ARA ASSET MANAGEMENT LIMITED (“ARA”)
ARA Asset Management Limited, a 20.1%-owned associate of
Straits Trading, is one of the largest real estate fund managers in
the region. ARA manages listed REITs in Singapore, Hong Kong
and Malaysia and also invests in and manages private real estate
funds in the Asia Pacific region. Its real estate portfolio spans
the office, retail, logistics, hospitality and residential sectors.
ARA also offers real estate management advisory services,
which complement its fund management business.
In 2015, ARA’s total assets under management (“AUM”) grew 11.9%
from S$26.7 billion to S$29.8 billion (as at December 2015). As
a result, the recurrent management fees to ARA increased from
S$125.5 million to S$129.6 million for FY2015 and its adjusted net
profit
1
grew 16% year-on-year to S$72.1 million.
In September 2015, ARA successfully raised US$325 million in
capital commitments for Peninsula Investment Partners, a new
private fund platform with the mandate to invest in real estate
assets across Asia, including Australia, Singapore, Hong Kong,
China and Japan. In the same month, the California Public
Employees’ Retirement System (“CalPERS”) added US$300
million to ARA’s China platform, China Investment Partners.
In October 2015, ARA successfully launched a new privately-
held REIT, ARA ShinYoung Residential Development Real Estate
Investment Company, which has the mandate to invest in
residential assets in South Korea.
In December 2015, ARA established the ARA Harmony Fund V
(“Harmony V”), a private real estate fund for the redevelopment
of Park Mall, a commercial and retail property located within
Singapore’s prime shopping belt, Orchard Road. The investors
of Harmony V include the SingHaiyi Group of companies, Haiyi
Holdings Pte Ltd and Suntec Real Estate Investment Trust.
As the largest shareholder of ARA with a 20.1% stake, Straits
Trading will continue to support ARA in delivering its strategies
to grow its REIT platforms through yield-accretive acquisitions
while seeking opportunities in private funds to venture into
new markets and jurisdictions. In December 2015, ARA raised a
total of S$152.1 million via a rights issue, which Straits Trading
subscribed to its full entitlement. The capital raised will provide
ARA with greater financial capacity and flexibility to meet its
funding needs to support its growth as well as to capitalise on
growth opportunities as and when they arise.
SUNTEC REAL ESTATE INVESTMENT TRUST
(“SUNTEC REIT”)
As at Jan 2016, Straits Trading had an aggregate shareholding
(including its deemed interest in shares of Suntec REIT held by
ARA) of 8.21% in Suntec REIT.
For FY2015, Suntec REIT reported gross revenue of S$329.5
million and net property income of S$229.2 million that were
16.7% and 19.6% higher year-on-year respectively due to
the opening of Phases 2 & 3 of Suntec City mall and higher
contribution from Suntec Singapore.
In November 2015, Suntec REIT acquired three floors of strata
office space in Suntec City of approximately 38,000 sq. ft. It
also completed the divestment of Park Mall in December 2015
and entered into a joint venture to redevelop the property to
further unlock underlying value.
STRAITS INVESTMENT PARTNERS (“SIP”)
Straits Investment Partners is a managed account under ARA that
oversees Straits Trading’s investment property portfolio. In April
2015, Atbara Holdings Private Limited (“Atbara”) was divested
to Haiyi Holdings, for S$53.8 million. Atbara owned 14 units in
The Holland Collection, a freehold residential development on
Holland Road.
The remaining investment properties in Singapore include
condominium units at Gallop Green and Good Class Bungalows
(“GCBs”) at Cable Road and Nathan Road. In Malaysia, the
portfolio comprises Wisma Straits Trading Building, and includes
land, buildings and shophouses in Butterworth, Penang.
SIP will continue to look to maximise the yield on its remaining
real estate portfolio while concurrently looking for attractive
opportunities for asset divestment.
Suntec City, Singapore
1
Adjusted for (i) gain / (loss) on fair valuation / disposal of financial assets; (ii) acquisition, divestment and performance fees; (iii) bargain purchase arising from acquisition;
(iv) impairment on available for sale financial assets; (v) gain / (loss) on disposal of investments and (vi) performance-based bonuses
YEAR IN REVIEW
REAL ESTATE
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THE STRAITS TRADING COMPANY LIMITED
