Mapletree Investments, a wholly owned subsidiary of Temasek Holdings has become the latest Singaporean property group to lay plans for a REIT, although a deal is not expected until towards the end of the year at the earliest. Credit Suisse First Boston, DBS and UBS Warburg have been mandated for the transaction, which is consider an interesting, but complex one to bring to market.
Local property experts say this is because the underlying portfolio is a mixed bag, which includes some cargo warehouses as well as commercial and industrial assets. By contrast, the two REITs, which are already listed in Singapore, have very defined portfolios and no dead assets.
A-REIT, for example, comprises commercial assets and CapitalMall Trust (CMT) retail assets. However, local experts say that Temasek is keen on the idea of a REIT because it has seen what a success the new asset class has been for the Singapore Stock Exchange. CMT has consistently outperformed the index since it was listed in late July raising S$235 million ($133 million). Year to date it is up 3.96%, although A-REIT remains down 5.20%. The STI index, on the other hand, is down 1.184%.
Initially, it was thought that Temasek would sell off the portfolio after it was transferred from PSA Corp in December 2000. Ahead of a hoped for IPO, the government-owned port operator hived off $3 billion ($1.7 billion) worth of low yielding property assets, which were depressing its ROE. Its group president, Khoo Teng Chye, later joined Mapletree as president and CEO.
The company's principal assets are all clustered around Singapore's port area. The main one is Maritime Square, which has been re-named The HarbourFront - a 24 hectare development, encompassing the re-furbished former World Trade Centre and plans for a one million square foot shopping mall.
The group also owns Alexandra Distripark and Pasir Panjang Districentre, which both adjoin Pasir Panjang Terminal. Overseas, it has a 16 acre project in San Francisco and 163 hectare marina city project in Dalian, where PSA owned port assets.
The group was also recently appointed as the government's consultant for a project to develop a new downturn area next to the existing central business district. The Marina Bay development should yield about four million square feet of gross floor area.
