Metro Holdings enters new markets as diversification strategy continues
By Timothy Tay
/ EdgeProp Singapore |
SINGAPORE (EDGEPROP) - Mainboard-listed Metro Holdings has recorded an 11.8% growth in net profit after tax to $37 million for the full year ended March 31, 2021. The group adds it has successfully diversified its business segments into new asset classes after shedding some of its retail operations in Singapore and Indonesia. (See: Metro Holdings acquires UK student accommodation in Bristol for $54.8 mil)
Following the closure of its Metro Centrepoint store in Singapore in October 2019 due to expiration of the lease, Metro also divested its 50% equity interest of MRM, which operated its 11 Metro stores in Indonesia. In Singapore, Metro’s retail properties are its stores in Paragon and Causeway Point.
The group has transformed into a property investment and development group “backed by established retail operations”, it says. Metro diversified into a new asset class in the UK with the acquisition of two purpose-built student accommodation (PBSA) properties, one each in the university towns of Warwick and Bristol.
The group says that it is sticking to PBSA properties near the top 30 ranked universities in the UK, and it is still looking to grow its portfolio of such assets in the country.
Metro's PBSA property in Bristol was acquired in Jan 2021 for $54.8 million. (Picture: Metro Holdings)
Metro has also branched into the logistics market and acquired a 26% stake in a portfolio of 14 logistics assets in Singapore in partnership with Boustead Projects. It is the first time Metro is entering this submarket. The properties include industrial, business park, high-spec industrial, and logistics properties. The portfolio enjoys a high committed average occupancy rate of 99% and an overall weighted lease expiry of about 7.5 years.
“Metro continues to diversify our portfolio across resilient asset classes geographically. This is in line with our strategy to further enhance the quality, diversity, and income profile of the group’s investment portfolio to generate stable and recurring income,” says Yip Hoong Mun, group chief executive.
The group posted revenue of $97.3 million in FY2021 compared to $210.3 million in FY2020, largely due to lower contributions from the sale of its residential development properties in Indonesia, as well as lower revenue from its retail assets due to the closure of its two stores in Singapore during the “circuit breaker” period from April to June 2020.
Its share of profit from joint ventures increased by $8.2 million from $55.9 million in FY2020 to $64.1 million in FY2021, mainly due to a higher share of joint ventures’ operating profits of $4.8 million. This is mainly from the sale of residential units at The Crest, rent from its two Singapore office towers at 7 & 9 Tampines Grande, as well as rent from two commercial buildings in Shanghai, Metro City and Metro Tower.
Profit sharing from joint venture assets, including Metro City Shanghai, contributed to Metro's higher share of joint venture operating profit in FY2021. (Picture: Metro Holdings)
With the recent sale of the units at the Crest, Metro announced that the 469-unit development on Prince Charles Crescent is fully sold. The 99-year leasehold development was completed in 2017 and was jointly developed by Wing Tai Holdings, Metro, and Maxdin, a unit of UE E&C. Metro attributed the progressive sales at The Crest to the deferred payment scheme it had been offering to buyers.
Meanwhile, flexible workspace operator JustCo has announced that it will manage a new 30,000 sq ft flexible workspace at 7 & 9 Tampines Grande from 3Q2021. This will be the first Grade-A office property outside the CBD operated by JustoCo in Singapore.
Check out the latest listings near The Crest, Tampines Grande
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