88. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020

INVESTMENT ACTIVITIES AND CAPITAL MANAGEMENT

Mapletree’s capital Mapletree has built up a wealth of fundraising capabilities. As at experience in the real estate capital 31 March 2020, Mapletree has assets management business management market. The Group is under management (AUM) of S$60.5 focuses on the management currently managing or has managed billion, of which S$42.2 billion (69.8% of public-listed real estate 14 capital management vehicles of AUM) are third-party managed on behalf of many of the world’s assets under four -listed investment trusts (REITs) top institutional investors including REITs and six private funds1. In the and private real estate funds. sovereign wealth funds, pension last decade, Mapletree has grown Through a wide array of funds, insurance companies, banks its third-party AUM by more than and private investors. Our real estate five times. investment platforms, the portfolio offers investors exposure to Group offers real estate both diversified and sector-focused In line with our business objective to portfolios across the public and deliver consistent and high returns, investment opportunities private real estate markets. Mapletree constantly seeks new across diversified asset opportunities to launch new capital classes to meet different The Group has built a strong management platforms and focuses reputation as an industry leader on building lasting relationships with needs and risk profiles in the Singapore REIT market and its capital partners by leveraging its of both retail and institutional private capital management business strong pipeline and performance of with origination, structuring and real estate assets. investors.

FIVE-YEAR GROWTH IN THIRD-PARTY AUM & CAPITAL UNDER MANAGEMENT (S$ million)

48,000 42,204 42,000 37,747

36,000 31,051 28,111 30,000

22,972 23,453 24,000 21,839 19,043 17,880 18,000 15,569

12,000

6,000

0 FY15/16 FY16/17 FY17/18 FY18/19 FY19/20

Funds Under Management Third-Party AUM 89.

mixed-use property developments Enhanced Capital Management Portfolio with New Australian Fund – in two large emerging economies, Mapletree Commercial Private Trust (MASCOT) and . Upon the end of Mapletree has continued to boost its capital management capabilities and its investment period in 2013, MIC expanded its geography of private funds in Financial Year 2019/2020 (FY19/20). Fund1 had made seven investments. In November 2019, Mapletree successfully closed a commercial private trust The projects have been progressively in Australia, MASCOT, with A$654 million (~S$592 million) in equity. Mapletree divested since 2011 and the fund was retained a 24%2 stake in MASCOT, demonstrating alignment of its interest with fully realised in April 2020, achieving those of the investors. MASCOT aims to deliver an attractive total return by a net IRR4 estimated at 13.6% and investing in high quality commercial assets in Australia. It is a fully invested 2.0 times equity multiple. income yielding fund comprising 10 commercial assets strategically located in key gateway cities namely Sydney, Melbourne, Adelaide, Brisbane and Perth. DELIVERING STABLE RETURNS BACKED BY STRONG SPONSOR

US$1.8 billion (~S$2.5 billion) Equity Raised for Mapletree’s First Pan United Mapletree continues to syndicate States (US)-European Logistics Fund – Mapletree US & EU Logistics Private Trust (MUSEL) new private funds to meet investors’ needs, as well as deliver strong and The Group has also successfully completed its syndication of MUSEL. MUSEL is sustainable returns to investors via a fully invested income yielding portfolio comprising 262 logistics assets across its listed platforms. Strengthening 26 states in the US and 20 cities across seven European countries, with a total the Group’s capital management investment value of US$4.3 billion (~S$6 billion), raising a total of US$1.8 billion capability is an important strategy to (~S$2.5 billion) in equity. Despite the competitive fundraising environment, it achieve its optimal capital structure. attracted strong investor support from a geographically diversified group of The Group’s four Singapore-listed investors that includes insurance companies, financial institutions and family REITs – namely MLT, Mapletree offices. Mapletree continues to retain a 33%2 stake in MUSEL to align with Industrial Trust, Mapletree investor interests, similar to its approach with other sponsored private funds Commercial Trust and Mapletree and its four Singapore-listed REITs. North Asia Commercial Trust – have performed strongly, maintained credible earnings and consistently The success in syndicating both Upon the end of its investment period delivered strong returns to its MASCOT and MUSEL is testament in 2017, MJLD had made 12 investments, investors since their respective initial 3 to the strong confidence that which account for around 80% of public offerings. This demonstrates investors have in Mapletree’s capital MJLD’s capital commitment. The the high quality of Mapletree’s management and global real estate divestment of the projects started in REITs and their portfolios, as well as capabilities. 2018 with the earliest divestment of Mapletree as a committed and strong three assets in September 2018. The sponsor. The four REITs also achieved In addition to MASCOT and MUSEL, fund sold six assets as a portfolio to a an annual distribution yield per unit of Mapletree manages four other funds fund managed by Blackstone in July between 4.4% and 8.5% in FY19/20. – Mapletree China Opportunity Fund 2019. The divestment of other assets II (MCOF II), Mapletree India China took place subsequently with the final Fund (MIC Fund), Mapletree Global asset disposed to Mapletree Logistics BROADENING OUR GLOBAL Student Accommodation Private Trust Trust (MLT) in February 2020. With the PRESENCE (MGSA) and Mapletree’s -focused divestment of all the assets, MJLD is on logistics development fund (MJLD). track to deliver an expected return of During the year, Mapletree further 1.8 times equity multiple and net IRR4 expanded globally, beyond Asia, in UPCOMING SUCCESSFUL of 23.7%, attesting to the Group’s ability terms of its investment footprint and EXIT OF MJLD to deliver high returns to its investors. client coverage. The Group enlarged its commercial portfolio in Europe MJLD was launched in 2014 with a ACHIEVED A SUCCESSFUL by acquiring office assets in Ireland committed capital of JPY51 billion EXIT – MIC FUND and . The AUM for the Europe (~S$689 million) which exceeded commercial portfolio is approximately the original target of JPY44 billion MIC Fund was launched in 2008 S$2 billion, representing approximately (~S$594 million). The fund was set up with a committed capital of 10% of the overall commercial AUM with an objective to invest in logistics US$1.2 billion (~S$1.7 billion). The of Mapletree. In September 2019, the development assets and select fund was set up with an objective to Group and Mapletree Industrial Trust completed logistics assets in Japan. invest in commercial, residential and (MIT) announced the 50:50 joint 90. MAPLETREE INVESTMENTS PTE LTD ANNUAL REPORT 2019/2020

INVESTMENT ACTIVITIES AND CAPITAL MANAGEMENT venture to acquire 10 powered shell global real estate manager with a business by developing innovative data centres from Digital Realty, high quality, diversified international real estate investment products that and to enter into a joint venture investor base. The Group endeavors cater to the varying investment needs with Digital Realty to co-invest in to align the development of current and risk-return profiles of investors. three existing Digital Realty hyperscale and new products with its investors’ The Group is currently exploring the data centres. The total transaction evolving investment requirements. possibility of launching a private fund is valued at US$1.4 billion (~S$1.9 Mapletree will continue to grow with its Europe commercial portfolio. billion). Mapletree has become a truly the size of its capital management

Name of Fund/ Brief Launch/ Investment Investment Fund Life Fund Size/ REIT Description Listing Universe Focus (Years) NAV5 Date Private Funds – Existing Mapletree Established with the objective 2019 Australia Commercial 5 A$654 Australia to invest in income generating million Commercial commercial assets that are (~S$592 Private Trust strategically located in key million) (MASCOT) Australian gateway cities. Mapletree Established with the objective 2019 The US and Logistics 7 US$1.8 US & EU Logistics to invest in high quality and Europe billion Private Trust strategically located logistics (~S$2.5 (MUSEL) asset in the US and Europe. billion) Mapletree Established with the objective 2017 The UK and Student 5 US$535 Global Student to invest in an attractive and the US Accommodation million Accommodation resilient income-producing (~S$742 Private Trust student accommodation million) (MGSA) portfolio in the UK and the US. MJLD Established with the objective 2014 Japan Logistics 6 JPY51 of generating attractive total billion returns by investing in logistics (~S$689 development assets in Japan. million) Mapletree China Established with the objective 2013 China Commercial, 9 US$1.4 Opportunity Fund of maximising total returns Industrial, billion II (MCOF II) by investing in a portfolio Residential and (~S$1.9 of development projects Mixed-use billion) and projects with value enhancement potential located in Tier 1 and Tier 2 cities in China. Mapletree India Established with the objective 2008 China and Commercial and 12 US$1.2 China Fund of maximising total returns India Mixed-use billion (MIC Fund)1 by acquiring, developing and (~S$1.7 realising real estate projects in billion) China and India. 91.

Name of Fund/ Brief Launch/ Investment Investment Fund Size/ REIT Description Listing Universe Focus NAV5 Date Private Funds – Fully realised MJOF Established with the objective of 2014 Japan Commercial JPY65 generating a stable and recurring income billion yield with an attractive total return, by (~S$878 investing predominantly in income- million) generating offi ce spaces located primarily on or around the fringe of Tokyo CBD and within the Greater Tokyo area. Fully realised and achieved 1.9 times equity multiple and net IRR4 of 27.2%.

Mapletree Established with the objective of investing 2006 Pan Asia Industrial US$299 Industrial Fund in industrial assets in Asia for yield and million (MIF) appreciation. (~S$415 million) Fully realised and achieved 1.5 times multiple and net IRR4 of 15.1%.

Mapletree Held the S$1.7 billion of industrial assets 2008 Singapore Industrial S$708 Industrial Trust - acquired from JTC in 2008. Fully realised million Private (MITP) and achieved 1.5x multiple and net IRR4 of 19.1%.

Mapletree Real Focused on originating and executing 2005 Pan Asia All S$90 million Estate Mezzanine real estate mezzanine loans in Asia. Fully Fund (MREM) realised in FY07/08 and achieved 1.2 times equity multiple and net IRR4 of 25.3%.

Public Listed – REITs Mapletree North REIT investing in a diversifi ed portfolio 2013 Greater Commercial S$4.7 billion Asia Commercial of income-producing commercial real China and Trust (MNACT) estate in Greater China and Japan. Japan

Mapletree REIT investing on a long-term basis in a 2011 Singapore Commercial S$5.8 billion Commercial Trust diversifi ed portfolio of offi ce and retail (MCT) assets in Singapore.

Mapletree REIT investing in a diversifi ed portfolio 2010 Singapore Industrial & Data S$3.6 billion Industrial Trust of income-producing assets used for and North Centres (MIT) industrial purposes in Singapore and America6 income-producing assets used primarily as data centres beyond Singapore.

Mapletree First Asia-focused logistics REIT in 2005 Asia Pacifi c Logistics S$4.6 billion Logistics Trust Singapore, with the principal strategy (MLT) of investing in a diversifi ed portfolio of income-producing logistics real estate and real estate related assets in Asia Pacifi c.

Note: All information provided as at 31 March 2020 unless otherwise stated.

1 MIC Fund was fully realised in April 2020. 4 After expenses, taxes and base management 6 Invest in income-producing real estate 2 Excluding director and senior fee but before carried interest. used primarily for industrial purposes in management’s stake in fund. 5 Total fund size for private funds; NAV Singapore and income-producing real attributable to unitholders for listed REITs estate used primarily as data centres 3 Total required equity for projects (including worldwide beyond Singapore. amount drawn from fund level loan for as at 31 March 2020. bridging purpose) as a percentage of total committed equity.