MAPLETREE Investments is opening an office in Abu Dhabi, betting on one of the few bright spots in the global commercial real estate market to revive its beleaguered portfolio.

 

The property manager owned by Singapore&rsquo s Temasek, has re-hired Khairul Abdullah to lead its foray into the Middle East and scout for opportunities in the region, according to people familiar with the matter who asked not to be identified discussing private matters.

 

Abdullah was previously a vice-president at the firm before leaving to join Abu Dhabi&rsquo s biggest listed developer Aldar Properties, according to his LinkedIn profile.

 

A spokesperson for Mapletree confirmed plans to set up an office in Abu Dhabi as part of the firm&rsquo s growth and expansion plans, but declined to provide further details.

 

The commercial real estate market has boomed in Abu Dhabi and neighbouring Dubai, in sharp contrast to cities such as New York, London and Hong Kong where office vacancies are at multi-year highs.

 

Abu Dhabi&rsquo s sovereign wealth funds that control over US$1.5 trillion have been a big draw for hedge funds and billionaires.

 

Perks such as a tax-free income, sunny weather and a time zone that allows workers to trade across Asian, European and US hours are also helping both emirates attract global financial firms.

 

Mapletree previously said that it has expanded its private capital management team with representatives in the Middle East, for &ldquo wider investor coverage and to enhance its existing global network of capital partnerships&rdquo , in its annual report which was published earlier in July.

 

The foray into the Middle East comes at a time when Mapletree&rsquo s bets in commercial real estate elsewhere have soured.

 

It posted its first loss in two decades, which it attributed largely to valuation declines on its office portfolios in the US, Europe and Australia.

 

More than 40 per cent of Mapletree&rsquo s S$77.5 billion assets under management (AUM) are in North America and China. It aims to increase AUM to S$100 billion to S$120 billion in five years, despite falling short of its targets in the preceding half-decade plan. BLOOMBERG

It aims to navigate the challenging landscape with a prudent investment approach

 

MAPLETREE Investments posted a net loss of S$577.2 million for the financial year ended Mar 31 amid industry headwinds, compared with a S$1.2 billion net profit last year.

 

This comes as a high-interest environment led to expansion in real estate capitalisation rates in most markets, which in turn resulted in revaluation losses for the year, said the global real estate giant on Tuesday (May 28).

 

A prolonged work-from-home trend has also undermined commercial properties&rsquo value in most Western markets. Mapletree noted a substantial decline in assets&rsquo valuation within the office portfolios in the US, Europe and Australia markets, especially.

 

Revenue for the year was almost flat at S$2.8 billion, compared with S$2.9 billion in the previous financial year.

 

Recurring earnings were down 8.2 per cent to S$715.6 million from S$779.7 million, while total assets under management (AUM) gained slightly to S$77.5 billion, from S$77.4 billion a year earlier.

 

The group highlighted that it maintained prudent hedging practices and improved its operating performance to optimise earnings, and mitigated revaluation pressures with contributions from its better performing assets in Asia, as well as logistics.

 

As at end-March, the group&rsquo s cash reserves and committed undrawn facilities stood at S$12.3 billion, and net debt-to-equity ratio was lowered to 59 per cent from 64 per cent the previous year, as it continued to focus on defensive asset classes and markets with an emphasis on strengthening the balance sheet.

 

&ldquo Logistics remained as the group&rsquo s largest asset class at 41 per cent of overall AUM,&rdquo said the group.

 

Efforts to scale up its global logistics portfolio included its first land acquisition in Chennai, India in February 2024, and its entry into the Japanese logistics real estate market in Kyushu in July 2023. The group also completed development of 17 logistics parks in China.

 

Data centres were also a core asset class, making up 8 per cent of its overall AUM in the financial year.

 

Mapletree Industrial Trust made its entry into Japan with its first acquisition of a newly built data centre in Osaka in September 2023, enlarging its presence in the resilient data centre sector and diversifying its portfolio geographically, the group said.

 

Mapletree noted that the financial year marked the end of its third five-year plan. Recycled proceeds rose to S$19.3 billion from S$17.8 billion, while fee income stood at S$2.3 billion due to its active capital management business and resilient student housing portfolio.

 

Looking ahead, Mapletree said it aims to navigate the challenging landscape with a prudent investment approach, focusing on core sectors &ndash logistics, student housing, data centres and offices &ndash in key markets with growth potential, while maintaining active capital management.

 

It noted that it had in April 2024 deepened its student housing footprint with the acquisition of an operating platform, as well as 31 assets across 19 cities in the UK and Germany, taking its AUM to S$79.1 billion.

 

The group expects demand for high-quality offices in prime locations to rise as more workers return to the workplace.

 

It will explore suitable opportunities to acquire prime office spaces in key gateway cities that are less affected by remote work while keeping its current portfolio competitive. 

 

It will also continue to focus on strengthening its balance sheet to be able to capitalise on opportunities in the markets where investment conditions and prospects have normalised, the group said.

 

Group chief executive officer Hiew Yoon Khong said: &ldquo Looking ahead, with a strong balance sheet, the group will continue to prioritise and strengthen our focus on core sectors by embarking on more development projects, launching more development funds, and continuing our operational expertise to deliver high-quality assets that will generate consistently attractive returns.&rdquo