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Singapore real estate developer expands U.S. portfolio with student housing, corporate lodgings and logistics assets

Article - November 12, 2018

With around $35.3 billion* of assets under management, Mapletree Investment looks to the U.S. to diversify and expand its worldwide portfolio. The company currently holds almost $3.8 billion worth of AUM in the U.S., the fourth largest market for the firm behind Singapore, China and Hong Kong
*Date of currency exchange March 31, 2018

 

Thousands of students attending American universities are studying for exams, writing essays, bonding with their roommates and living the college campus life in housing owned and operated by a Singapore real estate firm which is spreading its investments across the United States.

And it is not only in student accommodation where Mapletree Investments is active, with corporate housing, office buildings and logistics facilities also in its U.S. portfolio, while the company expands regionally and around the world.

According to Group CEO Hiew Yoon Khong, the firm made its first foray into the U.S. real estate market four years ago through a joint venture with global corporate housing provider Oakwood Worldwide, then acquired by the Group in 2017.

“We plan to further extend our acquisition and development of corporate housing and serviced apartment assets in those regions where Oakwood has a presence,” he explains.

At around the same time, Mapletree Investments snapped up almost 20 student accommodation properties numbering more than 13,000 beds and all located conveniently close to leading universities. More recently, the firm entered the logistics property market in the United States by acquiring assets across more than 20 states and is continuing to pursue further opportunities in that sector.

“Our U.S. business has helped us achieve more than 10 percent in return on investment,” the CEO says. “And with our non-Asian assets contributing 21 percent of the $35.3 billion total in assets under management, the United States is an important part of that.”

But the company is also forging deep ties with U.S. corporations closer to its home base.

“The other important aspect of our business is building tenant relationships with U.S. corporations active in Asia,” Hiew says.

“Google and Oracle are tenants of ours at Mapletree Business City here and Amazon is a tenant at the Mapletree Logistics Hub in Singapore and at our facility in Odawara, one of the largest warehouse facilities in Japan.”

Acquiring logistics properties in Asia is a wise move for real estate investors as the e-commerce boom led by Amazon and the Chinese giants Alibaba and JD.com spreads throughout the region, according to sector analysts.

Indeed, e-commerce across the ASEAN member states alone is expected to grow 32 percent to almost $90 billion by 2025 with all of Asia forecasted to be the sector’s global epicenter. And all those millions and millions of goods will need to be stored, sorted and dispatched from logistic mega-centers strategically located across the region. 

Manufacturing is also taking off and many foreign companies in China, which is becoming increasingly expensive, are looking to the relatively cheap ASEAN countries to build factories and logistic facilities, analysts say.

Mapletree is still very active in China, where it recently completed eight logistics assets totaling 666,000 square meters to meet the increasing demands of e-commerce and third-party logistics operators, although the CEO emphasized that the ASEAN countries are also an attractive market.

The company has completed many “build-to-suit” developments across Asia and is highly regarded for its flexibility and custom solutions for industrial end-users, going that extra mile to stay ahead of its rivals.

“Our skill set, especially the technical skill sets related to real estate are not really unique to us as our competitors also possess these skills,” Hiew explains. “But we are different because we combine our skills into a package that third party end-users can believe in and commit to.

“We regard our tenants as our ultimate customers so it is our responsibility to understand and deliver what their objectives are. This is a core part of our DNA and what we have been doing for many years in Singapore, across Asia and now the key cities where we operate.”

 

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