Temasek’s Mapletree plans to list S$4 billion REIT

September 13, 2009
Singapore Democrats

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Simeon Bennett
Bloomberg

Mapletree Investments Pte, the property unit of Singapore’s Temasek Holdings Pte, said it plans to list a real estate investment trust in the city-state that may hold as much as S$4 billion ($2.8 billion) in assets.

The proposed Mapletree Commercial Trust will hold properties including Singapore’s biggest shopping mall, VivoCity; the PSA Building, which houses the nation’s port authority; and St James PowerStation, a nightspot, Sonny Phua, a Mapletree spokesman, said today in a telephone interview.

Mapletree plans to list the trust when yields on REITs fall to 5 percent from 8 percent now, Phua said. The company was preparing to sell shares in the REIT 18 months ago and deferred the plans as property prices fell amid the global recession, he said. Mapletree plans to proceed if markets continue to improve, he said.

“It would be an indication of some restoration of confidence,” said David Cohen, an economist at Action Economics in Singapore. “Developments of the last six months have been supportive of some increased risk-appetite compared to six months ago, and real estate would be an area that would benefit.”

Separately, Mapletree plans to start a private Vietnam property fund and a private Asian industrial property fund in the next 12 months, with between $500 million and $1 billion in each, Phua said. It recently closed another private fund holding about $1.7 billion of commercial properties in China, he said, adding the trust wants to add properties in India to the fund “quite soon.”

Investment firm

“We are looking at retail, residential, offices and business parks in China and India,” Phua said. “Obviously these two economies have a lot of potential, and that’s why this fund is going into them.”

Mapletree wants to expand its portfolio of property assets to at least S$20 billion in the next three to five years, from about S$12 billion now, Phua said.

Temasek, Singapore’s state-owned investment firm, already has stakes in REITs through its CapitaLand unit, which has four listed property trusts.

Temasek, which is run by Ho Ching, the wife of Singapore’s Prime Minister Lee Hsien Loong, is also considering an initial share sale for PSA Corp., a unit of PSA International Pte, the world’s second-largest container port operator, Ho said Aug. 25.

Reduce holdings

It may also list Fullerton Financial Holdings Pte, which invests in financial institutions in emerging markets, or Fullerton Fund Management Co., Temasek’s fund-management firm, to reduce its holdings in financial institutions, Ho said.

Temasek was initially set up in 1974 to support the development of Singapore’s banks, airlines and ports. It now holds stakes in financial services, real estate, telecommunications, energy and transportation companies in at least four continents.

The firm is the biggest shareholder in five of Singapore’s 10 biggest publicly traded companies by market value, including Singapore Telecommunications Ltd., Southeast Asia’s biggest phone company, and DBS, the region’s largest bank by assets.

Temasek said last month it plans to work closely with companies in which it owns stakes as overseas holdings increase, in the first change to its charter in seven years. The review reflects the fund’s transformation from a passive holder of stakes in government-controlled companies to an investor with more than two-thirds of its assets outside the country.

On Sept. 8 it agreed to sell Chartered Semiconductor Manufacturing Ltd., the world’s third-biggest maker of customized semiconductors, to Abu Dhabi for S$2.5 billion. It also controls 83.8 percent of Stats Chippac Ltd., Southeast Asia’s largest provider of chip-testing and packaging services.

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