in time when the performance targets as defined in each agreement are met and collectability is reasonably assured.
Car parking fees are recognised over time upon utilisation of the Group’s car parking facilities by tenants and visitors.
(d) Interest income
Interest income, including income arising from financial instruments, is recognised on a time-proportion basis using the effective interest method.
(e) Dividend income
Dividend income is recognised when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be reliably measured.
(f) Sale of residential properties
Revenue from the sale of residential properties is recognised when or as the control of the asset is transferred to the customer, such as when the property is accepted by the customer or deemed as accepted according to the contract or when title has passed to the customer.
2.4 Group accounting
(a) Subsidiaries
(i) Consolidation
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment indicator of the transferred asset. Accounting policies of subsidiaries have been aligned where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests and perpetual securities holders comprise the portion of a subsidiary’s net results of operations and its net assets, which are attributable to the interests that are not owned directly or indirectly by the equity holder of the Company. They are shown separately in the consolidated statement of profit or loss, statement of comprehensive income, statement of financial position and statement of changes in equity. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Group accounting (continued)
(a) Subsidiaries (continued)
(ii) Acquisitions
The Group may elect to apply the optional concentration test in SFRS(I) 3 to assess whether an acquisition must be accounted for as a business combination. When substantially all of the fair value of the gross assets acquired is concentrated in a single asset (or a group of similar assets), the transaction is accounted for as an asset acquisition. The consideration paid is allocated to the identifiable assets and liabilities acquired on the basis of their relative fair values at the acquisition date. Where an acquisition does not satisfy the concentration test and the acquired set of activities meets the definition of a business, the Group applies the acquisition method of accounting.
The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes any contingent consideration arrangement and any pre-existing equity interest in the subsidiary measured at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of (a) the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over (b) the fair value of the net identifiable assets acquired is recorded as goodwill. Please refer to Note 2.6(b) “intangible assets − goodwill on acquisitions” for the subsequent accounting policy on goodwill.
For acquisitions of subsidiaries which do not qualify as business combinations, the transactions are accounted for in accordance with the respective accounting policies for the assets acquired and the liabilities assumed.
(iii) Disposals
When a change in the Group’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings, if required by a specific Standard.
Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in profit or loss.
Please refer to Note 2.10 “investments in subsidiaries, associated companies and joint ventures” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company.
(b) Transactions with non-controlling interests
Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the subsidiary are accounted for as transactions with the equity owner of the Company. Any difference between the change in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised in capital and other reserves within equity attributable to the equity holder of the Company.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Group accounting (continued)
(c) Associated companies and joint ventures
Associated companies are entities over which the Group has significant influence, but not control, generally accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%.
Joint ventures are entities over which the Group has joint control as a result of contractual arrangements and rights to the net assets of the entities.
Investments in associated companies and joint ventures are accounted for in the consolidated financial statements using the equity method of accounting less impairment losses, if any.
(i) Acquisitions
Investments in associated companies and joint ventures are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies and joint ventures represents the excess of the cost of acquisition of the associated company or joint venture over the Group’s share of the fair value of the identifiable net assets of the associated company or joint venture and is included in the carrying amount of the investments.
(ii) Equity method of accounting
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of its associated companies’ or joint ventures’ post-acquisition profits or losses of the investee in profit or loss and its share of movements in other comprehensive income of the investee’s other comprehensive income. Dividends received or receivable from the associated companies or joint ventures are recognised as a reduction of the carrying amount of the investments. When the Group’s share of losses in an associated company or joint venture equals to or exceeds its interest in the associated company or joint venture, the Group does not recognise further losses, unless it has legal or constructive obligations to make, or has made payments on behalf of the associated company or joint venture. If the associated company or joint venture subsequently reports profits, the Group resumes recognising its share of those profits only after its share of the profits equals the share of losses not recognised. Interest in an associated company or joint venture includes any long-term loans for which settlement is never planned nor likely to occur in the foreseeable future.
Unrealised gains on transactions between the Group and its associated companies or joint ventures are eliminated to the extent of the Group’s interest in the associated companies or joint ventures. Unrealised losses are also eliminated unless the transactions provide evidence of impairment of the assets transferred. Gains or losses from transactions of investment properties (including those under redevelopment) or properties under development and measured at fair value (Note 2.8) are deemed as realised and therefore not eliminated.
The accounting policies of associated companies or joint ventures are changed where necessary to ensure consistency with the accounting policies adopted by the Group.
(iii) Disposals
Investments in associated companies or joint ventures are derecognised when the Group loses significant influence or joint control. If the retained equity interest in the former associated company or joint venture is a financial asset, the retained equity interest is measured at fair value. The difference between the carrying amount of the retained interest at the date when significant influence or joint control is lost and its fair value and any proceeds on partial disposal, is recognised in profit or loss.
Please refer to Note 2.10 “investments in subsidiaries, associated companies and joint ventures” for the accounting policy on investments in associated companies and joint ventures in the separate financial statements of the Company.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Property, plant and equipment
(a) Measurement
Leasehold land and building
Leasehold land and building relate to a hotel property owned by the Group. It is initially recognised at cost and subsequently carried at the revalued amount less accumulated depreciation and accumulated impairment losses. It is revalued by an independent professional valuer on an annual basis. When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the revalued amount of the asset.
Increases in carrying amounts arising from revaluation, including currency translation differences, are recognised in other comprehensive income and accumulated in equity, unless they reverse a revaluation decrease of the same asset previously recognised in profit or loss. In this case, the increase is recognised in profit or loss. Decreases in carrying amounts are recognised in other comprehensive income to the extent of any credit balance existing in the equity in respect of that asset and reduces the amount accumulated in equity. All other decreases in carrying amounts are recognised in profit or loss.
Other assets
Other assets comprise mainly furniture, machinery and office equipment. These assets are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. The cost includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
(b) Depreciation
Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:
Useful lives
Leasehold land and building Remaining lease period of 30 years from June 2016 Other assets 3 to 25 years
The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, as at each balance sheet date. The effects of any revision are recognised in profit or loss when the changes arise.
(c) Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance is recognised in profit or loss when incurred.
(d) Disposal
On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss. For the leasehold land and building carried at fair value, any amount in revaluation reserve is transferred to retained earnings directly.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.6 Intangible assets
(a) Acquired intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives. The amortisation period and amortisation method are at least reviewed annually as at each financial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates.
Intangible assets with indefinite useful lives or not yet available for use are not amortised. The useful life is reviewed annually to determine whether the indefinite useful life assessment continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when the asset is derecognised.
(i) Software licences
Acquired computer software licences are amortised to profit or loss using the straight-line method over their estimated useful lives of three to 10 years.
(ii) Customer-related intangibles
The customer-related intangibles acquired in business combinations include customer relationships, franchise agreements and management agreements. These customer-related assets bear definite useful lives of four to 13 years.
(iii) Concessionary agreement
A concessionary agreement was acquired in a business combination and relates to the public licences granted by Maritime and Port Authority of Singapore (“MPA”) to develop, maintain and operate passenger terminal facilities. The concessionary agreement expires on 30 September 2027 and has a useful life of 9.5 years commencing from March 2018.
(iv) Trade names
The trade names were acquired in business combination. The useful lives of the trade names are estimated to be indefinite because based on the current market share of the trade names, management believes there is no foreseeable limit to the period over which the trade names are expected to generate net cash inflows for the Group.
(b) Goodwill on acquisitions
Goodwill on acquisitions of subsidiaries or businesses represents the excess of (i) the sum of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over (ii) the fair value of the identifiable net assets acquired.
Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less accumulated impairment losses.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.6 Intangible assets (continued)
(b) Goodwill on acquisitions (continued)
Goodwill on acquisitions of associated companies and joint ventures represents the excess of the cost of the acquisition over the Group’s share of the fair value of the identifiable net assets acquired. Goodwill on associated companies and joint ventures is included in the carrying amount of the investments.
Gains and losses on disposal of subsidiaries, associated companies and joint ventures include the carrying amount of goodwill relating to the entity sold.
2.7 Borrowing costs
Borrowing costs are recognised in profit or loss using the effective interest method except for those costs that are directly attributable to the construction or development of properties and assets under construction. Such costs include costs on borrowings acquired specifically for the construction or development of properties and assets under construction as well as those in relation to general borrowings used to finance the construction or development of properties and assets under construction.
2.8 Investment properties and properties under development
Investment properties (including those under redevelopment) and properties under development are held for long-term lease yields and/or for capital appreciation and are not substantially occupied by the Group.
Investment properties are initially recognised at cost and subsequently carried at fair value, determined annually by management or independent professional valuers on the highest and best use basis. Changes in fair values are recognised in profit or loss.
Properties that are being constructed or developed for future use as investment properties are carried at fair value. Where the fair value of the investment properties under development cannot be reliably measured, the properties are measured at cost until the earlier of the completion date of construction or at the date which the fair value becomes reliably measurable.
Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised and the carrying amounts of the replaced components are recognised in profit or loss. The cost of maintenance, repairs and minor improvements is recognised in profit or loss when incurred.
If an investment property becomes substantially owner-occupied, it is reclassified to property, plant and equipment and its fair value at the date of reclassification becomes its cost for subsequent accounting purposes.
On disposal of an investment property, the difference between the disposal proceeds and the carrying amount is recognised in profit or loss.
2.9 Properties held for sale
Properties held for sale are those properties which are held with the intention of development and sale in the ordinary course of business. They are stated at the lower of cost or net realisable value. Net realisable value represents the estimated selling price in the ordinary course of business, less estimated costs of completion and selling expenses.
The cost of properties held for sale comprises specifically identified costs, including acquisition costs, development expenditure, capitalised borrowing costs and other related expenditures.
The aggregated costs incurred are presented as properties held for sale in the statement of financial position.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Investments in subsidiaries, associated companies and joint ventures
Investments in subsidiaries, associated companies and joint ventures are carried at cost less accumulated impairment losses in the Company’s statement of financial position. On disposal of such investments, the difference between disposal proceeds and the carrying amounts of the investments is recognised in profit or loss.
2.11 Impairment of non-financial assets
(a) Goodwill
Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash-generating-units (“CGU”) expected to benefit from synergies arising from the business combination.
An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value- in-use.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.
An impairment loss on goodwill is recognised as an expense and is not reversed in a subsequent period.
(b) Other non-financial assets
The Group’s other non-financial assets include other intangible assets, property, plant and equipment, right-of-use assets and investments in subsidiaries, associated companies and joint ventures.
For non-financial assets except for trade names with indefinite useful life, the Group assesses at each balance sheet date whether there is an indication that an asset may be impaired. If any such indication exists, the Group makes an estimate of the asset’s recoverable amount. Trade names with indefinite useful life are tested for impairment at least annually and whenever there is any objective evidence or indication that the trade names may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash inflows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.
An impairment loss for an asset other than goodwill is reversed only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount cannot exceed the carrying amount that would have been determined (net of any accumulated depreciation or amortisation) had no impairment loss been recognised for the asset in prior years.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.11 Impairment of non-financial assets (continued)
(b) Other non-financial assets (continued)
A reversal of impairment loss for an asset other than goodwill is recognised in the profit or loss unless the asset is measured at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised as an expense, a reversal of that impairment is also recognised in profit or loss.
2.12 Financial assets
(a) Classification and measurement
The Group classifies its financial assets in the following measurement categories:
• Amortised cost; • Fair value through other comprehensive income (“FVOCI”); and • Fair value through profit or loss (“FVPL”)
The classification depends on the Group’s business model for managing the financial assets as well as the contractual terms of the cash flows of the financial asset.
Financial assets with embedded derivatives are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
The Group reclassifies debt instruments when and only when its business model for managing those assets changes.
At initial recognition
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
At subsequent measurement
(i) Debt instruments
Debt instruments mainly comprise cash and cash equivalents and trade and other receivables.
There are two subsequent measurement categories, depending on the Group’s business model for managing the asset and the cash flow characteristics of the asset:
• Amortised cost: Debt instruments that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt instrument that is subsequently measured at amortised cost and is not part of a hedging relationship is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is included in interest income using the effective interest rate method.
• FVPL: Debt instruments that are held for trading as well as those that do not meet the criteria for classification as amortised cost or FVOCI are classified as FVPL. Movements in fair values and interest income are recognised in profit or loss in the period in which they arise and presented in “other gains/ (losses) – net and other income” and “interest income” respectively.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.12 Financial assets (continued)
(a) Classification and measurement (continued)
At subsequent measurement (continued)
(ii) Equity instruments
The Group subsequently measures all its equity investments at their fair values. Equity investments are classified as FVPL with movements in their fair values recognised in profit or loss in the period in which the changes arise and presented in “other gains/(losses) – net and other income”, except for those equity securities which are not held for trading. The Group has elected to recognise changes in fair values of equity securities not held for trading in other comprehensive income as these are strategic investments and the Group considers this to be more relevant. Movements in fair values of investments classified as FVOCI are presented as “fair value gains/losses” in other comprehensive income. Dividends from equity investments are recognised in profit or loss as “dividend income”.
(b) Impairment
The Group assesses on a forward-looking basis the expected credit losses associated with its debt instruments carried at amortised cost and FVPL. The impairment methodology applied depends on whether there has been a significant increase in credit risk. Note 32 details how the Group determines whether there has been a significant increase in credit risk.
For trade receivables and lease receivables, the Group applies the simplified approach permitted by SFRS(I) 9, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
(c) Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on trade date – the date on which the Group commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
On disposal of a debt instrument, the difference between the carrying amount and the sale proceeds is recognised in profit or loss. Any amount previously recognised in other comprehensive income relating to that asset is reclassified to profit or loss.
On disposal of an equity investment, the difference between the carrying amount and sales proceed is recognised in profit or loss if there was no election made to recognise fair value changes in other comprehensive income. If there was an election made, any difference between the carrying amount and sales proceed would be recognised in other comprehensive income and transferred to retained earnings along with the amount previously recognised in other comprehensive income relating to that asset.
2.13 Financial guarantees
The Company has issued corporate guarantees to financial institutions for borrowings of its subsidiaries and joint ventures. These guarantees are financial guarantees as they require the Company to reimburse the financial institutions if the subsidiaries or joint ventures fail to make principal or interest payments when due in accordance with the terms of their borrowings. Financial guarantee contracts are initially measured at fair value plus transaction costs and subsequently measured at the higher of:
(i) Amount initially recognised less the cumulative amount of income recognised in accordance with the principles of SFRS(I) 15; and
(ii) The amount of expected loss allowance computed using the impairment methodology under SFRS(I) 9.
Intra-group transactions are eliminated on consolidation.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.14 Borrowings
Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
Borrowings which are due to be settled within 12 months after the balance sheet date are presented as current borrowings even though the original term was for a period longer than 12 months and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the financial statements are authorised for issue. Other borrowings due to be settled more than 12 months after the balance sheet date are presented as non-current borrowings in the statement of financial position.
2.15 Trade and other payables
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). Otherwise, they are presented as non-current liabilities.
Trade and other payables are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method.
2.16 Derivative financial instruments and hedging activities
The Group holds derivative financial instruments such as interest rate swaps, currency forwards and cross currency interest rate swaps to hedge its interest rate and foreign currency risk exposures.
A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates each hedge as either: (a) cash flow hedge, (b) fair value hedge, or (c) net investment hedge.
Fair value changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise.
The Group documents, at the inception of the transaction, the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategies for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, on whether the hedging relationship meets the hedge effectiveness requirements under SFRS(I) 9.
The fair values of various derivative financial instruments used for hedging purposes are disclosed in Note 25. The carrying amount of a derivative designated as a hedge is presented as a non-current asset or liability if the remaining expected life of the hedged item is more than 12 months and as a current asset or liability if the remaining expected life of the hedged item is less than 12 months.
The following hedges in place qualified respectively as fair value, cash flow and net investment hedges under SFRS(I) 9.
162 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.16 Derivative financial instruments and hedging activities (continued)
(a) Cash flow hedge
(i) Interest rate swaps
The Group has entered into interest rate swaps that are cash flow hedges for the Group’s exposure to interest rate risk on its borrowings. These contracts entitle the Group to receive interest at floating rates on notional principal amounts and oblige the Group to pay interest at fixed rates on the same notional principal amounts, thus allowing the Group to raise borrowings at floating rates and swap them into fixed rates.
The fair value changes on the effective portion of interest rate swaps designated as cash flow hedges are recognised in other comprehensive income, accumulated in the hedge reserve and reclassified to profit or loss when the hedged interest expense on the borrowings is recognised in profit or loss. The fair value changes on the ineffective portion of interest rate swaps are recognised immediately in profit or loss.
(ii) Currency forwards
The Group has entered into currency forwards that qualify as cash flow hedges against highly probable forecasted transactions in foreign currencies. The fair value changes on the effective portion of the currency forwards designated as cash flow hedges are recognised in other comprehensive income. Amounts accumulated in equity are reclassified in the periods when the hedged item affects profit or loss, as follows:
• The gain or loss relating to the effective portion of the spot component of forward contracts is treated as follows: Where the hedged item subsequently results in the recognition of a non-financial asset, the deferred hedging gains and losses are included within the initial cost of the asset. The deferred amounts are ultimately recognised in profit or loss as the hedged item affects profit or loss.
• The fair value changes on the ineffective portion of currency forwards are recognised immediately in profit or loss. When a forecasted transaction is no longer expected to occur, the gains and losses that were previously recognised in other comprehensive income are reclassified to profit or loss immediately.
(iii) Cross currency interest rate swaps
The Group has entered into cross currency interest rate swaps that are cash flow hedges and they are used to reduce the Group’s exposure to interest rate risk and currency risk on its borrowings and interest.
The fair value changes on the effective portion of cross currency interest rate swaps designated as cash flow hedges are recognised in other comprehensive income, accumulated in the fair value reserve and reclassified to profit or loss when the hedged interest expense and/or exchange differences from the translation of the borrowings are recognised in profit or loss. The fair value changes on the ineffective portion of cross currency interest rate swaps are recognised immediately in profit or loss.
(b) Fair value hedge
The Group has entered into fixed to floating interest rate swaps that are fair value hedges for the fair value exposures to interest rate movements of its borrowings (“hedged item”). The fair value changes on the hedged item resulting from the fair value risk are recognised in profit or loss. The fair value changes on the effective portion of interest rate swaps designated as fair value hedges are recognised in profit or loss within the same line item as the fair value changes from the hedged item. The fair value changes on the ineffective portion of interest rate swaps are recognised separately in profit or loss.
163 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.16 Derivative financial instruments and hedging activities (continued)
(c) Net investment hedge
The Group has derivative financial instruments/borrowings that qualify as net investment hedges of foreign operations. These hedging instruments are accounted for similarly to cash flow hedges. The currency translation differences on the hedging instruments relating to the effective portion of the hedge are recognised in other comprehensive income in the consolidated financial statements, accumulated in the foreign currency translation reserve and reclassified to profit or loss as part of the gain or loss on disposal of the foreign operation. The currency translation differences relating to the ineffective portion of the hedge are recognised immediately in profit or loss.
2.17 Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the statement of financial position when there is a legally enforceable right to offset and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
2.18 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.
2.19 Leases
(a) When the Group is the lessee:
At the inception of the contract, the Group assesses if the contract contains a lease. A contract contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Reassessment is only required when the terms and conditions of the contract are changed.
Right-of-use assets
The Group recognises right-of-use assets and lease liabilities at the date which the underlying asset is available for use. Right-of-use assets are measured at cost which comprises the initial measurement of lease liabilities adjusted for any lease payments made at or before the commencement date and lease incentive received. Any initial direct costs that would not have been incurred if the lease had not been obtained are added to the carrying amount of the right-of-use assets.
Right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.
Right-of-use assets (except for those which meets the definition of an investment property) are presented within “property, plant and equipment”.
Right-of-use assets which meet the definition of an investment property is presented within “investment properties” and accounted for in accordance with Note 2.8.
164 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.19 Leases (continued)
(a) When the Group is the lessee: (continued)
Lease liabilities
Lease liabilities are initially measured at the present value of the lease payments discounted using the implicit rate in the lease, if the rate can be readily determined. If that rate cannot be readily determined, the Group shall use its incremental borrowing rate.
Lease payments include the following:
– Fixed payment (including in-substance fixed payments), less any lease incentives receivables; – The exercise price of a purchase option if it is reasonably certain to exercise the option; and – Payment of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
For contracts that contain both lease and non-lease components, the Group allocates the consideration to each lease component on the basis of the relative stand-alone price of the lease and non-lease component. The Group has elected not to separate lease and non-lease components for property leases and account these as one single lease component.
Lease liabilities are measured at amortised cost using the effective interest method. Lease liabilities shall be remeasured when:
– There is a change in future lease payments arising from changes in an index or rate; – There is a change in the Group’s assessment of whether it will exercise an extension option; or – There are modifications in the scope or the consideration of the lease that was not part of the original term.
Lease liabilities are remeasured with a corresponding adjustment to the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Short-term and low-value leases
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have lease terms of 12 months or less and leases of low-value assets. Lease payments relating to these leases are expensed to profit or loss on a straight-line basis over the lease term.
(b) When the Group is the lessor:
Lessor – Operating leases
Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are classified as operating leases. Leasing income from operating leases (net of any incentives given to lessees) is recognised in profit or loss on a straight-line basis over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the carrying amount of the leased assets and recognised as an expense in profit or loss over the lease term on the same basis as the leasing income.
Lessor – Subleases
The Group as an intermediate lessor classifies its sublease as operating leases with reference to the right-of-use asset arising from the head lease. The Group recognises lease income from subleases in profit or loss within “Revenue”. The right-of-use asset relating to the head lease is not derecognised.
165 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.20 Income taxes
Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, associated companies and joint ventures, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.
Deferred income tax is measured:
(i) At the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and
(ii) Based on the tax consequence that will follow from the manner in which the Group expects, as at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities except for investment properties. Investment properties measured at fair value are presumed to be recovered entirely through sale.
Current and deferred income taxes are recognised as income or expenses in profit or loss, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.
2.21 Employee compensation
Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.
(a) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.
(b) Share-based compensation
The Group operates the following share-based compensation plans:
(i) Company
The Company operates the Mapletree Performance Share Units Plan (“Mapletree PSU Plan”), Mapletree Restricted Share Units Plan (“Mapletree RSU Plan”) and Mapletree NED Restricted Share Units Plan (“Mapletree NED RSU Plan”).
166 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.21 Employee compensation (continued)
(b) Share-based compensation (continued)
(ii) Subsidiaries
The Group’s wholly-owned subsidiaries, Mapletree Logistics Trust Management Ltd, Mapletree Industrial Trust Management Ltd, Mapletree Commercial Trust Management Ltd and Mapletree North Asia Commercial Trust Management Ltd, each operate a Performance Share Units Plan (“REIT PSU Plan”) and a Restricted Share Units Plan (“REIT RSU Plan”).
Equity-settled share-based compensation is measured at the fair value at the date of grant, whereas cash-settled share- based compensation is measured at the current fair value as at each balance sheet date. In estimating the fair value of the compensation cost at grant date, market-based performance conditions are taken into account. The compensation cost is recognised as an expense in profit or loss on a basis that fairly reflects the manner in which the benefits will accrue to the employees under the respective plans over the vesting period.
For equity-settled share-based compensation, any change in the fair value of the compensation cost as at the balance sheet date, arising from a change in the estimate of the number of rights/units that are expected to become exercisable on the vesting date, is recognised in profit or loss with a corresponding adjustment to the share compensation reserve over the remaining vesting period.
For cash-settled share-based compensation, any change in the fair value of the compensation cost, arising from the re- measurement of liability as at each balance sheet date, is recognised in profit or loss with a corresponding adjustment to the liability over the remaining vesting period.
When an equity-settled share-based compensation award is modified to become a cash-settled award, this is accounted for as a repurchase of an equity interest. Any excess over the fair value at the date of the grant is treated as a deduction from equity, provided the deduction is not greater than the fair value of the equity instruments when measured at the modification date. Until the liability is settled, it is re-measured as at each balance sheet date with changes in fair value recognised in profit or loss.
The compensation cost for the respective PSU Plans and RSU Plans is measured based on the latest estimate of the number of units that will be awarded based on non-market vesting conditions at each balance sheet date. Any increase or decrease in compensation cost over the previous estimate is recognised in profit or loss, with a corresponding adjustment to the share compensation reserve or liability for equity-settled units and cash-settled units respectively. The compensation cost for the Mapletree NED RSU Plan is based on the number of units awarded at the date of grant. Any increase or decrease in compensation cost over the previous estimate is recognised in profit or loss, with a corresponding adjustment to the share compensation reserve or liability for equity-settled units and cash-settled units respectively.
Where the terms of the share-based compensation plans are modified, the expense that is not yet recognised for the award is recognised over the remaining vesting period as if the terms had not been modified. Additional expense is recognised for any increase in the total fair value of the rights/units due to the modification, as measured at the date of the modification.
167 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.22 Currency translation
(a) Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollars, which is the functional currency of the Company.
(b) Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency exchange differences resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates as at the balance sheet date are recognised in profit or loss. However, in the consolidated financial statements, currency translation differences arising from borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges and net investment in foreign operations, are recognised in other comprehensive income and accumulated in the foreign currency translation reserve.
When a foreign operation is disposed of or any loan forming part of the net investment of the foreign operation is repaid, a proportionate share of the accumulated foreign currency translation differences is reclassified to profit or loss, as part of the gain or loss on disposal.
Foreign exchange gains and losses are presented in profit or loss within “other gains/(losses) – net and other income”.
Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.
(c) Translation of Group entities’ financial statements
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities are translated at the closing exchange rates as at the balance sheet date;
(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and
(iii) All resulting currency translation differences are recognised in other comprehensive income and accumulated in the foreign currency translation reserve. These currency translation differences are reclassified to profit or loss on disposal or partial disposal with loss of control of the foreign operation of the entity giving rise to such reserve.
Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and translated at the closing rates as at the balance sheet date.
168 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.23 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Executive Management Committee (“EMC”) whose members are responsible for allocating resources and assessing performance of the operating segments.
2.24 Cash and cash equivalents
For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash at bank and on hand, deposits with financial institutions and bank overdrafts. Bank overdrafts are presented as current borrowings on the statement of financial position. For cash subjected to restriction, assessment is made on the economic substance of the restriction and whether they meet the definition of cash and cash equivalents.
2.25 Share capital and perpetual securities
Ordinary shares, perpetual securities and redeemable preference shares are classified as equity when there is no contractual obligation to deliver cash or other financial assets to another person or entity or exchange financial assets or liabilities with another person or entities that are potentially unfavourable to the issuer.
Incremental costs directly attributable to the issue of new ordinary or redeemable preference shares or perpetual securities are shown in equity as a deduction, net of tax, from proceeds. The proceeds received net of any directly attributable transaction costs are credited to share capital or perpetual securities.
2.26 Dividends
Dividends to the Company’s shareholder are recognised when the dividends are approved for payment.
2.27 Government grants
Government grants are recognised as receivables at their fair value where there is a reasonable assurance that the grants will be received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis.
169 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
3. CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS
Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
(a) Fair value of investment properties, properties under development and leasehold land and building classified under property, plant and equipment
Investment properties (Note 18), properties under development (Note 19) and leasehold land and building classified under property, plant and equipment (Note 20) (collectively known as “properties”) are stated at fair value based on valuations primarily by independent professional valuers. The fair values are based on the highest and best use basis.
The valuers have considered valuation techniques including the income capitalisation method, discounted cash flows method, direct comparison method and residual value method, where appropriate (Note 33).
The valuation reports obtained from independent valuers for certain properties have highlighted that, with the heightened uncertainty of the COVID-19 outbreak, a degree of caution should be attached to the valuations as they may be subjected to more fluctuation subsequent to 31 March 2021 than during normal market conditions.
The fair values of properties are as disclosed in the respective notes.
(b) Control assessment of investment in Mapletree Industrial Trust (“MIT”), Mapletree Redwood Data Centre Trust (“MRDCT”) and Mapletree Rosewood Data Centre Trust (“MRODCT”)
Under SFRS(I) 10 Consolidated Financial Statements, control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Significant judgement is applied in assessing the extent of control and level of exposure to variable returns that would give rise to control.
In the current financial year, the Group reviewed the control assessment of its investment in MIT following a dilution of its interest subsequent to an equity fund raising exercise by MIT in July 2020. Having considered that the Manager of MIT is a wholly-owned subsidiary of the Group, management evaluated the Group’s overall exposure to variable returns arising from both the REIT Manager’s remuneration and its interest in MIT, and the sustainability of such returns. It was concluded that the Group does not have sufficient interest to control MIT and accordingly, the investment in MIT was accounted for as an investment in an associated company from the date that control was lost.
The Group further reviewed the extent of its control over MRDCT and MRODCT, joint ventures between the Group and MIT that were accounted for as investments in subsidiaries as at 31 March 2020. Following the loss of control in MIT, the Group assessed that control over MRDCT and MRODCT was also lost as the Group does not have the ability to affect the variable returns from MRDCT and MRODCT without unanimous consent from MIT. The investments in MRDCT and MRODCT were therefore accounted for as investments in joint ventures from the date that control over MIT was lost.
(c) Income tax
The Group has exposure to taxes in numerous jurisdictions. In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes may be due. Significant estimates and assumptions are required to determine the amount of current and deferred tax that can be recognised and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.
The carrying amounts of current income tax liabilities and deferred income taxes are as disclosed in the statement of financial position.
170 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
4. REVENUE
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Leasing income – Investment properties 1,991,812 2,628,772 – – – Corporate housing operations 66,972 424,262 – – Income from hotel operations 6,186 34,095 – – Sale of residential properties 180,592 2,524 – – Service charge 294,127 424,901 – – Fees from management services – Subsidiaries – – 98,107 119,931 – Others 161,371 232,448 – – Car parking fees 36,272 63,058 – – Dividend income from subsidiaries – – 646,603 1,910,564 Interest income from loans to non-related parties 3,873 13,658 – – Government grant income (Note (a)) 68,425 – – – Less: Government grant expense (Note (b)) (63,202) – – – Other operating income 135,404 206,293 3,519 3,600 2,881,832 4,030,011 748,229 2,034,095
(a) Government grant income
Government grant income relates mainly to property tax rebates and cash grants received from the Singapore Government to help businesses cope with the impact from COVID-19.
For the property tax rebates received where the Group is a lessor, the Group is obliged to pass on the benefits to its tenants and has transferred these to the tenants in the form of rent rebates during the current financial year. For cash grants, the Group is obliged to waive up to two months of rental to eligible tenants.
(b) Government grant expense
Government grant expense relates to the property tax rebates received from the Singapore Government that were transferred to tenants in the form of rent rebates during the financial year and rental waivers provided to eligible tenants as part of the qualifying conditions of the cash grant.
171 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
5. OTHER GAINS/(LOSSES) – NET AND OTHER INCOME
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
(Allowance for)/reversal of impairment loss in subsidiaries – – (100,443) 21,186 Net revaluation gain on investment properties and properties under development 100,039 1,258,441 – – Net gain on disposal of: – Investment properties – 34,421 – – – Subsidiaries, associated companies and joint ventures (Note 40(b)) 43,183 15,938 – – 43,183 50,359 – – Gain on deconsolidation of subsidiaries (Note 40(c)) 829,991 – – – Impairment loss on intangible assets (Note 23) (10,750) (13,258) – – Impairment loss on properties held for sale (Note 11) (3,497) – – – Net currency exchange (loss)/gain (189,530) 105,558 – – Net change in fair value of derivative financial instruments 133,951 (144,187) – – Fair value gain on financial assets, at FVPL (Note 14) 14 – – – Restructuring costs (957) (26,177) – – Write-off of shareholder’s loan extended to an associated company – (1,357) – – Insurance proceeds relating to claims for property damage and revenue loss due to business interruption at a subsidiary 46,393 – – – 948,837 1,229,379 (100,443) 21,186
6. EMPLOYEE COMPENSATION
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Wages and salaries 260,355 470,850 95,181 225,761 Employer’s contribution to defined contribution plans including Central Provident Fund (“CPF”) 20,572 20,980 10,686 10,897 Share-based compensation expenses 79,653 22,215 57,808 11,914 360,580 514,045 163,675 248,572
172 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
7. FINANCE (COSTS)/INCOME − NET
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Interest expense – Loans from financial institutions (262,638) (544,697) – – – Derivative instruments − hedge accounting (50,201) (2,276) – – – Derivative instruments − non-hedge accounting (33,567) (14,407) – – – Medium term notes (116,488) (119,554) – – – Loans from non-controlling interests (1,435) (2,685) – – – Lease liabilities (11,592) (13,047) (246) (367) (475,921) (696,666) (246) (367)
Financing fees (17,428) (18,605) – –
Interest income for financial assets measured at amortised cost – Deposits placed with subsidiaries – – 45,263 111,695 – Short-term bank deposits 10,813 16,363 15 89 – Others 3,882 9,841 – – 14,695 26,204 45,278 111,784
(478,654) (689,067) 45,032 111,417
8. INCOME TAX EXPENSE/(CREDIT)
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Tax expense/(credit) attributable to profit is made up of: Profit for the financial year: Current income tax 183,415 188,694 – 10,910 Deferred income tax 167,139 90,614 (4,269) (16,262) Withholding tax 55,053 45,974 – – 405,607 325,282 (4,269) (5,352)
(Over)/underprovision in prior financial years: – Current income tax (2,307) (7,714) (2,557) (2,263) – Deferred income tax (7,687) 5,158 – – 395,613 322,726 (6,826) (7,615)
173 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
8. INCOME TAX EXPENSE/(CREDIT) (CONTINUED)
The income tax expense/(credit) on the Group’s and the Company’s profit before tax differs from the theoretical amount that would arise using the Singapore standard rate of income tax due to the following:
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Profit before income tax 2,504,058 3,118,895 484,472 1,879,202 Share of results of associated companies and joint ventures, net of tax (261,318) (307,370) – – Profit before share of results of associated companies and joint ventures 2,242,740 2,811,525 484,472 1,879,202
Tax calculated at a tax rate of 17% (2020: 17%) 381,266 477,959 82,360 319,464 Effects of: – Singapore statutory stepped income exemption and concessionary tax rate (6,066) (13,745) – (32) – Income not subject to tax (210,431) (355,808) (112,583) (328,466) – Expenses not deductible for tax purposes 115,229 126,106 22,910 3,682 – Effects of different tax rates in other countries 96,468 60,330 – – – Deferred tax benefits not recognised 24,511 25,785 3,044 – – Overprovision in prior financial years (9,994) (2,556) (2,557) (2,263) – Others 4,630 4,655 – – Tax expense/(credit) 395,613 322,726 (6,826) (7,615)
9. CASH AND CASH EQUIVALENTS
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Cash at bank and on hand 1,528,301 1,904,573 36,535 23,661 Short-term bank deposits 492,967 535,486 3,000 – 2,021,268 2,440,059 39,535 23,661
Group 2021 2020 $’000 $’000
Cash and bank balances (as above) 2,021,268 2,440,059 Less: Restricted cash (97,638) (54,800) Cash and cash equivalents per consolidated statement of cash flows 1,923,630 2,385,259
Restricted cash are cash reserves which are required to be maintained for use in capital expenditure, loan repayment, interest expense and certain property related expenses to ensure these liabilities can be met when incurred.
174 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
10. TRADE AND OTHER RECEIVABLES Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Current Trade receivables: – Subsidiaries – – 3,208 3,242 – Associated companies 49,676 27,893 – – – Non-related parties 79,772 117,362 – – 129,448 145,255 3,208 3,242 Less: Loss allowance on receivables from non-related parties (15,224) (9,925) – – Trade receivables − net 114,224 135,330 3,208 3,242
Non-trade receivables: – Subsidiaries – – 396,581 398,257
Interest receivable: – Subsidiaries – – 5,810 33,081 – Non-related parties 3,920 9,961 – – 3,920 9,961 5,810 33,081
Dividend receivable 150,074 39,415 156,200 935,500
Deposits placed with a subsidiary – – 7,808,969 6,557,350
Loans: – Joint venture – 24,221 – – – Non-controlling interest – 161,227 – – – 185,448 – –
Value-added tax − net 199,552 120,790 587 1,268 Sundry receivables 56,579 71,102 – – Accrued revenue 140,122 298,528 – – 396,253 490,420 587 1,268
664,471 860,574 8,371,355 7,928,698
Non-current Non-trade receivables: – Associated companies 2,129 2,191 – –
Loans: – Subsidiaries – – 1,089,599 1,200,568 – Associated company 42,568 31,606 – – – Joint venture 92,485 77,758 – – 135,053 109,364 1,089,599 1,200,568
Advance tax recoverable 11,637 – – –
148,819 111,555 1,089,599 1,200,568
813,290 972,129 9,460,954 9,129,266
175 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
10. TRADE AND OTHER RECEIVABLES (CONTINUED)
Current
(a) Non-trade receivables due from subsidiaries are unsecured, interest-free and repayable on demand.
(b) Deposits placed with a subsidiary mature within five months (2020: five months) from the end of the financial year. The effective interest rates of the deposits as at the balance sheet date ranged from 0.22% to 0.29% (2020: 0.98% to 1.75%) per annum. The interest rates are re-priced upon maturity.
(c) The loan to a joint venture was unsecured, bore interest ranging from 4.24% to 4.26% per annum and was repaid during the financial year.
(d) The loan to non-controlling interest was secured, bore interest at 1% per annum and was repaid during the financial year. The loan formed part of the consideration for the Group’s acquisition of a land parcel in Japan from the non-controlling interest.
Non-current
(a) Non-trade receivables due from associated companies are unsecured, interest-free and repayment is not expected within the next 12 months.
(b) Loans to subsidiaries are unsecured, interest-free and have no fixed terms of repayment, although repayment is not expected within the next 12 months.
(c) The loan to an associated company is unsecured, bears interest at 2.04% per annum and repayment is not expected within the next 12 months.
(d) The loan to a joint venture amounting to $47.6 million (2020: $25.3 million) is unsecured, bears interest of 1.44% per annum and is repayable in full in December 2024. The remaining balance of the loan of $44.9 million (2020: $52.5 million) is unsecured, interest-free and repayment is not expected within the next 12 months.
11. PROPERTIES HELD FOR SALE
Group 2021 2020 $’000 $’000
Properties under development, units for which revenue is recognised at a point in time: Land and other related costs 692,330 32,174 Development costs, interest expense, property tax and others 5,406 122,579 Properties under development 697,736 154,753
Completed development properties, at cost 105,852 51,191 Less: Allowance for foreseeable losses (3,444) – Completed development properties 102,408 51,191
Total properties held for sale 800,144 205,944
176 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
11. PROPERTIES HELD FOR SALE (CONTINUED)
Movements in allowance for foreseeable losses are as follows:
Group 2021 2020 $’000 $’000
As at 1 April – – Allowance during the financial year (Note 5) (3,497) – Translation differences 53 – As at 31 March (3,444) –
As at 31 March 2021, no properties held for sale were mortgaged to banks to secure credit facilities of the Group.
12. OTHER ASSETS
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Current Deposits 42,653 45,742 569 610 Prepayments 357,893 360,197 2,100 1,556 400,546 405,939 2,669 2,166
Non-current Deposits 4,667 3,135 – – Prepayments 11,995 1,928 – – Others 6,266 – – – 22,928 5,063 – –
423,474 411,002 2,669 2,166
Included in the above prepayments are the following transactions which are pending receipt of their land building certificates from the respective authorities. Accordingly, the considerations paid are classified as prepayments as at the balance sheet date.
Group 2021 2020 Nature Country No. $’000 No. $’000
Acquired land parcels China 8 65,924 7 35,975 Completed development China/Japan 1 128,252 1 141,461 194,176 177,436
177 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
13. FINANCIAL ASSETS, AT FVOCI
Group 2021 2020 $’000 $’000
As at 1 April 69,973 69,564 Addition 6,046 404 Disposal/redemption (21,952) – Fair value gain 14,245 – Currency translation differences (134) 5 As at 31 March 68,178 69,973
Unquoted equity securities 68,178 69,973
14. FINANCIAL ASSETS, AT FVPL
Group 2021 2020 $’000 $’000
As at 1 April 48,742 93,553 Additions 29,559 5,766 Repayments (16,839) (49,817) Fair value gain (Note 5) 14 – Currency translation differences (422) (760) As at 31 March 61,054 48,742
Equity securities Non-current 244 –
Debt instruments Current 9,503 – Non-current 51,307 48,742 60,810 48,742
Included in debt instruments are loans to non-related parties of $49.7 million (2020: $48.7 million) which are secured, bear interest at 7% (2020: 7%) per annum and are repayable between September 2021 and January 2023 (2020: between September 2020 and January 2023).
178 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
15. INVESTMENTS IN ASSOCIATED COMPANIES
Group 2021 2020 $’000 $’000
Investments in associated companies 3,864,469 2,194,090
The following represents the aggregate amount of the Group’s share in the net profit and total comprehensive income of associated companies:
Group 2021 2020 $’000 $’000
Net profit 191,833 232,761 Other comprehensive income, net of tax 36,142 19,257 Total comprehensive income 227,975 252,018
Set out below are the associated companies that are material to the Group.
% of ownership Principal place interest Name of entity Principal activities of business 2021 2020
Mapletree Industrial Trust Real estate investment fund which invests Singapore 27 29* in assets primarily for industrial purposes in Singapore and data centres worldwide
Mapletree US & EU Private equity fund which invests in logistics The United States/ 34 33 Logistics Private Trust properties in the United States and across Europe Europe
* Mapletree Industrial Trust was accounted for as a subsidiary in the prior financial year (Note 17).
Summarised financial information for associated companies
Summarised balance sheet
Mapletree Mapletree US & EU Industrial Trust Logistics Private Trust 2021 2021 2020 $’000 $’000 $’000
Current assets 249,069 377,150 404,064 Current liabilities (477,869) (134,748) (122,699) Non-current assets 6,142,550 6,494,755 6,278,704 Non-current liabilities (2,018,750) (3,649,819) (3,701,725)
179 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
15. INVESTMENTS IN ASSOCIATED COMPANIES (CONTINUED)
Summarised statement of comprehensive income
Mapletree Mapletree US & EU Industrial Trust Logistics Private Trust 2021 2021 2020 $’000 $’000 $’000
Revenue 348,097 466,685 39,722 Profit from continuing operations 92,002 440,873 276,314 Other comprehensive income/(loss) 26,867 (51,324) 29,506 Total comprehensive income 118,869 389,549 305,820
The information above reflects the amounts presented in the financial statements of the associated companies (and not the Group’s share of those amounts), adjusted for differences in accounting policies between the Group and the associated companies.
The following table summarises, in aggregate, the Group’s share of profit and other comprehensive income of the Group’s individually immaterial associated companies accounted for using the equity method:
2021 2020 $’000 $’000
Profit from continuing operations 18,554 140,770 Other comprehensive income 52,977 8,478 Total comprehensive income 71,531 149,248
Reconciliation of summarised financial information
Reconciliation of summarised financial information presented, to the carrying amount of the Group’s interest in associated companies, is as follows:
Mapletree Mapletree US & EU Industrial Trust Logistics Private Trust Total 2021 2021 2020 2021 2020 $’000 $’000 $’000 $’000 $’000
Net assets 3,895,000 3,087,338 2,858,344 6,982,338 2,858,344
Group’s equity interest 27% 34% 33% Group’s share of net assets 1,070,735 1,038,272 950,370 2,109,007 950,370
Fair value measurement gain 810,531 – – 810,531 –
Carrying value 1,881,266 1,038,272 950,370 2,919,538 950,370
Add: Carrying value of individually immaterial associated companies, in aggregate 944,931 1,243,720
Carrying value of Group’s interest in associated companies 3,864,469 2,194,090
180 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
16. INVESTMENTS IN JOINT VENTURES
Group 2021 2020 $’000 $’000
Investments in joint ventures 584,016 1,334,589
The Group’s investments in joint ventures and share of results individually and cumulatively represent less than 5% of the Group’s consolidated net assets and net profit.
The following represents the aggregate amount of the Group’s share in the net profit and total comprehensive income of joint ventures:
Group 2021 2020 $’000 $’000
Net profit 69,485 74,609 Other comprehensive (loss)/income, net of tax (6,658) 22,835 Total comprehensive income 62,827 97,444
17. INVESTMENTS IN SUBSIDIARIES
Company 2021 2020 $’000 $’000
Investments in subsidiaries 1,606,836 1,606,836 Less: Accumulated impairment losses (242,077) (141,634) 1,364,759 1,465,202
Details of significant subsidiaries and summarised financial information of subsidiaries with material non-controlling interests are disclosed in Note 38 and Note 39 respectively.
Control without majority equity interest and voting power
For the financial year ended 31 March 2021, the Group has assessed that it controls Mapletree Commercial Trust (“MCT”), Mapletree North Asia Commercial Trust (“MNACT”) and Mapletree Logistics Trust (“MLT”) (collectively the “REITs”) although the Group owns less than half of the equity interest and voting power of the REITs as disclosed in Note 38. The activities of the REITs are managed by the Group’s wholly-owned subsidiaries, namely Mapletree Commercial Trust Management Ltd, Mapletree North Asia Commercial Trust Management Ltd and Mapletree Logistics Trust Management Ltd respectively (collectively the “REIT Managers”). The REIT Managers have decision-making authority over the REITs subject to oversight by the trustees of the respective REITs. The Group’s overall exposure to variable returns, both from the REIT Managers’ remuneration and their interests in the REITs, is significant and any decisions made by the REIT Managers affect the Group’s overall exposure. Accordingly, the Group concluded that it has control over the REITs and consolidated these investees. Summarised financial information of the REITs is disclosed in Note 39.
As disclosed in Note 3(b), the Group has assessed that control over MIT, MRDCT and MRODCT was lost during the current financial year. Summarised financial information of MIT, which has been assessed to be a material associated company of the Group for the current financial year, is disclosed in Note 15. Summarised financial information of MIT as a subsidiary with material non-controlling interests for the financial year ended 31 March 2020 is disclosed in Note 39.
181 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
18. INVESTMENT PROPERTIES
Group 2021 2020 $’000 $’000
Completed investment properties As at 1 April 46,017,023 47,011,696 Additions 2,184,411 3,465,042 Acquisition of subsidiaries (Note 40(a)) 1,811,919 691,110 Disposals – (182,617) Disposal of subsidiaries (Note 40(b)) (1,969,100) (7,348,944) Deconsolidation of subsidiaries (Note 40(c)) (6,419,430) – Transfer to properties under development (Note 19) (49,305) (3,727) Transfer from properties under development (Note 19) 1,263,439 567,099 Transfer from investment properties under redevelopment 316,205 86,491 Net revaluation gain recognised in profit or loss 64,017 1,088,545 Currency translation differences (326,428) 642,328 As at 31 March 42,892,751 46,017,023
Investment properties under redevelopment As at 1 April 354,113 212,693 Additions 22,142 52,396 Transfer to completed investment properties (316,205) (86,491) Net revaluation gain recognised in profit or loss 4,337 175,441 Currency translation differences 292 74 As at 31 March 64,679 354,113
Total investment properties 42,957,430 46,371,136
(a) The following amounts are recognised in profit or loss: Group 2021 2020 $’000 $’000
Leasing income 1,991,812 2,628,772 Direct operating expenses arising from investment properties that generated leasing income (467,581) (680,861)
(b) The revaluation gain of investment properties recognised in profit or loss comprises the following: Group 2021 2020 $’000 $’000
Fair value change of investment properties 68,354 1,263,986 Effect of lease incentive and marketing commission amortisation (997) (73,281) Revaluation gain recognised in profit or loss 67,357 1,190,705
182 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
18. INVESTMENT PROPERTIES (CONTINUED)
(c) Certain investment properties of the Group, amounting to $5,079.9 million (2020: $4,035.1 million) are mortgaged to secure loans from financial institutions (Note 26).
(d) The fair value hierarchy, valuation process, techniques and inputs used to determine the fair values of investment properties and properties under development (Note 19) are disclosed in Note 33.
(e) As at 31 March 2021, the fair values of the investment properties and properties under development (Note 19) have been determined primarily by independent professional valuers. These valuers have appropriate professional qualifications and experience in the location and category of the properties being valued. It is the intention of the Group to hold the investment properties and properties under development (Note 19) on a long-term basis.
(f) Right-of-use of assets acquired under leasing arrangements are presented together with the owned assets of the same class. Details of such leased assets are disclosed in Note 21.
19. PROPERTIES UNDER DEVELOPMENT Group 2021 2020 $’000 $’000
As at 1 April 1,129,656 804,970 Additions 1,577,414 822,697 Acquisition of subsidiaries (Note 40(a)) 116,435 – Transfer to completed investment properties (Note 18) (1,263,439) (567,099) Transfer from completed investment properties (Note 18) 49,305 3,727 Disposal of subsidiaries (Note 40(b)) (57,576) (4,409) Net revaluation gain recognised in profit or loss 32,682 67,736 Currency translation differences 21,839 2,034 As at 31 March 1,606,316 1,129,656
During the financial year, finance costs capitalised as part of cost of properties under development amounted to $7.1 million (2020: $9.4 million).
183 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
20. PROPERTY, PLANT AND EQUIPMENT
Group Leasehold land Other and building assets Total $’000 $’000 $’000
Cost or valuation As at 1 April 2019 183,678 67,874 251,552 Additions 16,401 28,397 44,798 Acquisition of subsidiaries (Note 40(a)) – 29 29 Write-offs/Disposals (6,409) (21,888) (28,297) Disposal of subsidiaries (Note 40(b)) – (1,081) (1,081) Revaluation gain 4,890 – 4,890 Revaluation adjustment (5,613) – (5,613) Currency translation differences 4,007 985 4,992 As at 31 March 2020 196,954 74,316 271,270 Additions 977 9,263 10,240 Write-offs/Disposals (5,321) (2,122) (7,443) Disposal of subsidiaries (Note 40(b)) – (109) (109) Deconsolidation of subsidiaries (Note 40(c)) – (299) (299) Revaluation loss (20,329) – (20,329) Revaluation adjustment (4,904) – (4,904) Currency translation differences (4,953) (616) (5,569) As at 31 March 2021 162,424 80,433 242,857
Comprising: 31 March 2020 At cost 34,699 74,316 109,015 At valuation 162,255 – 162,255 196,954 74,316 271,270
31 March 2021 At cost 29,939 80,433 110,372 At valuation 132,485 – 132,485 162,424 80,433 242,857
Accumulated depreciation As at 1 April 2019 – 29,106 29,106 Depreciation 16,767 19,570 36,337 Write-offs/Disposals (2,733) (18,827) (21,560) Disposal of subsidiaries (Note 40(b)) – (185) (185) Revaluation adjustment (5,613) – (5,613) Currency translation differences 413 2,524 2,937 As at 31 March 2020 8,834 32,188 41,022 Depreciation 12,243 15,156 27,399 Write-offs/Disposals (3,674) (985) (4,659) Disposal of subsidiaries (Note 40(b)) – (81) (81) Deconsolidation of subsidiaries (Note 40(c)) – (149) (149) Revaluation adjustment (4,904) – (4,904) Currency translation differences (708) (376) (1,084) As at 31 March 2021 11,791 45,753 57,544
Net book value As at 31 March 2020 188,120 42,128 230,248 As at 31 March 2021 150,633 34,680 185,313
184 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
20. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The leasehold land and building of the Group with a carrying value of $132.5 million (2020: $162.3 million) are carried at the revalued amount in accordance with the Group’s accounting policy as described in Note 2.5. If the leasehold land and building were included in the financial statements at cost less accumulated depreciation and impairment losses, the net book value would have been $108.9 million (2020: $122.0 million).
Right-of-use of assets acquired under leasing arrangements are presented together with the owned assets of the same class. Details of such leased assets are disclosed in Note 21.
Company Building Other assets Total $’000 $’000 $’000
Cost As at 1 April 2019 17,372 32,830 50,202 Additions – 5,241 5,241 Disposals – (2,328) (2,328) As at 31 March 2020 17,372 35,743 53,115 Additions 24,685 1,975 26,660 Disposals (12,837) (959) (13,796) As at 31 March 2021 29,220 36,759 65,979
Accumulated depreciation As at 1 April 2019 – 23,422 23,422 Depreciation 8,584 5,396 13,980 Disposals – (2,223) (2,223) As at 31 March 2020 8,584 26,595 35,179 Depreciation 8,788 5,127 13,915 Disposals (12,837) (195) (13,032) As at 31 March 2021 4,535 31,527 36,062
Net book value As at 31 March 2020 8,788 9,148 17,936 As at 31 March 2021 24,685 5,232 29,917
21. LEASES – THE GROUP AS A LESSEE
Nature of the Group’s leasing activities
The Group leases various leasehold land and buildings. The leasehold land and buildings are recognised within property, plant and equipment (Note 20) when they are used as office facilities or used in the supply of services such as the Group’s hotel operations. Leasehold land and buildings that are held for long-term rental yields and/or for capital appreciation are classified within “investment properties” (Note 18).
There are no externally imposed covenants on these lease arrangements.
185 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
21. LEASES – THE GROUP AS A LESSEE (CONTINUED)
Right-of-use assets Property, plant and equipment Leasehold Investment land and Other properties building assets Total $’000 $’000 $’000 $’000
Cost or valuation As at 1 April 2019 248,795 43,074 4,131 296,000 Additions 45,599 16,104 5,840 67,543 Disposals (11,572) (6,409) – (17,981) Currency translation differences 2,754 786 182 3,722 As at 31 March 2020 285,576 53,555 10,153 349,284 Additions 9,225 977 293 10,495 Write-offs/Disposals – (4,097) (791) (4,888) Deconsolidation of subsidiaries (28,581) – – (28,581) Lease modification – (1,224) – (1,224) Revaluation adjustment – 617 – 617 Currency translation differences (4,229) (931) 220 (4,940) As at 31 March 2021 261,991 48,897 9,875 320,763
Fair value loss and accumulated depreciation As at 1 April 2019 – – – – Depreciation charge during the financial year – 11,492 1,658 13,150 Revaluation loss recognised in profit or loss 32,352 – – 32,352 Disposals (111) (2,733) – (2,844) Currency translation differences 290 74 18 382 As at 31 March 2020 32,531 8,833 1,676 43,040 Depreciation charge during the financial year – 6,757 2,382 9,139 Revaluation loss recognised in profit or loss 38,353 – – 38,353 Write-offs/Disposals – (3,674) (703) (4,377) Deconsolidation of subsidiaries (1,217) – – (1,217) Currency translation differences (1,308) (126) 110 (1,324) As at 31 March 2021 68,359 11,790 3,465 83,614
Net book value of ROU assets As at 31 March 2020 253,045 44,722 8,477 306,244 As at 31 March 2021 193,632 37,107 6,410 237,149
Lease expense not capitalised in lease liabilities Group 2021 2020 $’000 $’000
Lease expense: – Short-term leases 44,545 331,102 – Low-value leases 547 289 Rent concessions received from lessors (1,620) – Total 43,472 331,391
186 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
21. LEASES – THE GROUP AS A LESSEE (CONTINUED)
Total cash outflow for leases Group 2021 2020 $’000 $’000
Repayment under lease liabilities: – Principal 38,788 40,522 – Interest 11,592 13,047 Total cash outflow for leases 50,380 53,569
22. LEASES – THE GROUP AS A LESSOR
Nature of the Group’s leasing activities – the Group as a lessor
The Group leases out its investment properties to third parties for monthly lease payments. The leases have escalation clauses and renewal rights. Where considered necessary to reduce credit risk, the Group may obtain deposits and bank guarantees for the term of the lease. These leases are classified as operating leases because the risk and rewards incidental to ownership of the assets are not substantially transferred.
Rental income from investment properties is disclosed in Note 18.
Nature of the Group’s leasing activities – Group as an intermediate lessor
Subleases – classified as operating leases
The Group acts as an intermediate lessor under arrangements in which it subleases corporate housing to third parties for monthly lease payments. The sublease periods do not form a major part of the remaining lease terms under the head leases and accordingly, the sub-leases are classified as operating leases.
Income from subleasing of corporate housing is disclosed in Note 4.
Maturity analysis of lease payments – Group as a lessor
The table below discloses the undiscounted lease payments to be received by the Group for its leases and sub-leases after the balance sheet date as follows:
Group 2021 2020 $’000 $’000
Less than one year 1,970,355 2,450,618 One to two years 1,453,888 1,918,687 Two to three years 1,001,899 1,402,523 Three to four years 662,374 954,531 Four to five years 510,408 659,671 Later than five years 1,649,691 2,449,555 Total undiscounted lease payments 7,248,615 9,835,585
187 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
23. INTANGIBLE ASSETS
<–––––––––– Definite useful life –––––––––– > <–– Indefinite useful life ––> Customer- Goodwill Software related Concessionary Trade arising on licences intangibles agreement names consolidation Total $’000 $’000 $’000 $’000 $’000 $’000
Group
Cost As at 1 April 2019 14,819 23,613 78,700 76,821 55,373 249,326 Additions 51 – 1,089 – – 1,140 Write-offs/Disposals (184) – – – – (184) Currency translation differences 4 313 – 1,299 291 1,907 As at 31 March 2020 14,690 23,926 79,789 78,120 55,664 252,189 Additions 143 214 3,809 – – 4,166 Write-offs/Disposals (234) – – – – (234) Deconsolidation of subsidiaries (Note 40(c)) – – – – (8,327) (8,327) Currency translation differences (5) (282) – (1,990) – (2,277) As at 31 March 2021 14,594 23,858 83,598 76,130 47,337 245,517
Accumulated amortisation and impairment As at 1 April 2019 11,083 3,911 9,318 18,237 33,903 76,452 Amortisation charge 1,792 11,492 9,453 – – 22,737 Write-offs/Disposals (149) – – – – (149) Impairment charged to profit or loss (Note 5) – – – – 13,258 13,258 Currency translation differences – 30 – – 176 206 As at 31 March 2020 12,726 15,433 18,771 18,237 47,337 112,504 Amortisation charge 1,660 1,070 9,895 – – 12,625 Write-offs/Disposals (234) – – – – (234) Impairment charged to profit or loss (Note 5) – – – 10,750 – 10,750 Currency translation differences (3) (21) – (216) – (240) As at 31 March 2021 14,149 16,482 28,666 28,771 47,337 135,405
Net book value As at 31 March 2020 1,964 8,493 61,018 59,883 8,327 139,685 As at 31 March 2021 445 7,376 54,932 47,359 – 110,112
188 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
23. INTANGIBLE ASSETS (CONTINUED)
Definite useful life Software licences Total $’000 $’000
Company
Cost As at 1 April 2019 12,907 12,907 Additions 4 4 As at 31 March 2020 12,911 12,911 Additions 120 120 As at 31 March 2021 13,031 13,031
Accumulated amortisation As at 1 April 2019 9,743 9,743 Amortisation charge 1,520 1,520 As at 31 March 2020 11,263 11,263 Amortisation charge 1,521 1,521 As at 31 March 2021 12,784 12,784
Net book value As at 31 March 2020 1,648 1,648 As at 31 March 2021 247 247
For purpose of impairment testing of trade names with indefinite useful life and goodwill arising from consolidation, the amounts are allocated to the Oakwood Worldwide cash generating unit (“CGU”) under the “Group Lodging” operating segment.
In 2021, the Group recorded an impairment charge on trade names of $10.8 million, as a result of the impact of COVID-19 on the future business outlook of the Group’s lodging business. In 2020, the Group recorded an impairment charge on goodwill of $13.3 million, thereby fully impairing goodwill, in light of future business outlook.
The recoverable amount of the CGU as at the balance sheet date was determined based on value-in-use (“VIU”) calculations, using financial projections covering a five-year (2020: four-year) period approved by management. Cash flows beyond the five- year (2020: four-year) period were extrapolated using the estimated growth rate of 2% (2020: 2%) which did not exceed the long- term average growth rate for the corporate housing and hospitality industry in countries in which the CGU operates.
Other key assumptions included the budgeted gross profit margin for the period from 2022 to 2026 determined by management based on past performance and management’s strategy for the CGU. The pre-tax discount rate applied to the VIU calculations was 17.5% (2020: 18.6%).
189 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
24. TRADE AND OTHER PAYABLES
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
Trade payables: – Related parties 14,327 3,511 – – – Non-related parties 32,230 38,833 297 708 46,557 42,344 297 708
Non-trade payables: – Subsidiaries – – 19,913 16,933
Interest payable 53,440 65,337 – – Property tax payable 23,292 21,222 – – Tenancy deposits 462,009 492,956 – – Rental received in advance 102,541 123,432 – – Other deposits 34,699 72,080 – – Other payables 302,866 175,921 – – Provision for Corporate and Staff Social Responsibilities (“CSSR”) 13,488 14,994 13,488 14,994 Accrued capital expenditure 140,932 152,476 – – Accrued operating expenses 617,631 667,788 266,844 279,418 Accrued share-based compensation expenses 109,294 71,483 80,827 49,615 Accrued retention sum 185,150 46,902 – – Deferred revenue 1,723 5,462 – – 2,047,065 1,910,053 361,159 344,027
Total 2,093,622 1,952,397 381,369 361,668 Less: Non-current portion (488,389) (576,952) (199,372) (194,152) Current portion 1,605,233 1,375,445 181,997 167,516
(a) Non-trade payables due to subsidiaries are unsecured, interest-free and repayable on demand.
(b) Provision for CSSR relates to the Group’s CSSR commitments under its published Mapletree Shaping and Sharing Programme that strives to make social impact by empowering individuals and enriching communities through education, health, environmental and arts related causes. During the financial year, the Group committed $4.0 million (2020: $4.0 million) as a provision for the Group’s CSSR programme.
(c) Included in trade and other payables are accruals relating to three employee compensation schemes, one scheme being compensation that is deferred and payable over a period of time and the other two schemes being share-based compensation (Note 28). As at 31 March 2021, these accruals for the Group and the Company amounted to $383.9 million (2020: $387.4 million) and $318.1 million (2020: $299.5 million); out of which $239.4 million (2020: $249.4 million) and $199.4 million (2020: $194.2 million) are classified as non-current for the Group and the Company respectively.
190 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
25. DERIVATIVE FINANCIAL INSTRUMENTS
Group Contract Fair Fair notional value of value of amount assets liabilities $’000 $’000 $’000
31 March 2021 Hedge accounting − Cash flow hedges – Interest rate swaps 6,949,200 2,545 (148,495) – Cross currency interest rate swaps 1,726,743 28,977 (30,224) 31,522 (178,719)
Hedge accounting − Net investment hedges – Currency forwards 1,081,822 4,792 (26,650)
Non-hedge accounting – Interest rate swaps 232,686 – (3,621) – Currency forwards 8,241,871 62,537 (77,287) – Cross currency interest rate swaps 347,100 4,696 (24,879) 67,233 (105,787)
Represented by: – Current 56,320 (113,358) – Non-current 47,227 (197,798) 103,547 (311,156)
31 March 2020 Hedge accounting − Cash flow hedges – Interest rate swaps 8,539,589 1,204 (260,579) – Cross currency interest rate swaps 1,394,113 16,644 (45,793) – Currency forwards 20,575 – (1,104) 17,848 (307,476)
Hedge accounting − Net investment hedges – Currency forwards 1,085,043 15,152 (7,590)
Hedge accounting − Fair value hedges – Interest rate swaps 75,000 2,911 –
Non-hedge accounting – Interest rate swaps 150,973 – (2,564) – Currency forwards 8,087,572 10,430 (184,575) – Cross currency interest rate swaps 470,242 15,819 (43,190) 26,249 (230,329)
Represented by: – Current 26,576 (193,513) – Non-current 35,584 (351,882) 62,160 (545,395)
191 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
25. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Hedging instruments used in the Group’s hedging strategy in the financial year ended 31 March 2021
Changes in fair value used for calculating hedge Carrying amount ineffectiveness Hedge Contractual ineffectiveness notional Financial Hedging Hedged recognised in Weighted amount Liabilities statement instrument item profit or loss * average Maturity $’000 $’000 line item $’000 $’000 $’000 hedged rate date
Group
Cash flow hedges Foreign currency risk/interest rate risk – Cross currency swaps to hedge 1,726,743 (1,247) Derivative 43,893 (43,545) 348 SGD1: GBP1.78 2021 – 2027 floating rate borrowings financial SGD1: HKD5.75 denominated in foreign instruments USD1: HKD7.79 currency SGD1: JPY81.2 HKD1: JPY14.28 0.00% – 4.65% Interest rate risk – Interest rate swaps to hedge 6,949,200 (145,950) Derivative 12,988 (11,694) 1,294 0.15% – 2.86% 2021 – 2028 floating rate borrowings financial instruments Net investment hedges Foreign exchange risk – Forward contracts to hedge 1,081,822 (21,858) Derivative (15,057) 15,057 – JPY: 0.01224 2021 – 2024 net investments in foreign financial USD: 1.3627 operations instruments CNY: 0.2222 GBP: 1.7277 AUD: 0.9848 INR: 0.0193 EUR: 1.5589 KRW: 0.00121 MYR: 3.3299
– Borrowings to hedge net – (949,997) Borrowings (43,928) 43,928 – – – investments in foreign operations
* All hedge ineffectiveness and costs of hedging are recognised in profit and loss within “other gains/(losses) – net and other income”.
192 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
25. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Hedging instruments used in the Group’s hedging strategy in the financial year ended 31 March 2020
Changes in fair value used for calculating hedge Carrying amount ineffectiveness Hedge Contractual ineffectiveness notional Assets/ Financial Hedging Hedged recognised in Weighted amount (liabilities) statement instrument item profit or loss * average Maturity $’000 $’000 line item $’000 $’000 $’000 hedged rate date
Group
Cash flow hedges Currency risk – Currency forwards to hedge 20,575 (1,104) Derivative (840) 840 – USD1: SGD1.35 2020 – 2022 quarterly dividend income financial receivable in foreign instruments currency
Foreign currency risk/interest rate risk – Cross currency swaps to 1,394,113 (29,149) Derivative (29,806) 28,901 (905) SGD1: GBP1.78 2021 – 2027 hedge floating rate financial SGD1: HKD5.75 borrowings denominated in instruments USD1: HKD7.79 foreign currency SGD1: JPY81.23 HKD1: JPY14.28 0.52% – 4.65% Interest rate risk – Interest rate swaps to hedge 8,539,589 (259,375) Derivative (208,879) 207,593 (1,286) 0.19% – 2.86% 2020 – 2028 floating rate borrowings financial instruments Net investment hedges Foreign exchange risk – Forward contracts to hedge 1,085,043 7,562 Derivative 5,535 (5,535) – JPY: 0.01219 2020 net investments in foreign financial USD: 1.3841 operations instruments CNY: 0.2223 GBP: 1.7277 AUD: 0.9681 INR: 0.01928 EUR: 1.5258
– Borrowings to hedge net – (1,192,448) Borrowings (298,117) 298,117 – – – investments in foreign operations
Fair value hedges Interest rate risk – Interest rate swaps to hedge 75,000 2,911 Derivative 1,990 (1,990) – 3.02% 2023 fixed rate borrowings financial instruments
* All hedge ineffectiveness and costs of hedging are recognised in profit and loss within “other gains/(losses) – net and other income”.
193 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
25. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Effects of fair value hedges on hedged items are as follows:
Financial statement Accumulated Carrying line item amount for amount that includes fair value of assets hedged item adjustments $’000 $’000
31 March 2020 Group Fair value hedges Interest rate risk – Interest rate swaps to hedge fixed rate borrowings 77,911 Borrowings 2,911
26. BORROWINGS
Group 2021 2020 $’000 $’000
Current – Loans from financial institutions (secured) (Note (a)) 443 219,355 – Loans from financial institutions (unsecured) (Note (b)) 1,363,823 2,319,162 – Medium term notes (unsecured) (Note (d)) 531,053 268,897 – Loans from non-controlling interests (unsecured) (Note (e)) 16,042 – 1,911,361 2,807,414
Non-current – Loans from financial institutions (secured) (Note (a)) 1,793,110 1,393,241 – Loans from financial institutions (unsecured) (Note (b)) 13,044,156 13,225,200 – Medium term notes (secured) (Note (c)) 327,271 338,489 – Medium term notes (unsecured) (Note (d)) 3,021,715 3,676,414 – Loans from non-controlling interests (unsecured) (Note (e)) 6,467 38,736 – Tokutei Mokuteki Kaisha (“TMK”) bonds (secured) (Note (f)) 78,943 86,305 18,271,662 18,758,385
20,183,023 21,565,799
194 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
26. BORROWINGS (CONTINUED)
Group 2021 2020
(a) Loans from financial institutions (secured) ($’000) 1,793,553 1,612,596 Repayable between 2022 to 2034 2020 to 2027 Effective interest rate (per annum) 0.35% to 7.80% 0.27% to 10.10% Re-pricing Three months One to three months Secured by Certain investment properties Certain investment properties
(b) Loans from financial institutions (unsecured) ($’000) 14,407,979 15,544,362 Repayable between 2021 to 2029 2020 to 2028 Effective interest rate (per annum) 0.40% to 7.20% 0.38% to 5.78% Re-pricing One to six months One to six months
(c) Medium term notes (secured) ($’000) 327,271 338,489 Repayable between 2026 and 2027 2026 and 2027 Effective interest rate (per annum) 0.84% to 4.30% 0.26% to 1.24% Re-pricing Not applicable Not applicable Secured by Certain investment properties Certain investment properties
(d) Medium term notes (unsecured) ($’000) 3,552,768 3,945,311 Repayable between 2021 to 2031 2020 to 2031 Effective interest rate (per annum) 0.90% to 4.95% 2.29% to 4.95% Re-pricing Not applicable Not applicable
(e) Loans from non-controlling interests (unsecured) ($’000) 22,509 38,736 Repayable between 2021 to 2023 2021 to 2024 Effective interest rate (per annum) 2.20% to 4.82% 1.93% to 4.87% Re-pricing Six months Three to six months
(f) TMK bonds (secured) ($’000) 78,943 86,305 Repayable between 2024 and 2025 2024 and 2025 Effective interest rate (per annum) 0.39% to 0.43% 0.39% to 0.43% Re-pricing Not applicable Not applicable Secured by Certain investment properties Certain investment properties
195 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
27. DEFERRED INCOME TAXES
Movements in deferred income taxes are as follows:
Group Company 2021 2020 2021 2020 $’000 $’000 $’000 $’000
As at 1 April 471,211 400,872 (49,459) (33,197) Tax charged/(credited) to: – Profit or loss 159,452 95,772 (4,269) (16,262) – Other comprehensive income (2,366) (4,763) – – – Equity (9,482) (9,508) – – Acquisition of subsidiaries (Note 40(a)) 6,819 – – – Disposal of subsidiaries (Note 40(b)) (4,166) (16,114) – – Deconsolidation of subsidiaries (Note 40(c)) (9,251) – – – Utilisation of tax benefits 9,508 9,482 – – Currency translation differences (1,821) (4,530) – – As at 31 March 619,904 471,211 (53,728) (49,459)
Tax expense of $2.9 million (2020: tax credit $4.7 million) relating to fair value changes and reclassification adjustments on cash flow hedges is included in other comprehensive income.
Tax credit of $9.5 million (2020: $9.5 million) relating to perpetual securities distribution is recognised directly in equity.
Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses of approximately $338.0 million (2020: $259.2 million) as at the balance sheet date which can be carried forward and used to offset against future taxable income, subject to meeting certain statutory requirements by those companies with unrecognised tax losses in their respective countries of incorporation. The tax losses have no expiry date except for an amount of $104.4 million (2020: $62.6 million) which will expire between 2021 and 2031 (2020: 2020 to 2030).
Deferred income tax liabilities have not been recognised for the withholding and other taxes that will be payable on unremitted earnings of $116.1 million (2020: $109.0 million) of overseas subsidiaries as the timing of the reversal of the temporary differences arising from such amounts can be controlled and it is probable that such temporary differences will not reverse in the foreseeable future.
196 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
27. DEFERRED INCOME TAXES (CONTINUED)
The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year are as follows:
Group Accelerated tax Revaluation Accrued depreciation gains revenue Others Total $’000 $’000 $’000 $’000 $’000
Deferred income tax liabilities
As at 1 April 2020 270,781 247,968 8,780 30,625 558,154 Acquisition of subsidiaries (Note 40(a)) 884 – – 5,935 6,819 Disposal of subsidiaries (Note 40(b)) – (4,166) – – (4,166) Deconsolidation of subsidiaries (Note 40(c)) (1,924) (1,149) (6,178) – (9,251) Charged/(credited) to: – Profit or loss 52,260 103,980 3,150 131 159,521 – Other comprehensive income – (5,233) – 2,867 (2,366) Currency translation differences (4,950) 3,978 (366) (313) (1,651) As at 31 March 2021 317,051 345,378 5,386 39,245 707,060
As at 1 April 2019 242,822 230,511 4,827 15,311 493,471 Disposal of subsidiaries (Note 40(b)) (12,930) (838) 24 (5,676) (19,420) Charged/(credited) to: – Profit or loss 43,175 20,366 3,819 24,998 92,358 – Other comprehensive income – (31) – (4,732) (4,763) Currency translation differences (2,286) (2,040) 110 724 (3,492) As at 31 March 2020 270,781 247,968 8,780 30,625 558,154
Perpetual Tax securities Provisions losses Total $’000 $’000 $’000 $’000
Deferred income tax assets
As at 1 April 2020 (2,771) (74,558) (9,614) (86,943) Charged/(credited) to: – Profit or loss – 81 (150) (69) – Equity (9,482) – – (9,482) Utilisation of tax benefits 9,508 – – 9,508 Currency translation differences – (84) (86) (170) As at 31 March 2021 (2,745) (74,561) (9,850) (87,156)
As at 1 April 2019 (2,745) (65,273) (24,581) (92,599) Disposal of subsidiaries (Note 40(b)) – – 3,306 3,306 (Credited)/charged to: – Profit or loss – (9,447) 12,861 3,414 – Equity (9,508) – – (9,508) Utilisation of tax benefits 9,482 – – 9,482 Currency translation differences – 162 (1,200) (1,038) As at 31 March 2020 (2,771) (74,558) (9,614) (86,943)
197 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
27. DEFERRED INCOME TAXES (CONTINUED)
Company
Accelerated Notional tax interest depreciation income Total $’000 $’000 $’000
Deferred income tax liabilities
As at 1 April 2020 1,814 280 2,094 (Credited)/charged to profit or loss (910) 48 (862) As at 31 March 2021 904 328 1,232
As at 1 April 2019 2,087 212 2,299 (Credited)/charged to profit or loss (273) 68 (205) As at 31 March 2020 1,814 280 2,094
Provisions $’000
Deferred income tax assets
As at 1 April 2020 (51,553) Credited to profit or loss (3,407) As at 31 March 2021 (54,960)
As at 1 April 2019 (35,496) Credited to profit or loss (16,057) As at 31 March 2020 (51,553)
28. SHARE CAPITAL
Issued and fully paid ordinary shares and Series A redeemable preference shares (“RPS”)
Issued share capital No. of shares Amount ’000 $’000
Balance as at 31 March 2021 and 31 March 2020 – Ordinary share capital, with no par value 1,524,307 1,524,307 – Series A redeemable preference shares, with no par value 16 1,570,000 1,524,323 3,094,307
198 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
28. SHARE CAPITAL (CONTINUED)
Issued and fully paid Series A RPS
The Series A RPS confer upon the holders the following rights:
(a) Dividends
The right to receive out of the distributable profits of the Company a non-cumulative preferential dividend at a rate of 1% per annum on the redemption amount (being the value of the Series A RPS). The preferential dividend shall:
(i) Be declared by the directors at any time and from time to time and payable at such time as the directors shall determine; and
(ii) Be paid in priority to any dividend or distribution in favour of holders of any other classes of shares in the Company.
(b) Voting
The right to attend and vote at general meetings of the Company only upon the happening of any of the following events:
(i) During such year as the preferential dividend or any part thereof remains in arrears and unpaid for more than 12 months;
(ii) Upon any resolution which varies or abrogates the rights attached to the preference shares; and
(iii) Upon any resolution for the winding up of the Company.
In addition, written approval of 75% of the RPS holders has to be obtained prior to:
(i) Variation or abrogation of rights to RPS holders;
(ii) Altering RPS through e.g. repurchase, cancellation, reduction, subdivision, reclassification or consolidation;
(iii) Issue of equity or debt convertible into equity ranking pari passu or in priority to RPS; or
(iv) Declaration or payment of dividends or other distribution of profits or by issuance of ordinary shares through capitalisation of profits or reserves.
(c) Redemption
The Company has the right to redeem all or any part of the RPS issued and fully paid at any time. Each RPS will be redeemed for the amount paid up thereon plus any arrears and accrual of dividends payable on the RPS to the redemption date.
199 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
28. SHARE CAPITAL (CONTINUED)
Share-based compensation plans of the Company
The Company currently operates the following share-based compensation plans: Mapletree PSU Plan, Mapletree RSU Plan and Mapletree NED RSU Plan (collectively referred to as the “Share-based Compensation Plans”). The Executive Resource and Compensation Committee (“ERCC”) of the Company has been designated as the Committee responsible for the administration of the share-based compensation plans.
(a) Mapletree Performance Share Units (“PSU”) Plan and Mapletree Restricted Share Units (“RSU”) Plan
The Mapletree PSU Plan and the Mapletree RSU Plan (collectively referred to as the “Plans”) for employees (including executive director) were approved and adopted by the Board of Directors and shareholders of the Company on 4 November 2009. The first grant of award under the Plans was made in January 2010. The duration of each share plan is 10 years commencing from 4 November 2009. The Plans were approved to be extended for another 10 years commencing from 4 November 2019 by the Board of Directors and shareholder on 16 May 2019 and 10 September 2019 respectively.
Under the Plans, awards are granted to eligible participants. Eligible participants of the Plans include selected employees of the Company, subsidiaries and associated companies, including executive director.
A Performance Share Unit (“PSU”) or Restricted Share Unit (“RSU”) granted under the Plans represents a right to receive cash or cash equivalents, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Plans, provided certain performance conditions and service conditions are met.
Under the Mapletree PSU Plan, awards granted to eligible participants vest immediately upon completion of the performance achievement periods. Awards are released once the ERCC is satisfied that the performance conditions have been achieved.
Similarly under the Mapletree RSU Plan, a portion of the awards granted to eligible participants vest immediately upon completion of the performance achievement periods and the remaining awards will vest only after a further period of service beyond the performance target completion date. Awards are released once the ERCC is satisfied that the performance conditions have been achieved and the extended period of service beyond the performance target completion date have been fulfilled.
The number of PSU outstanding under the Mapletree PSU Plan as at the end of the financial year is summarised below:
2021 2020 ’000 ’000
As at 1 April 22,104 19,077 Initial award granted 3,744 6,024 Adjustment for performance targets 2,774 2,165 Forfeited/cancelled (502) (192) Released (6,512) (4,970) As at 31 March 21,608 22,104
200 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
28. SHARE CAPITAL (CONTINUED)
Share-based compensation plans of the Company (continued)
(a) Mapletree PSU Plan and Mapletree RSU Plan (continued)
The final number of units to be released will depend on the achievement of pre-determined targets over a five-year performance period. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 200% of the initial award.
The PSU released during the financial year of 6,511,617 (2020: 4,969,881) were cash-settled.
The number of PSU awarded and outstanding of 21,607,535 (2020: 22,103,757) is to be cash-settled. The final number of units to be released in respect of 21,607,535 (2020: 22,103,757) outstanding PSU has not been determined.
The number of RSU outstanding under the Mapletree RSU Plan at the end of the financial year is summarised below:
2021 2020 ’000 ’000
As at 1 April 6,715 4,887 Initial award granted 2,342 3,739 Adjustment for performance targets 960 1,067 Forfeited/cancelled (390) (239) Released (3,325) (2,739) As at 31 March 6,302 6,715
The final number of units to be released will depend on the achievement of pre-determined targets over a one-year performance period and the release will be over a vesting period of three years. No units will be released if the threshold targets are not met at the end of the performance period. On the other hand, if superior targets are met, more units than the initial award could be released up to a maximum of 150% of the initial award.
The RSU released during the financial year of 3,325,487 (2020: 2,739,071) were cash-settled.
The number of RSU awarded and outstanding of 6,302,413 (2020: 6,714,609) is to be cash-settled. The final number of units to be released in respect of 2,239,484 (2020: 3,693,407) outstanding RSU has not been determined.
PSU and RSU that are expected to be cash-settled are measured at their current fair values as at the balance sheet date. The fair value is measured based on the independently assessed value (“IAV”) of $5.28 (2020: $3.37) as at the balance sheet date.
201 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
28. SHARE CAPITAL (CONTINUED)
Share-based compensation plans of the Company (continued)
(b) Mapletree NED Restricted Share Units Plan
The Mapletree NED RSU Plan was approved and adopted by the Board of Directors and shareholder of the Company on 4 November 2009 and is restricted to non-executive directors (“NED”) of the Company. The first grant of award was made in June 2010. The duration of the Mapletree NED RSU Plan is 10 years commencing from 4 November 2009. The Plans were approved to be extended for another 10 years commencing from 4 November 2019 by the Board of Directors and shareholder on 16 May 2019 and 10 September 2019 respectively.
Under the Mapletree NED RSU Plan, awards are granted to eligible non-executive directors of the Company. A NED Restricted Share Unit (“NED RSU”) granted under the Mapletree NED RSU Plan represents a right to receive cash or cash equivalent, fully-paid Company Shares, or combinations thereof, as calculated in accordance with the Mapletree NED RSU Plan. Grants of Mapletree NED RSU made to a non-executive director shall form part of the director’s remuneration.
Under the Mapletree NED RSU Plan, awards granted to eligible non-executive directors shall vest at the date of grant. The right to receive cash or cash equivalent, fully-paid Company Shares, or combinations thereof, is exercisable at the discretion of the non-executive directors at the annual pre-determined exercise period, until the date falling on the fifth (5th) anniversary of date of grant of each award.
The number of NED RSU outstanding under the Mapletree NED RSU Plan at the balance sheet date is summarised below:
2021 2020 ’000 ’000
As at 1 April 240 230 Granted 47 44 Exercised (50) (34) As at 31 March 237 240
The NED RSU exercised during the financial year of 50,262 (2020: 33,896) were cash-settled.
The number of units awarded, vested and outstanding of 236,523 (2020: 240,433) is to be cash-settled. The fair value of the cash-settled award of NED RSU as at the balance sheet date is determined based on the net asset value (excluding perpetual securities) per share of the Group as at the balance sheet date, up to a maximum of 200% of the initial net asset value per share of the Group at the respective grant dates.
(c) Share-based compensation plans of subsidiaries
The respective Nomination and Remuneration Committee of the Group’s wholly-owned subsidiaries, Mapletree Logistics Trust Management Ltd, Mapletree Industrial Trust Management Ltd, Mapletree Commercial Trust Management Ltd and Mapletree North Asia Commercial Trust Management Ltd (each the “REIT management company”) approved and adopted separate Performance Share Units Plan (“REIT PSU Plan”) and Restricted Share Units Plan (“REIT RSU Plan”) in the financial year ended 31 March 2017. This is in compliance with the MAS guideline on REIT compensation governance where the plans are linked to performance of the respective REIT. The duration of each share plan is 10 years commencing from July 2016. The first grant of award under the Plans was made in November 2016. The REIT PSU Plan and REIT RSU Plan are available to eligible employees of the subsidiaries and the plans can only be cash-settled.
The total REIT PSU Plan and REIT RSU Plan expense recognised in profit or loss amounts to $11,285,012 (2020: $8,625,925).
202 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
29. PERPETUAL SECURITIES
The Group has issued the following perpetual securities:
(a) Mapletree Treasury Services Limited
Mapletree Treasury Services Limited (“MTSL”), a wholly-owned subsidiary of the Group, issued perpetual securities with an aggregate principal amount of $625 million in January 2017 (“2017 Issuance”) and $700 million in May 2017 (“2018 Issuance”). The perpetual securities are guaranteed by the Company.
The perpetual securities bear distributions at a rate of 4.50% per annum for the 2017 Issuance and 3.95% per annum for the 2018 Issuance, payable semi-annually. Subject to the relevant terms and conditions in the offering circular, MTSL may elect to defer making such cumulative distributions and is not subject to any limits as to the number of times a distribution can be deferred.
These perpetual securities have no fixed redemption date and redemption is at the discretion of MTSL.
As at 31 March 2021, total incremental cost of $11.1 million (2020: $11.1 million) is recognised in equity as a deduction from proceeds.
(b) Mapletree Logistics Trust
Mapletree Logistics Trust (“MLT”), a subsidiary of the Group, issued perpetual securities with an aggregate principal amount of $250 million in May 2016 ("2016 Issuance”) and $180 million in September 2017 ("2017 Issuance"). In terms of distribution payments or in the event of winding up of MLT, these perpetual securities rank pari passu with the holders of preferred units (if any) and rank ahead of the unitholders of MLT, but junior to the claims of all other present and future creditors of MLT. MLT shall not declare distribution or pay any distributions to the unitholders, or make redemption, unless MLT declares or pays any distributions to the holders of the perpetual securities.
The perpetual securities bear distributions at a rate of 4.18% per annum for the 2016 Issuance and 3.65% per annum for the 2017 Issuance, payable semi-annually. The distribution will be payable semi-annually at the discretion of MLT and will be non-cumulative.
These perpetual securities have no fixed redemption date and redemption is at the discretion of MLT.
As at 31 March 2021, total incremental cost of $3.8 million (2020: $3.8 million) is recognised in equity as a deduction from proceeds.
The Group is considered to have no contractual obligations to call its principal or to pay any distributions and the perpetual securities of MTSL and MLT do not meet the definition for classification as a financial liability under SFRS(I) 1-32 Financial Instruments: Disclosure and Presentation. Both instruments are presented within equity and distributions are treated as dividends.
203 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
30. HEDGING RESERVE
The movements in hedging reserve by risk category are as follows:
Group Interest rate risk/ Interest Foreign rate risk exchange risk Total $’000 $’000 $’000
31 March 2021 Beginning of financial year (182,985) 14,911 (168,074) Fair value (loss)/gain (11,764) 46,901 35,137 Tax on fair value loss/(gain) 725 (3,592) (2,867) (194,024) 58,220 (135,804) Reclassification to profit or loss, as hedged item has affected profit or loss – Finance expense 59,266 (9,065) 50,201 – Foreign exchange 8,277 (28,927) (20,650) Share of hedging reserve from associated companies 27,975 – 27,975 Less: Non-controlling interests (11,254) (4,683) (15,937) Deconsolidation of subsidiaries 33,494 (582) 32,912 End of financial year (76,266) 14,963 (61,303)
31 March 2020 Beginning of financial year (46,246) 10,491 (35,755) Fair value loss (210,767) (29,675) (240,442) Tax on fair value loss 722 4,010 4,732 (256,291) (15,174) (271,465) Reclassification to profit or loss, as hedged item has affected profit or loss – Finance expense 13,857 (11,581) 2,276 – Foreign exchange – 44,300 44,300 Share of hedging reserve from associated companies (9,411) – (9,411) Less: Non-controlling interests 68,860 (2,634) 66,226 End of financial year (182,985) 14,911 (168,074)
204 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
31. COMMITMENTS
Capital commitments Group 2021 2020 $’000 $’000
Development expenditure contracted for 1,269,068 906,514 Capital expenditure contracted for 50,057 90,735 Commitment in respect of equity participation in financial asset, at FVOCI 18,670 24,596 Commitments in respect of equity participation in associated companies – 3,591
32. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks. The Group uses different methods to measure and manage various types of risks to which it is exposed. These include monitoring levels of exposure to foreign exchange, price, interest rate, credit and liquidity risks.
Risk management is carried out under policies approved by the Board of Directors. The Board of Directors provides general principles for overall risk management, covering areas such as foreign exchange risk, price risk, interest rate risk, credit risk and liquidity risk. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Audit and Risk Committee, assisted by the risk management department and/or internal auditors, also evaluates the effectiveness of the system associated with the financial risk management programmes.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to foreign exchange risk on its foreign currency denominated assets and liabilities. This currency exposure, where practicable and appropriate, is managed through borrowings in the same currencies in which the assets and/or investments are denominated as well as currency forwards, currency call/put options and cross currency swap contracts.
Foreign exchange risk is measured through a forecast of highly probable foreign currency expenditure. The objective of the hedges is to minimise the volatility of the Group’s currency cost of highly probable transactions. In order to achieve this objective, the Group entered into cash flow hedges for the highly probable purchase transactions. The foreign exchange forwards are denominated in the same currency as the highly probable purchase transactions; therefore the hedge ratio is 1:1.
In relation to its investments in foreign subsidiaries, associated companies and joint ventures whose net assets are exposed to currency translation risks and which are held for long-term investment purpose, the differences arising from such translation are recognised in other comprehensive income as foreign currency translation reserve. These translation differences are reviewed and monitored on a regular basis and managed primarily through currency forwards, cross currency interest rate swaps or borrowings denominated in the relevant currencies.
Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.
There is no significant hedge ineffectiveness for the financial year ended 31 March 2021 in relation to the cash flow and net investment hedges.
205 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
(i) Foreign exchange risk (continued)
The Group’s currency exposure based on information provided to key management is as follows:
SGD USD RMB HKD JPY MYR AUD GBP EUR INR VND $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
31 March 2021 Financial assets Cash and cash equivalents 395,625 205,847 498,052 42,103 196,267 45,168 27,700 160,718 98,317 85,008 183,549 Trade and other receivables (including intercompany balances) 14,807,351 8,359,217 11,153,707 171,220 1,669,532 227,113 317,721 2,756,730 1,583,841 555,704 69,776 Deposits 12,750 18,413 7,635 1,548 530 924 21 164 134 1,883 3,290 15,215,726 8,583,477 11,659,394 214,871 1,866,329 273,205 345,442 2,917,612 1,682,292 642,595 256,615
Financial liabilities Borrowings 6,596,843 3,144,146 2,228,713 2,429,159 2,207,360 403,339 659,441 1,382,752 508,148 201,663 – Lease liabilities 110,149 69,290 8,369 447 222 42 11 5,205 169 333 50,506 Trade and other payables (including intercompany balances) 15,830,728 8,458,657 11,461,003 295,455 1,362,938 189,885 323,419 2,753,132 1,400,579 597,366 108,834 22,537,720 11,672,093 13,698,085 2,725,061 3,570,520 593,266 982,871 4,141,089 1,908,896 799,362 159,340
Net financial (liabilities)/assets (7,321,994) (3,088,616) (2,038,691) (2,510,190) (1,704,191) (320,061) (637,429) (1,223,477) (226,604) (156,767) 97,275
Net financial liabilities/(assets) denominated in the respective entities’ functional currencies 6,442,008 5,900,694 5,089,887 2,457,473 1,965,053 645,865 775,448 1,640,884 403,397 686,184 (94,516)
Notional amount of currency forwards and cross currency swaps not designated as net investment hedge 832,398 (3,435,232) (2,850,094) 33,557 (337,050) (127,133) (112,435) (459,906) (376,892) (319,593) –
Loans designated as net investment hedge – 527,207 – – – – – – 192,380 – –
Currency exposures on financial (liabilities)/ assets (47,588) (95,947) 201,102 (19,160) (76,188) 198,671 25,584 (42,499) (7,719) 209,824 2,759
206 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
(i) Foreign exchange risk (continued)
SGD USD RMB HKD JPY MYR AUD GBP EUR INR VND $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
31 March 2020 Financial assets Cash and cash equivalents 541,292 378,686 457,002 50,307 466,718 51,605 11,148 100,014 144,065 40,865 150,928 Trade and other receivables (including intercompany balances) 13,715,353 8,862,601 7,363,857 27,740 1,237,081 228,615 205,299 3,165,444 3,496,295 377,881 63,658 Deposits 13,108 3,089 12,251 2,013 599 2,808 9,883 419 178 883 3,418 14,269,753 9,244,376 7,833,110 80,060 1,704,398 283,028 226,330 3,265,877 3,640,538 419,629 218,004
Financial liabilities Borrowings 7,105,459 4,846,394 1,804,552 2,451,877 2,300,384 402,579 448,904 1,476,748 500,638 171,505 34,308 Lease liabilities 144,865 94,682 9,568 1,690 749 136 328 6,044 – 555 52,987 Trade and other payables (including intercompany balances) 15,558,948 8,783,013 7,631,753 159,143 1,101,595 187,754 209,428 3,165,330 3,484,296 462,187 141,609 22,809,272 13,724,089 9,445,873 2,612,710 3,402,728 590,469 658,660 4,648,122 3,984,934 634,247 228,904
Net financial (liabilities)/assets (8,539,519) (4,479,713) (1,612,763) (2,532,650) (1,698,330) (307,441) (432,330) (1,382,245) (344,396) (214,618) (10,900)
Net financial liabilities/(assets) denominated in the respective entities’ functional currencies 7,548,222 6,763,231 3,730,485 2,498,076 1,926,502 635,765 460,588 2,156,777 1,063,603 538,980 23,556
Notional amount of currency forwards and cross currency swaps not designated as net investment hedge 904,107 (3,550,734) (1,791,662) 37,757 (191,710) (151,291) – (838,924) (1,138,726) (291,587) –
Loans designated as net investment hedge 39,262 998,615 – – – – – 115,219 189,615 – –
Currency exposures on financial (liabilities)/ assets (47,928) (268,601) 326,060 3,183 36,462 177,033 28,258 50,827 (229,904) 32,775 12,656
207 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
(i) Foreign exchange risk (continued)
The Company’s financial assets and liabilities are mainly denominated in SGD.
The Group’s exposures to currency risk mainly relate to USD exposure for VND functional currency entities, INR and RMB exposures for SGD functional currency entities and EUR exposure for Polish Złoty (“PLN”) functional currency entities.
If the Group’s USD, INR, RMB and EUR exposures change against the respective functional currencies by 3.0% (2020: 3.0%) with all other variables including tax rate being held constant, the effects arising from the Group’s net currency exposures will be as follows:
Group Increase/(Decrease) 2021 2020 Profit Profit after tax after tax $’000 $’000
USD against VND – Strengthened (8,940) (10,665) – Weakened 8,940 10,665
INR against SGD – Strengthened 5,225 816 – Weakened (5,225) (816)
RMB against SGD – Strengthened 5,007 8,119 – Weakened (5,007) (8,119)
EUR against PLN – Strengthened (2,474) (7,018) – Weakened 2,474 7,018
(ii) Price risk
The Group is not exposed to significant equity price risk as it does not hold any significant equity securities which are classified as financial assets, at FVOCI.
(iii) Cash flow and fair value interest rate risk
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. The Group has no significant interest rate risk arising from interest-bearing assets.
208 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
(iii) Cash flow and fair value interest rate risk (continued)
The Group is exposed to interest rate risk on its borrowings. The Group manages the risk by maintaining an appropriate mix of fixed and floating rate interest-bearing liabilities. This is achieved either through fixed rate borrowings or the use of floating-to-fixed interest rate swaps and/or interest rate caps.
The Group enters into interest rate swaps with the same critical terms as the hedged item, such as reference rate, reset dates, payment dates, maturities and notional amount. The Group does not hedge 100% of its loans; therefore the hedged item is identified as a proportion of the outstanding amount of the borrowings. As critical terms matched during the financial year, the economic relationship is deemed to be effective.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedging relationship and through periodic prospective effective assessments to ensure that an economic relationship exists between the hedged item and hedging instrument.
The Group enters into hedge relationships where the critical terms of the hedging instrument match exactly with the terms of the hedged item and so, a qualitative assessment of effectiveness is performed. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative method to assess effectiveness.
Hedge ineffectiveness has occurred due to changes in the critical terms of either the interest rate swaps or the borrowings.
Hedges directly affected by interest rate benchmark reform
Hedging relationships that are impacted by IBOR reform may experience ineffectiveness because of a timing mismatch between the hedged item and the hedging instrument regarding IBOR reform transition. On 5 March 2021, the Financial Conduct Authority (“FCA”) formally announced the dates for the cessation of all LIBOR benchmark settings currently published by the ICE Benchmark Administration. The transition into the new benchmark rates may occur at different times for the hedged item and hedging instruments, which may impact the hedging relationship. The Group applied the amendments to SFRS(I) 9 issued in December 2019 to those hedging relationships directly affected by IBOR reform.
There is no hedge ineffectiveness in relation to the IBOR reform recognised for the financial year. The assumptions taken are disclosed in Note 2.2(a).
As at 31 March 2021, the contractual notional amounts for interest rate swaps held for hedging of interest rate risk arising from variable rate borrowings are as below:
Group Notional amount 2021 Reference rates $’000
SOR 2,088,195 USD − LIBOR 1,980,616 GBP − LIBOR 828,503 JPY − LIBOR 531,226
209 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(a) Market risk (continued)
(iii) Cash flow and fair value interest rate risk (continued)
The Group is actively engaging with its lenders and derivative counterparties to modify floating rate instruments to transit into the new benchmark rates.
If the interest rates increase or decrease by 0.50% (2020: 0.50%) per annum with all other variables including tax rate being held constant, the profit after tax would have been lower by $28.8 million (2020: $33.3 million) and higher by $28.8 million (2020: $33.3 million) as a result of higher and lower interest expense on these borrowings respectively. Other comprehensive income would have been higher by $41.0 million (2020: $66.0 million) and lower by $42.4 million (2020: $68.0 million) mainly as a result of higher/lower fair value of interest rate swaps designated as cash flow hedges of variable rate borrowings.
(b) Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group. The major classes of financial assets of the Group and of the Company are bank deposits and trade and other receivables. For trade receivables, the Group adopts the policy of dealing only with customers of appropriate credit history and obtaining sufficient security where appropriate to mitigate credit risk. For other financial assets, the Group adopts the policy of dealing only with acceptable credit quality counterparties. The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.
The Group has no significant concentration of credit risk. The Group has policies in place to ensure that services are made to customers with an appropriate credit history. Security in the form of bankers’ guarantees, insurance bonds (issued by bankers or insurers of acceptable credit quality) or cash security deposits are obtained prior to the commencement of the lease.
The maximum exposure to credit risk for each class of financial instruments is the carrying amount of that class of financial instruments presented on the statement of financial position, except as follows:
Company 2021 2020 $’000 $’000
Corporate guarantees provided to financial institutions on loans of subsidiaries 9,268,146 9,170,245
Corporate guarantees provided to financial institutions on loans of a joint venture 553,614 –
Bank deposits, deposits placed with a subsidiary, receivables from subsidiaries, associated companies and joint venture and other receivables are subject to immaterial credit losses.
(i) Trade receivables
In measuring the expected credit losses, trade debtors are grouped based on shared credit risk characteristics such as asset class, geographic location and days past due. In calculating the expected credit loss rates, the Group considers historical loss rates for each category of customer and adjusts to reflect current and forward- looking macroeconomic factors affecting the ability of the debtor to settle the receivables. Based on the above, the Group’s credit risk exposure for trade receivables as at 31 March 2021 and 31 March 2020 has been assessed to be immaterial.
210 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Credit risk (continued)
(i) Trade receivables (continued)
Trade receivables are assessed to be in default when one or more events that have a detrimental impact on the estimated future cash flows of that trade debtor have occurred, such as but not limiting to initiation of bankruptcy proceedings or a breach of contract. Trade receivables are impaired (net of security deposits and bankers’ guarantees) when the counterparty fails to make payments in accordance with the contractual terms of agreement. Trade receivables are written off when there is no reasonable expectation of recovery. Where receivables are written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognised in profit or loss.
The Group’s credit risk exposure in relation to trade receivables under SFRS(I) 9 as at 31 March 2021 and 31 March 2020 is set out as follows: <———————— Past due ————————> Less than More than 3 months 3 months Total $’000 $’000 $’000
31 March 2021 Gross carrying amount: – Past due but not impaired 28,932 7,112 36,044 – Past due and impaired 3,718 11,582 15,300 32,650 18,694 51,344 Less: Allowance for impairment (15,224) Net carrying amount 36,120
31 March 2020 Gross carrying amount: – Past due but not impaired 33,126 8,473 41,599 – Past due and impaired – 10,035 10,035 33,126 18,508 51,634 Less: Allowance for impairment (9,925) Net carrying amount 41,709
The Group’s movements in credit loss allowance for trade receivables are as follows: 2021 2020 $’000 $’000
As at 1 April 9,925 7,586 Allowance made 15,676 5,422 Allowance utilised (5,776) (2,038) Allowance reversed (1,966) (100) Disposal (2,548) (1,139) Currency translation differences (87) 194 As at 31 March 15,224 9,925
Other than the above, the Group and the Company believe that no additional loss allowance is necessary in respect of the remaining trade and other receivables in view of the credit management policy as these receivables arise mainly from tenants with good collection records and there is sufficient security in the form of bankers’ guarantees, insurance bonds or cash security deposits as collaterals.
211 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(b) Credit risk (continued)
(ii) Financial guarantees
The Company has issued financial guarantees to financial institutions for borrowings of its subsidiaries. These guarantees are subject to the impairment requirements of SFRS(I) 9. The Company has assessed that its subsidiaries have strong financial capacity to meet the contractual cash flow obligations in the near future and hence, does not expect significant credit losses arising from these guarantees.
(c) Liquidity risk
The Group adopts prudent liquidity risk management by maintaining sufficient cash and committed bank financing to fund its working capital, financial obligations and expected committed capital expenditure requirements.
The table below analyses non-derivative financial liabilities of the Group and the Company into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying amounts as the impact of discounting is insignificant.
Between Less than 1 and 5 Over 5 1 year years years $’000 $’000 $’000
Group 31 March 2021 Trade and other payables 1,448,999 434,063 52,856 Borrowings and interest payable 2,474,960 16,367,533 3,802,184 Lease liabilities 42,597 124,154 166,948 3,966,556 16,925,750 4,021,988
31 March 2020 Trade and other payables 1,186,676 499,765 71,725 Borrowings and interest payable 3,440,066 14,802,964 5,330,681 Lease liabilities 51,774 156,354 231,163 4,678,516 15,459,083 5,633,569
Company 31 March 2021 Trade and other payables 181,997 168,131 31,241 Lease liabilities 9,161 15,627 – 191,158 183,758 31,241
31 March 2020 Trade and other payables 167,516 161,250 32,902 Lease liabilities 7,515 1,420 – 175,031 162,670 32,902
212 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Liquidity risk (continued)
The table below analyses the derivative financial instruments of the Group for which contractual maturities are essential for an understanding of the timing of cash flows into relevant maturity groupings based on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
Between Less than 1 and 5 Over 5 1 year years years $’000 $’000 $’000
Group 31 March 2021 Net-settled interest rate swaps and cross currency swaps – Net cash outflows 83,040 151,825 20,213
Gross-settled currency forwards and cross currency swaps – Receipts (5,849,438) (576,485) – – Payments 5,989,985 633,693 –
31 March 2020 Net-settled interest rate swaps and cross currency swaps – Net cash outflows 52,255 116,028 21,812
Gross-settled currency forwards and cross currency swaps – Receipts (7,213,704) (919,088) (26,613) – Payments 7,398,413 977,807 25,257
(d) Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and maintain an optimal capital structure so as to maximise shareholder value.
The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.
As at 31 March 2021 and 31 March 2020, the Group is required by the financial institutions to maintain a consolidated tangible net worth of not less than $1.0 billion.
There are no changes in the Group’s approach to capital management during the financial year.
213 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
32. FINANCIAL RISK MANAGEMENT (CONTINUED)
(e) Financial instruments by category
The following table sets out the financial instruments as at the balance sheet date:
Group Company $’000 $’000
31 March 2021 Financial assets, at FVPL 164,601 – Financial assets, at FVOCI 68,178 – Financial assets, at amortised cost 2,688,592 9,500,471 Financial liabilities, at FVPL 311,156 – Financial liabilities, at amortised cost 22,417,125 406,157
31 March 2020 Financial assets, at FVPL 110,902 – Financial assets, at FVOCI 69,973 – Financial assets, at amortised cost 3,340,275 9,152,269 Financial liabilities, at FVPL 545,395 – Financial liabilities, at amortised cost 23,700,905 370,603
33. FAIR VALUE MEASUREMENTS
(a) Fair value hierarchy
The following table presents assets and liabilities measured and carried at fair value and classified by level of the following fair value measurement hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The Group’s policy is to recognise transfers into and out of fair value hierarchy levels at the balance sheet date. There are no transfers into or out of fair value hierarchy levels for the financial years ended 31 March 2021 and 2020.
214 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
33. FAIR VALUE MEASUREMENTS (CONTINUED)
(a) Fair value hierarchy (continued)
Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000
Group
31 March 2021 Financial assets Derivative financial instruments – 103,547 – 103,547 Financial assets, at FVPL – – 61,054 61,054 Financial assets, at FVOCI – – 68,178 68,178 – 103,547 129,232 232,779
Financial liabilities Derivative financial instruments – (311,156) – (311,156)
Non-financial assets Investment properties – – 42,957,430 42,957,430 Properties under development – – 1,606,316 1,606,316 Property, plant and equipment – – 132,485 132,485 – – 44,696,231 44,696,231
31 March 2020 Financial assets Derivative financial instruments – 62,160 – 62,160 Financial assets, at FVPL – – 48,742 48,742 Financial assets, at FVOCI – – 69,973 69,973 – 62,160 118,715 180,875
Financial liabilities Derivative financial instruments – (545,395) – (545,395)
Non-financial assets Investment properties – – 46,371,136 46,371,136 Properties under development – – 1,129,656 1,129,656 Property, plant and equipment – – 162,255 162,255 – – 47,663,047 47,663,047
215 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
33. FAIR VALUE MEASUREMENTS (CONTINUED)
(b) Valuation techniques
(i) Financial assets and financial liabilities at fair value
The fair value of financial instruments traded in active markets is based on quoted market prices as at the balance sheet date. The quoted market price used for the quoted financial instruments held by the Group is the current bid price. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. The fair value of interest rate swaps and interest rate caps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward currency rates as at the balance sheet date. These investments are classified as Level 2 and comprise derivative financial instruments.
The fair values of financial assets, at FVPL and FVOCI are classified as Level 3 and are determined using the present value of the estimated future cash flows and net asset values of the investee companies respectively.
(ii) Non-financial assets at fair value
Level 3 fair values of the Group’s investment properties and leasehold land and building classified under property, plant and equipment have been generally derived using the following methods:
• Income capitalisation − Properties are valued by capitalising net leasing income after property tax at a rate which reflects the present and potential income growth over the unexpired lease term.
• Discounted cash flows − Properties are valued by discounting the future net income stream over a period to arrive at a present value.
• Direct comparison − Properties are valued using transacted prices for comparable properties in the vicinity and elsewhere with adjustments made for differences in location, tenure, size, shape, design, layout, age and condition of the buildings, availability of car parking facilities, dates of transactions and prevailing market conditions.
• Residual value − Investment properties under redevelopment or properties under development are valued, as a starting point, using the direct comparison method, income capitalisation method and/or discounted cash flow method to derive the fair value of the property as if the redevelopment or development was already completed as at the balance sheet date. Deductions from that fair value, such as estimated construction cost and other costs to completion and estimated profit margin required to hold and develop property to completion, are made to reflect the current condition of the property under redevelopment and development.
Fair values of investment properties are determined by external independent valuers. The valuations of significant properties are presented to and discussed with the Audit and Risk Committee as well as the Board of Directors.
Management is of the view that the valuation methods and estimates adopted and considered by professional valuers were based on information available and reflective of market conditions as at 31 March 2021. Certain valuation reports have highlighted that with the uncertainty of COVID-19, the valuation of these properties subsequent to the balance sheet date may be subjected to more fluctuation than during normal market conditions and have recommended to keep the valuation of these properties under frequent review.
216 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
33. FAIR VALUE MEASUREMENTS (CONTINUED)
(b) Valuation techniques (continued)
(iii) Financial assets and financial liabilities not carried at fair values
The carrying values of trade and other receivables, other assets and trade and other payables approximate their fair values. The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. The fair values of borrowings approximate their carrying amounts as the interest rates of such loans are adjusted for changes in relevant market interest rates except for the fixed rate medium term notes of $3.4 billion (2020: $3.7 billion) whose fair value amounted to $3.6 billion (2020: $3.7 billion), determined from adjusted quoted prices.
(c) Level 3 assets measured at fair value
The movements of non-financial assets classified under Level 3 for completed investment properties and investment properties under redevelopment are presented in Note 18, properties under development in Note 19 and leasehold land and building under property, plant and equipment in Note 20.
The following table presents the valuation techniques and key inputs that were used to determine the fair value of the non-financial assets classified under Level 3 of the fair value hierarchy:
Relationship of unobservable Description Valuation techniques Key unobservable inputs inputs to fair value
Completed investment Income capitalisation Capitalisation rate The higher the capitalisation properties • Singapore: 3.5% to 9.5% rate, the lower the fair value. (2020: 3.5% to 9.5%) • Others: 2.6% to 11.0% (2020: 3.8% to 11.0%)
Direct comparison Adjusted price The higher the adjusted • Singapore: $27,599 psm price, the higher the fair (2020: $26,942 psm) value. • Others: $1,860 to $15,222 psm (2020: $372 to $14,857 psm)
Discounted cash flows Discount rate The higher the discount • Singapore: 6.5% to 12.5% rate, the lower the fair (2020: 6.5% to 12.5%) value. • Others: 2.3% to 16.0% (2020: 3.4% to 15.5%)
Terminal yield The higher the terminal • Singapore: 3.8% to 7.8% yield, the lower the fair (2020: 4.3% to 7.6%) value. • Others: 2.7% to 11.0% (2020: 3.7% to 11.0%)
217 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
33. FAIR VALUE MEASUREMENTS (CONTINUED)
(c) Level 3 assets measured at fair value (continued)
Relationship of unobservable Description Valuation techniques Key unobservable inputs inputs to fair value
Investment properties Residual value Gross development valuation The higher the gross under redevelopment • Singapore: $18,115 psm development valuation, the (2020: $18,014 to $27,165 psm) higher the fair value.
Development cost The higher the development • Singapore: $4,164 psm cost, the lower the fair value. (2020: $3,831 to $4,162 psm)
Properties under Direct comparison Adjusted price The higher the adjusted development • Others: $59 to $1,241 psm price, the higher the fair (2020: $53 to $195 psm) value.
Residual value Gross development valuation The higher the gross • Others: $556 to $17,478 psm development valuation, the (2020: $601 to $1,211 psm) higher the fair value.
Development cost The higher the development • Others: $389 to $6,009 psm cost, the lower the fair value. (2020: $545 to $960 psm)
Leasehold land and Income capitalisation Capitalisation rate The higher the capitalisation building classified as • Others: Nil (2020: 8.8%) rate, the lower the fair value. property, plant and equipment Discounted cash flows Discount rate The higher the discount rate, • Others: 12.5% (2020: Nil) the lower the fair value.
Terminal yield The higher the terminal yield, • Others: 8.5% (2020: Nil) the lower the fair value.
34. IMMEDIATE AND ULTIMATE HOLDING COMPANIES
The Company’s immediate holding company is Fullerton Management Pte Ltd, incorporated in Singapore. The ultimate holding company is Temasek Holdings (Private) Limited, incorporated in Singapore.
218 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
35. RELATED PARTY TRANSACTIONS
For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the direct and indirect ability to control the party, jointly control or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or significant influence.
In addition to the information disclosed elsewhere in the financial statements, the following transactions took place between the Group and related parties during the financial year:
(a) Sales and purchases of goods and services
Group 2021 2020 $’000 $’000
Leasing and other services to related corporations 41,260 57,637 Purchase of goods/services from related corporations 4,583 18,526 Fees from provision of fund management services to associated companies 142,449 195,278 Dividend income from associated companies 231,816 142,490 Dividend income from joint ventures 94,454 26,696 Interest expense to related corporations 66,883 83,107 Trustee’s fees to Trustee 1,906 2,410 Acquisition of company from an associated company – 320,704 Return of capital from associated companies 159,881 375,659 Return of capital from joint ventures 224,989 –
(b) Key management personnel compensation
Group 2021 2020 $’000 $’000
Salaries and other short-term employee benefits 25,146 25,982 Post-employment benefits − Contribution to CPF 213 219 Share-based compensation expenses 36,128 28,335 61,487 54,536
Salaries and other short-term employee benefits disclosed include bonus allocated to the key management personnel for the financial year. Bonus that were accrued but not allocated will be disclosed in the corresponding financial years when allocated.
(c) PSU and RSU granted to key management
During the financial year, the Group granted 3,682,797 PSU and 2,077,250 RSU (2020: 7,003,352 PSU and 4,215,165 RSU) to key management of the Group under the share-based compensation plans as set out in Note 28. The PSU and RSU were given on the same terms and conditions as those offered to other employees of the Group. The outstanding number of PSU and RSU as at 31 March 2021 granted by the Group to key management of the Group were 24,437,102 and 6,402,880 (2020: 24,213,156 and 7,243,169) respectively.
219 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
36. DIVIDENDS
Group and Company 2021 2020 $’000 $’000
Final exempt (one-tier) redeemable preference share dividends paid in respect of the prior financial year of $1,000 (2020: $1,000) per redeemable preference share 15,700 15,700 Final exempt (one-tier) ordinary share dividend paid in respect of the prior financial year of 15.3250 cents (2020: 16.8208 cents) per ordinary share 233,600 256,400 249,300 272,100
At the Annual General Meeting to be held, the following dividends will be proposed:
– Final exempt (one-tier) redeemable preference share dividend of $1,000 (2020: $1,000) per redeemable preference share amounting to $15.7 million (2020: $15.7 million); and
– Final exempt (one-tier) ordinary share dividend of 14.6493 cents (2020: 15.3250 cents) per ordinary share amounting to $223.3 million (2020: $233.6 million).
These financial statements do not reflect the above dividends, which will be accounted for in shareholder’s equity as an appropriation of retained earnings in the financial year ending 31 March 2022.
220 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
37. SEGMENT REPORTING
The operating segments are determined based on the segment reports reviewed by the Executive Management Committee (“EMC”) for strategic and operational decision-making purposes. The EMC comprises the Group Chief Executive Officer, Deputy Group Chief Executive Officer, Group Chief Financial Officer, Group Chief Corporate Officer, Group Chief Development Officer, Head of Operations System & Control and the heads of each business unit.
The EMC considers the business from both a geographic and business segment perspective.
The following summary describes the operations from the business segment perspective:
• South East Asia and Group Retail Developer/investor/manager of commercial properties (and select industrial properties) in Singapore and properties in South East Asia
• Logistics Development Developer/manager of logistics properties in Australia, China, India, Malaysia and Vietnam
• China and India Developer/investor/manager of properties in China and India
• Australia and North Asia Developer/investor/manager of properties in Australia, Hong Kong SAR, Japan and South Korea
• Group Lodging Developer/investor/manager of global lodging properties in North America, the United Kingdom and Oakwood
• Europe and USA Developer/investor/manager of properties in Europe, North America and the United Kingdom
• Singapore-listed REITs Mapletree Logistics Trust, Mapletree Commercial Trust, Mapletree North Asia Commercial Trust and Mapletree Industrial Trust
• Others Investor of data centres in the United States and corporate departments
221 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
37. SEGMENT REPORTING (CONTINUED)
The segment information provided to the EMC for the reportable segments is as follows:
South East Asia and Australia Singapore- Group Logistics China and North Group Europe listed Retail Development and India Asia Lodging and USA REITs Others Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2021 Revenue 408,790 95,869 95,129 61,866 267,536 334,851 1,583,398 34,393 2,881,832
Segmental results Earnings/(losses) before revaluation gains/ (losses), interest and tax 221,132 59,308 72,203 41,189 60,378 225,081 2,182,815 (240,751) 2,621,355 Net revaluation (loss)/ gain on investment properties and properties under development (30,772) 187,927 2,583 325,513 (90,600) 48,106 (442,719) 100,001 100,039 Share of profit in associated companies and joint ventures 8,108 2,006 16,486 46 2,022 189,918 25,212 17,520 261,318 198,468 249,241 91,272 366,748 (28,200) 463,105 1,765,308 (123,230) 2,982,712
Finance costs − net – – – – – – (241,133) (237,521) (478,654) Tax expense – – – – – – (199,879) (195,734) (395,613) Profit for the financial year 2,108,445
Segment assets 3,781,082 3,537,891 3,992,503 2,139,888 3,860,560 5,385,378 30,085,897 816,283 53,599,482
Segment liabilities 227,276 418,071 274,687 118,156 205,413 213,346 11,984,158 10,191,537 23,632,644
Other segment items Depreciation and amortisation (17,868) (148) (513) (497) (5,132) (4,868) (2,073) (8,925) (40,024)
South China East Asia (excluding Hong The (excluding Hong Kong United Rest of Singapore Singapore) Kong SAR) SAR Japan Europe States Australia the World Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2021 Geography information
Revenue 959,429 351,559 256,397 305,200 207,350 260,477 361,912 54,833 124,675 2,881,832
Non-current assets 15,574,979 2,134,868 7,902,444 7,321,994 3,614,768 3,157,136 5,916,809 1,169,797 2,686,608 49,479,403
Total assets 16,371,657 2,624,880 9,600,884 7,362,839 3,896,392 3,561,308 6,099,678 1,181,653 2,900,191 53,599,482
222 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
37. SEGMENT REPORTING (CONTINUED)
South East Australia Singapore- Asia and Logistics China and North Group Europe listed Group Retail Development and India Asia Lodging and USA REITs Others Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2020 Revenue 382,115 110,773 157,533 227,731 674,647 646,116 1,735,669 95,427 4,030,011
Segmental results Earnings/(losses) before revaluation gains/ (losses), interest and tax 252,727 49,144 151,723 139,857 22,417 401,186 1,437,204 (212,107) 2,242,151 Net revaluation gain on investment properties and properties under development 255,403 170,983 122,639 32,778 56,326 101,414 414,278 104,620 1,258,441 Share of profit in associated companies and joint ventures 12,155 24 55,679 67,510 17,532 91,991 – 62,479 307,370 520,285 220,151 330,041 240,145 96,275 594,591 1,851,482 (45,008) 3,807,962
Finance costs − net – – – – – – (277,253) (411,814) (689,067) Tax expense – – – – – – (108,578) (214,148) (322,726) Profit for the financial year 2,796,169
Segment assets 3,991,524 3,389,420 2,663,873 1,367,628 3,993,872 5,438,673 30,909,021 3,857,428 55,611,439
Segment liabilities 382,423 271,257 189,318 73,363 280,223 329,701 12,671,570 10,879,241 25,077,096
Other segment items Depreciation and amortisation (18,240) (215) (481) (534) (25,404) (2,755) (1,665) (9,783) (59,077)
South China East Asia (excluding The (excluding Hong Kong Hong Kong United Rest of Singapore Singapore) SAR) SAR Japan Europe States Australia the World Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2020 Geography information
Revenue 1,358,746 213,848 327,451 317,894 257,184 402,053 962,399 110,949 79,487 4,030,011
Non-current assets 18,276,463 2,240,724 6,105,419 7,767,059 2,969,785 4,285,100 7,606,105 777,174 1,488,193 51,516,022
Total assets 19,182,321 2,805,760 6,959,606 7,806,807 3,869,142 4,717,434 7,845,283 818,463 1,606,623 55,611,439
Sales between segments are carried out at market terms. The revenue from external parties reported to the EMC is measured in a manner consistent with that in the statement of profit or loss.
The EMC assesses the performance of the operating segment based on a measure of earnings before interest and tax plus share of operating profits in associated companies and joint ventures. The accounting policies of the reportable segments are the same as the Group’s accounting policies as described in Note 2. Segment profit represents the profit earned by each segment without allocation of central administration costs. Excluding the Singapore-listed REITs, borrowings, finance income and finance expenses are not allocated to segments but grouped under “others” (which includes corporate departments) as such liabilities and expenses are centrally monitored at the corporate level.
223 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
38. LISTING OF SIGNIFICANT ENTITIES IN THE GROUP
(a) Subsidiaries Effective Country of interest held incorporation/ by the Group Place 2021 2020 Name of companies Principal activities of business % %
Held by the Company
Mapletree Dextra Pte. Ltd. Investment holding Singapore 100 100
Mapletree Treasury Services Limited Finance and treasury centre Singapore 100 100 performing financial and treasury operations and activities for the holding and related companies within the Group
The HarbourFront Pte Ltd Property owner Singapore 100 100
Held by subsidiaries
Beijing Yinhe Yongtai Business Property owner China 100 100 Management Co., Ltd.
Guangzhou Xingjian Xingsui Real Property owner China 100 65 Estate Co., Ltd 1
Adamas Builders Private Limited Property owner India 100 100
Faery Estates Private Limited Property owner India 100 100
HarbourFront Centre Pte. Ltd. Property owner Singapore 100 100
HarbourFront Two Pte Ltd Property owner Singapore 100 100
Oakwood Worldwide (Asia) Pte. Ltd. Management services Singapore 100 100
Godo Kaisha Namba 3-Chome Kaihatsu Jigyo Property owner Japan 100 90
Hardman Investments Unit Trust Property owner Jersey/ – 100 The United Kingdom
Green Park Reading No. 1 LLP Property owner The United 100 100 Kingdom
Pine (UK) Holdings Ltd Management services The United 100 100 Kingdom
224 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
38. LISTING OF SIGNIFICANT ENTITIES IN THE GROUP (CONTINUED)
(a) Subsidiaries (continued)
Effective Country of interest held incorporation/ by the Group Place 2021 2020 Name of companies Principal activities of business % %
Held by subsidiaries (continued)
Coventry Assets (UK) Limited Property owner The United 100 100 Kingdom
Uptown Broadway LLC 2 Property owner The United 100 – States
Oakwood Worldwide (US) LP Management services The United 100 100 States
Boulevard City LLC Property owner The United 100 100 States
Chester Loft LLC Property owner The United 100 100 States
South Sixth Office LLC Property owner The United 100 100 States
EM Chestnut Venture LLC Property owner The United 97 97 States
Nova Asset (Dublin) Limited Property owner Ireland 100 100
Saigon Boulevard Complex Company Limited Property owner Vietnam 100 100
IGIS Qualified Investment Type Private Property owner Korea 69 – Placement Real Estate Investment Trust No.6 2
Mapletree Redwood Data Centre Trust Property owner Singapore/ – 72 The United States
Mapletree Logistic Trust 3 Property owner Singapore 31 30 – Real Estate Investment Trust
Mapletree North Asia Commercial Trust 3 Property owner Singapore 37 36 – Real Estate Investment Trust
Mapletree Commercial Trust 3 Property owner Singapore 32 32 – Real Estate Investment Trust
225 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
38. LISTING OF SIGNIFICANT ENTITIES IN THE GROUP (CONTINUED)
(b) Associated companies
Effective Country of interest held incorporation/ by the Group Place 2021 2020 Name of companies Principal activities of business % %
Held by subsidiaries
Mapletree Industrial Trust 4 Property owner Singapore 27 29 – Real Estate Investment Trust
Mapletree China Opportunity Investment holding and Cayman Islands/ 36 36 Fund II Feeder LP property owner China
MGSA Private Trust Investment holding and Singapore/ 34 34 property owner The United States/ The United Kingdom
MUSEL Private Trust Investment holding and Singapore/ 34 33 property owner The United States/ Europe
MASCOT Private Trust Investment holding and Singapore/ 25 24 property owner Australia
Mapletree Europe Income Trust (MERIT) 2 Investment holding and Singapore/ 37 – property owner The United Kingdom/Europe
(c) Joint ventures
Held by subsidiaries
Mapletree Rosewood Data Centre Trust 5 Property owner Singapore/ 50 65 The United States
Blue Sling Ventures LLC 6 Investment holding and The United 40 52 property owner States
1 The Group has accounted for this investment as an associated company as at 31 March 2020 as key decisions on relevant activities are made by an independent board in which the Group does not have majority or control. 2 Incorporated/acquired during the financial year 3 Control of the REITs without majority equity interest and voting power (Note 17) 4 Mapletree Industrial Trust is accounted for as an associated company as at 31 March 2021 and as a subsidiary as at 31 March 2020 (Note 3(b)). 5 Mapletree Rosewood Data Centre Trust is accounted for as a joint venture as at 31 March 2021 and as a subsidiary as at 31 March 2020 (Note 3(b)). 6 The Group has accounted for this investment as a joint venture as the Group has joint control over the relevant activities with the joint venture partner.
226 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
39. SUMMARISED FINANCIAL INFORMATION OF SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS
The Group’s subsidiaries with material non-controlling interests (“NCI”) comprise the following:
Group 2021 2020 $’000 $’000
MLT 3,909,627 3,200,738 MCT 3,854,102 3,917,881 MIT (Note 3(b)) – 2,520,050 MNACT 2,743,308 3,003,318 Others 39,637 47,405 10,546,674 12,689,392
The REITs are regulated by the Monetary Authority of Singapore and supervised by the Singapore Exchange Securities Trading Limited for compliance with the Singapore Listing Rules. Under the regulatory framework, transactions with the REITs are either subjected to review by the trustee of the REITs or significant transactions must be approved by a majority of votes by the remaining unitholders in the REITs at a meeting of unitholders. Under the respective trust deeds, neither the Group nor any other unitholders have the right to transfer assets (or part therefore) of the REITs to other entities within or outside of the Group.
Set out below are the summarised financial information of the REITs. These are presented before intra-group eliminations.
Summarised statements of financial position
MLT MCT MIT MNACT $’000 $’000 $’000 $’000
31 March 2021 Assets – Current assets 362,868 206,551 – 272,714 – Non-current assets 10,841,805 8,744,033 – 7,815,959
Liabilities – Current liabilities (474,886) (186,437) – (366,877) – Non-current liabilities (4,610,601) (3,055,179) – (3,336,673) Net assets 6,119,186 5,708,968 – 4,385,123
Net assets attributable to NCI 3,909,627 3,854,102 – 2,743,308
31 March 2020 Assets – Current assets 223,414 73,262 69,556 228,129 – Non-current assets 8,827,959 8,933,811 5,118,327 8,358,545
Liabilities – Current liabilities (428,536) (264,797) (101,028) (541,890) – Non-current liabilities (3,605,346) (2,955,328) (1,526,734) (3,314,154) Net assets 5,017,491 5,786,948 3,560,121 4,730,630
Net assets attributable to NCI 3,200,738 3,917,881 2,520,050 3,003,318
227 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
39. SUMMARISED FINANCIAL INFORMATION OF SUBSIDIARIES WITH MATERIAL NON-CONTROLLING INTERESTS (CONTINUED)
Summarised statements of comprehensive income
MLT MCT MIT MNACT $’000 $’000 $’000 $’000
2021 Revenue 561,140 478,997 99,106 391,415
Profit before income tax 565,719 68,609 72,495 (228,103) Income tax expense (101,709) (3) – (36,459) Profit after income tax 464,010 68,606 72,495 (264,562) Other comprehensive income/(loss) 11,554 5,427 (6,879) (47,759) Total comprehensive income 475,564 74,033 65,616 (312,321)
Total comprehensive income allocated to NCI 327,562 49,991 46,658 (193,724) Dividends paid to NCI (221,502) (113,770) (88,946) (71,747)
2020 Revenue 490,777 482,825 405,858 354,478
Profit before income tax 446,478 543,097 367,199 161,718 Income tax expense (51,176) (2) (56) (37,452) Profit after income tax 395,302 543,095 367,143 124,266 Other comprehensive (loss)/income (12,304) (24,633) (31,466) 84,914 Total comprehensive income 382,998 518,462 335,677 209,180
Total comprehensive income allocated to NCI 254,838 342,459 234,310 139,198 Dividends paid to NCI (204,071) (185,147) (154,583) (182,114)
Summarised statement of cash flows
MLT MCT MIT MNACT $’000 $’000 $’000 $’000
2021 Net cash generated from operating activities 446,640 355,435 – 313,106
Net cash used in investing activities (1,270,399) (13,737) – (133,859)
Net cash generated from/(used in) financing activities 950,027 (215,012) – (136,215)
Net increase in cash and cash equivalents 126,268 126,686 – 43,032
2020 Net cash generated from operating activities 369,265 370,216 286,886 265,768
Net cash used in investing activities (515,808) (904,239) (429,425) (476,250)
Net cash generated from financing activities 191,615 550,761 155,953 221,300
Net increase in cash and cash equivalents 45,072 16,738 13,414 10,818
228 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
40. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINT VENTURES
(a) Acquisition of subsidiaries which does not constitute a business combination
The cash flows and net assets of subsidiaries acquired are provided below:
Group 2021 2020 $’000 $’000
Cash and cash equivalents 267,455 31,527 Trade and other receivables 11,363 32,077 Other assets 28,660 5,046 Investment properties (Note 18) 1,811,919 691,110 Properties under development (Note 19) 116,435 – Property, plant and equipment (Note 20) – 29 Trade and other payables (362,601) (43,201) Net deferred income tax liabilities (Note 27) (6,819) – Borrowings (479,485) (76,677) Net assets acquired/Total purchase consideration 1,386,927 639,911
Less: Cash of subsidiaries acquired (267,455) (31,527) Deposits paid in prior financial year – (3,169) Acquisition cost paid in prior years (385,000) – Deferred purchase consideration (50,375) – Cash outflow on acquisition 684,097 605,215
(b) Disposal of subsidiaries, associated companies and joint ventures
Group 2021 2020 $’000 $’000
Cash and cash equivalents 120,648 341,510 Trade and other receivables 81,110 134,844 Other assets 2,167 23,971 Assets of disposal group held for sale – 1,720,248 Investments in joint ventures 54,289 – Investment properties (Note 18) 1,969,100 7,348,944 Property under development (Note 19) 57,576 4,409 Property, plant and equipment (Note 20) 28 896 Trade and other payables (66,809) (206,756) Liabilities directly associated with disposal group held for sale – (734,653) Borrowings (1,749,167) (4,346,601) Lease liabilities – (11,534) Deferred income tax liabilities (Note 27) (4,166) (16,114) Non-controlling interests – (1,078,521) Net assets disposed 464,776 3,180,643 Equity interest retained in associated companies (299,925) (1,220,419) Gain on disposal (Note 5) 43,183 15,938 Release of foreign currency translation reserve and hedging reserve (10,683) 1,170 197,351 1,977,332 Less: Cash of subsidiaries disposed (120,648) (341,510) Cash inflow on disposal 76,703 1,635,822
229 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
40. ACQUISITION AND DISPOSAL OF SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINT VENTURES (CONTINUED)
(c) Deconsolidation of subsidiaries
Group 2021 $’000
Cash and cash equivalents 212,691 Trade and other receivables 62,338 Other assets 1,562 Derivative financial assets 4,012 Investment in joint venture 1,179,280 Investment properties (Note 18) 6,419,430 Property, plant and equipment (Note 20) 150 Intangible assets (Note 23) 8,327 Trade and other payables (245,457) Derivative financial liabilities (67,162) Borrowings (3,313,283) Lease liabilities (27,041) Deferred income tax liabilities (Note 27) (9,251) Non-controlling interests (2,477,761) Net assets deconsolidated 1,747,835 Equity interest retained in associated companies (2,609,746) Gain on deconsolidation of subsidiaries (Note 5) 829,991 Release of foreign currency translation reserve and hedging reserve 31,920 – Less: Cash of subsidiaries deconsolidated (212,691) Cash outflow on deconsolidation (212,691)
Included in gain on deconsolidation of subsidiaries is gain attributable to measurement of retained equity interest at fair value on the date when control was lost.
41. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS
Below are the mandatory standards and interpretations to existing standards that have been published and are relevant for the Group’s financial year beginning on or after 1 April 2021 and which the Group has not early adopted:
(a) Amendments to SFRS(I) 1-1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (effective for annual periods beginning on or after 1 January 2023)
The narrow-scope amendments to SFRS(I) 1-1 Presentation of Financial Statements clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). The amendments also clarify what SFRS(I) 1-1 means when it refers to the ‘settlement’ of a liability.
The amendments could affect the classification of liabilities, particularly for entities that previously considered management’s intentions to determine classification and for some liabilities that can be converted into equity.
The Group does not expect any significant impact arising from applying these amendments.
230 MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2020/2021 NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 MARCH 2021
41. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS (CONTINUED)
(b) Amendments to SFRS(I) 9, SFRS(I) 1-39, SFRS(I) 7 and SFRS(I) 16 (effective for annual periods beginning on or after 1 January 2021)
The Phase 2 amendments to SFRS(I) 9, SFRS(I) 1-39, SFRS(I) 7 and SFRS(I) 16 are applicable for periods beginning on or after 1 January 2021 (“Phase 2 amendments”). The Phase 2 amendments provide further reliefs for hedge accounting as well as practical expedients for modifications of debt instruments and lease liabilities for lessees with IBOR based terms. The Group has not early adopted the Phase 2 amendments.
Management is currently assessing the impact of the Phase 2 amendments on the Group.
42. AUTHORISATION OF FINANCIAL STATEMENTS
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors of Mapletree Investments Pte Ltd on 19 May 2021.
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MAPLETREE INVESTMENTS PTE LTD 10 Pasir Panjang Road #13-01 Mapletree Business City Singapore 117438 Tel : +65 6377 6111 Fax: +65 6273 2753 www.mapletree.com.sg Co. Reg. No.: 200010560E