Cautionary stance
Last year, the company entrenched its real estate position with the acquisition of three new investment assets. They comprise a 488,164 sq ft shopping mall in China, two Grade-A office tower blocks in Singapore, and a portfolio of office and retail properties in Australia.
“The acquisitions of two blocks of premium Grade-A office tower, namely 7 & 9 Tampines Grande in Singapore and our 25% stake in a prime commercial mall in Chengdu, China, enhances our presence in the respective key markets. The recent investment in the portfolio of quality assets in Australia diversifies our regional footprint and will further grow the income profile of Metro,” says Yip.
The pair of adjacent eight-storey office towers at 7 & 9 Tampines Grande has a combined net lettable area of 361,656 sq ft. The property was sold for $395 million to a 50:50 joint venture between privately-held property developer Evia Real Estate and Metro in April 2019. As of March 31, the property is 88.6% occupied with the first office tower fully leased to Japanese conglomerate Hitachi, while the second tower is multi-let to other tenants.
Metro also invested RMB200 million ($39.44 million) for a 50% stake in Xiamen CICC Qihang Equity Investment Partnership, an investment fund set up by China International Capital
Residential sales support group performance
In the FY2020 ended March, Metro registered revenue of $210.3 million. This was $38.3 million or 22.3% higher than a year ago. Metro attributes this to the sale of property rights of its residential development properties in Bekasi and Bintaro in Jakarta Indonesia.
Overall, the group’s property division registered revenue of $101.4 million in FY2020, an increase of $60 million compared to the $41.4 million it recorded for FY2019.
Over in Indonesia, Metro says that it continues to target the local mid-tier residential segment, tapping on the country’s growing middle class population. It has partnered with Trans Corp, the media, lifestyle, retail, and entertainment arm of Indonesian conglomerate CT Corp. The partners are developing two residential projects — Trans Park Juanda Bekasi and Trans Park Bintaro. Metro has a 90% stake in each residential project.
Trans Park Juanda Bekasi is a 5,622-unit mixed-use development comprising five 32-storey residential towers. Four towers comprising 4,151 units have already been launched for sale and more than 60% of the units launched have been sold and the retail podium is already open. Meanwhile, Trans Park Bintaro is another mixed-use development featuring 1,260 apartment units and 170 SoHo-style units. More than 1,072 residential units (75% of the total units) have been sold, and the adjacent mall is also operational.
“In Indonesia, we are focused on catering to the middle-class population, and we are not looking at high-end developments,” says Yip. “Our two projects there have been selling well, and
Looking ahead, Metro says it still plans to grow its presence in Singapore, China, Indonesia, the UK, and Australia, and will explore regional countries for diversification of its investment and development portfolios.
According to a Metro spokesman, the company’s focus in Singapore and China will be on commercial assets with retro-fitting upside potential. In Indonesia, the emphasis will be towards affordable, mid-tier residential projects, while its investments in Australia will be geared towards high-quality office assets and defensive retail developments.
“Overall, it is our strategy to deepen our presence in the region through selective investments in quality properties and strategic alliances with the view of increasing recurring income. Nonetheless, we have adopted a cautious approach towards any potential opportunities at the moment in view of the current economic situation as a result of Covid-19,” the spokesman says. E