Singapore property group Mapletree Investments is looking to expand into the United States and Europe amid a less certain outlook for its core Asian markets in the near future.
“Over the last 12 months, we were concerned about the volatility that could arise across markets in Asia once the start of the QE tapering was made known,” Group Chief Executive Officer Hiew Yoon Khong said in a statement announcing the firm’s results for the financial year ended March.
“While our concerns have been allayed so far and the outlook for Asian markets remains stable, it is not expected to be robust,” he said.
QE refers to quantitative easing policies adopted by the US Federal Reserve and other Western central banks in the wake of the global financial crisis, which had resulted in near-zero interest rates and a rush of funds to Asia and other emerging markets.
The flow of funds has since reversed as the Fed has begun winding down its bond purchases to inject money into the financial system.
Mapletree, a unit of Singapore investor Temasek Holdings, and California-based Oakwood Worldwide last month announced a multi-billion-dollar agreement to acquire and develop serviced apartments around the world.
Under the deal, Mapletree will purchase a 49 per cent stake in Oakwood’s serviced apartment business in Asia for an undisclosed amount.
The two companies also agreed to acquire and develop some US$4 billion (S$5 billion) worth of corporate and serviced apartment assets within Asia, Europe and North America.
Mapletree owns or manages S$24.6 billion worth of properties across Asia, including VivoCity in Singapore and logistics centres and industrial properties held under various real estate investment trusts.
For the financial year ended March, Mapletree achieved a net profit of S$859.4 million which was a drop of 7.8 percent from the previous year.
The decline in profit was due to a drop in gains arising from the sale of properties.
Looking ahead, Mr Hiew said Mapletree’s strategy within Asia is to selectively focus on specific asset classes and micro-markets where it saw opportunities to invest in and acquire good quality, high returns assets.
He cited China, which was seeing rising demand for modern logistics properties.
“We will also begin expanding beyond Asia into regions such as Europe and the US, and into new real estate sectors, to further diversify earnings,” he added.
Source : Channel NewsAsia – 16 May 2014