Chairman's Message
Dear Shareholders,
On behalf of the Board of Metro Holdings Limited (“Metro” or the “Group”), it is my pleasure to present our Annual Report for the financial year ended 31 March 2025 (“FY2025”).
During the year, Metro’s property division continued to be negatively impacted by China’s ongoing prolonged property sector headwinds, while Singapore’s challenging retail environment continued to weigh on our retail division’s performance. Nonetheless, we continued to diligently strengthen the resilience of our diversified portfolio while navigating a complex and challenging macro-environment across the key markets that we operate in. We are pleased to propose an ordinary final dividend of 2.0 Singapore cents per share which is a clear demonstration of our enduring gratitude to our loyal shareholders for your unwavering support over the years.
In FY2025, Metro continued to deepen our presence in key markets for resilience, with our acquisition of the 1 Castlereagh Street office property in Australia through our joint venture with the Sim Lian Group of Companies (“Sim Lian”), and our equity step-up from 25% to 50% in Fairbriar Real Estate Limited (“Fairbriar”) which owns and develops the Middlewood Locks mixed-use development in the UK. Our balance sheet remains healthy, with net assets of S$1.2 billion and total assets of S$2.1 billion as of the end of FY2025. We remain unwavering in our commitment to delivering value, even in the face of adversity.
FINANCIAL REVIEW
The Group reported a loss after tax of S$224.7 million for FY2025, compared to a profit after tax of S$14.6 million in FY2024. This is mainly attributable to non-cash fair value and impairment losses arising from our China real estate exposure. The Group’s property division continued to be negatively impacted by China’s ongoing prolonged property sector headwinds, which resulted in: (1) share of
loss of S$105.4 million from its 20.5%-owned associate Top Spring International Holdings Limited (“Top Spring”) arising from fair value losses (net of tax) on investment properties and operating loss (including impairment losses on its properties held for sale); (2) fair value loss (net of tax) of S$91.1 million mainly from China properties held under associates and joint ventures; and (3) impairment of amounts due from associates of S$32.9 million relating to co-investments with BentallGreenOak (“BGO”). In addition, the Group recognised fair value losses of S$23.2 million mainly from its investment in the Mapletree Global Student Accommodation Private Trust. These were partially mitigated by: (1) share of net operating profit of S$14.9 million and fair value gains (net of tax) of S$11.5 million from UK, Australia and Singapore properties held under associates and joint ventures; and (2) a negative goodwill of S$7.2 million (being the excess fair value over purchase consideration) recognised on Metro’s acquisition of the additional 25% stake in Fairbriar in November 2024.
Metro’s retail division reported a loss after tax of S$6.9 million for FY2025 compared to a profit after tax of S$1.8 million in FY2024, mainly due to lower revenue, lower gross margins and impairment losses amid the challenges confronting Singapore’s retail sector.
The Group’s revenue decreased from S$115.9 million in FY2024 to S$104.5 million in FY2025, with lower revenue from the retail division by S$8.9 million mainly due to lower sales from Metro Paragon and Metro Causeway Point, and lower contribution from the sale of property rights of the residential development properties in Bekasi and Bintaro, Jakarta by S$2.0 million.
PROPERTY INVESTMENT AND DEVELOPMENT
Overcoming Adversity, Strengthening Resilience
In FY2025, Metro continued to strengthen our resilience through maintaining a diversified portfolio of high-quality assets in resilient sectors and markets. Our key investment properties of Metro City, Metro Tower and GIE Tower in China as well as our properties in Singapore, the UK and Australia have continued to stay resilient.
Singapore
Metro achieved substantial backfilling of the vacated space at our 50%-owned Grade-A office property Asia Green at the Tampines Regional Centre, following Hitachi Asia’s lease expiry on 31 March 2024 which had accounted for approximately 30% of the property’s net lettable area (“NLA”). As at 31 March 2025, Asia Green had a committed occupancy of approximately 95.0%, and new key tenants secured include private school DIMENSIONS, SGX Mainboard-listed Food Empire Holdings, and the Eastern General Hospital Planning Office under SingHealth.
Higher contribution of S$11.8 million was also recorded from Metro’s 20%-owned VisionCrest Orchard, a freehold Grade-A office property in the prime Orchard Road precinct which was legally acquired in January 2024. Strata sales of the property’s office and retail units commenced in July 2024, and a total of four retail units and two office floors amounting to approximately 20% of the total strata area have been sold as at 31 March 2025.
Metro’s 26%-owned Boustead Industrial Fund (“BIF”), with a total asset size of S$763.2 million, achieved a high committed average occupancy of 95.7%1 (92.8%)2 and a weighted average lease expiry (“WALE”) by income of approximately 5.0 years1. BIF owns 15 high-quality properties in Singapore across industrial, business park, high-spec industrial, and logistics sectors.
China
China’s protracted property market downturn has weighed on leasing demand for Metro City and Metro Tower in Shanghai, and GIE Tower in Guangzhou, all of which reported an average occupancy of 74.3%1 (79.4%2). The Atrium Mall in Chengdu and Shanghai Plaza in Shanghai have achieved occupancy of 88.0%1 (91.2%2) and 84.9%1 (88.2%2) respectively. Leasing also continues to be challenging for the three office buildings in Bay Valley which are 68.6%1 (70.6%2) occupied. Ongoing challenges in China’s office leasing market, particularly in Shanghai where the citywide vacancy rate was 22.7% in Q4 2024 and could reach a new high by the end of 20253, will continue to affect the occupancy rates of our China investment properties. The Group’s associate, Top Spring, our co-investments with BGO and our other investment properties held under associates and joint ventures will continue to be subject to the persistent market headwinds in China and Hong Kong.
Indonesia
In Jakarta, all five 32-storey residential towers in Bekasi and both Bintaro towers have topped off. Fully paid units are progressively being handed over, and sales efforts are ongoing. Still-high borrowing rates, weak economic sentiments and the dwindling middle class4> will continue to pose headwinds for these projects.
United Kingdom
In November 2024, Metro increased our equity stake in Fairbriar from 25% to 50%. Fairbriar owns and develops the Middlewood Locks mixed-use development which is an award-winning regeneration project that has created a thriving and vibrant new neighbourhood at the Western gateway to Manchester City Centre. Handover of units under ‘Railings’, i.e. Phase 3 of the development, has commenced after practical completion in November 2024, with approximately half of the 189 residential units sold or reserved as at 3 April 2025. With a gross development value of approximately £1 billion, Middlewood Locks will provide 2,215 new homes, and an additional 1,000 new homes or one million square feet of commercial space (including offices, hotel, shops and restaurants).
In the UK purpose-built student accommodation (“PBSA”) sector, our 30%-owned portfolio of six freehold quality PBSA properties comprising 902 beds across Warwick, Bristol, Durham, Exeter, Glasgow and Kingston under the Paideia Capital UK Trust was valued at £149.0 million1 (£132.4 million2) and achieved a high occupancy rate of 99.3%1 (95.2%2).
In London, asset enhancement work for new extension and refurbishment progressed on our 50%-owned freehold office property at 5 Chancery Lane, with completion expected by the end of 2026. This is expected to better position the asset to leverage on the leasing demand for green buildings.
Australia
In October 2024, Metro together with Sim Lian acquired 1 Castlereagh Street which is a freehold prime office property in the financial core of Sydney’s CBD for a purchase consideration of A$196.4 million (approximately S$172.3 million). This strategically deepened Metro’s footprint in Australia’s office market and increased the total appraised value of Metro’s portfolio with Sim Lian to A$1.4 billion1 (approximately S$1.2 billion). The portfolio now consists of 18 quality freehold properties with an occupancy of
92.9%1 (94.1%2) and a WALE of approximately 5.0 years1 by income (5.5 years2), comprising 5 office buildings and 13 retail centres across New South Wales, Victoria, Queensland and Western Australia.
RETAIL
Amid the challenges confronting Singapore’s retail sector, Metro’s retail division registered a revenue decrease from S$105.4 million in FY2024 to S$96.5 million in FY2025, which was primarily due to lower sales at Metro Paragon and Metro Causeway Point. Gross profit decreased from S$7.5 million in FY2024 to S$2.6 million in FY2025, mainly due to the lower revenue and lower gross margins arising from the highly competitive trading environment. In view of the continuing challenges faced by the retail segment, an impairment loss of
S$4.1 million was recorded on its right-of-use assets5 and fixed assets. Correspondingly, segment results excluding finance costs was a loss of S$5.5 million in FY2025 as compared to a profit of S$3.4 million in FY2024.
OUTLOOK
The escalation of US-China trade tensions and the imposition of tariffs have created strong headwinds for the global economy. A series of new tariff measures by the US and countermeasures by its trading partners have been announced and implemented, ending up in near-universal US tariffs on 2 April 2025 and bringing effective tariff rates to levels not seen in a century6. The swift escalation of trade tensions and extremely high levels of policy uncertainty are expected to have a significant impact on global economic activity6. In its “reference forecast” based on information available as at 4 April 2025, the International Monetary Fund (“IMF”) lowered its global growth projection for 2025 and 2026 to 2.8% and 3.0% respectively, down from its previous forecasts of 3.3% for both years6.
Global headline inflation is expected to decline at a pace that is slightly slower than what was earlier expected in January 2025, reaching 4.3% in 2025 and 3.6% in 2026, with notable upward revisions for advanced economies and slight downward revisions for emerging market and developing economies in 20256. After three consecutive cuts to the federal funds rate in 20247, officials at the US Federal Reserve voted unanimously to keep the benchmark federal funds rate in a range of 4.25% to 4.50% at their policy meeting on 2-3 May 2025, stating that uncertainty about the economic outlook has increased further and the risks of higher unemployment and higher inflation have risen8. The Group operates in 5 countries namely Singapore, China, Indonesia, the UK and Australia which are subject to the heightened economic volatility and currencies’ fluctuations against the Singapore dollar.
While China’s GDP growth of 5.4% for Q1 2025 outstripped expectations9, several major banks have downgraded their own forecast on China’s GDP growth for the 2025 full year to 4.0% or lower, which are well below the official goal of around 5.0%10. China’s property sector which is in its fourth year of decline has continued to weigh on broader consumption and employment11. By floor area, China’s property sales for 2024 shrunk to a level last seen in 2009-201012. While mortgage rates for first-time homebuyers have been lowered and downpayment requirements have been cut12, China home prices continued their prolonged slump in April 202513. China also reported a net foreign direct investment outflow of US$168 billion in 2024, which is the biggest capital flight in data going back to 199014.
Prime office values have tumbled about 30% from their pre-Covid high in some of China’s major cities including Shanghai, which has seen institutional real estate investors divest their office properties at significant discounts or losses and to the extent of defaulting on their loans15,16,17. China’s economic slowdown and swelling supply of office space have triggered more landlords to cut rents or resort to subsidies to retain tenants18. Grade A office rents for Shanghai fell 12.9% over 202419, while the citywide office rental index for Guangzhou declined 4.9% over the same period20. Shanghai’s office market saw a net take-up of 696,400 sqm in 2024, which is only about half of the total new supply of 1.38 million sqm for the year, while the citywide office vacancy rate reached 22.7% in Q4 2024 which is the highest in the past five years3.
In Singapore, the Ministry of Trade and Industry downgraded the country’s growth forecast for 2025 to “0% to 2%” (previously 1% to 3%) in April 2025 and flagged downside risks in the global economy21. Firstly, the spike in uncertainty may lead to a larger-than-expected pullback in economic activity as businesses and households adopt a “wait-and-see” approach before making spending decisions21. Secondly, further tariff measures including retaliatory tariffs could lead to a full-blown global trade war, which will upend global supply chains, raise costs and lead to a far sharper global economic slowdown21. Thirdly, disruptions to the global disinflation process and rising recession risks in both advanced and emerging markets could lead to destabilising capital flows that could trigger latent vulnerabilities in banking and financial systems21. Notwithstanding steps taken by major economies to de-escalate global trade tensions following the announcement of sweeping tariffs by the US, the global economic outlook remains clouded by significant uncertainty, with the risks tilted to the downside22.
In Singapore’s industrial property segment, leasing activity remained robust in Q1 2025, although most leasing deals focused on renewals due to cautious sentiment among occupiers, and expansionary demand eased from Q4 202425.
Singapore’s retail trade sector reversed from a 1.3% growth in 2023 to a 0.4% contraction in 2024, weighed down by more cautious spending amid high cost and global uncertainties26,27. Department stores’ sales volume contracted 3.2% in 202426 as compared to the flat growth recorded in 202328. Retail sales in Singapore are likely to remain subdued in 2025, with consumer demand diverted overseas with the strong SGD, and household sentiment could weaken amid the dimming economic outlook and broadening global trade war29.
Indonesia reported a GDP growth of 4.87% for the first quarter of 2025, which was the weakest growth rate in more than three years30. Indonesia’s central bank reduced its benchmark rate by 25 basis points to 5.5% at its policy meeting on 20-21 May 2025, the lowest level since 202231. The central bank has lowered its estimate for Indonesia’s GDP growth for this year to a range of 4.6% to 5.4%, and said the economy needs to further strengthen and interest rates need to come down to support growth31. Indonesia’s middle class, traditionally the backbone of the country’s economy, has fallen from a peak of around 23% of the population to 17% in 2024 and there are growing signs that the diminishing middle class is already affecting the economy32.
The UK saw better-than-expected GDP growth of 0.5% for February 2025, the strongest growth in almost a year, partially driven by a shock 2.2% surge in manufacturing which economists say is likely to reflect manufacturers building inventory in anticipation of US tariffs33. The UK’s Office for Budget Responsibility has however halved its growth forecast for 2025 to 1%, highlighting a more challenging economic and fiscal outlook34. The Bank of England’s Monetary Policy Committee has at its May 2025 meeting cut the central bank’s benchmark interest rate by 25 basis points to 4.25%, maintaining that a gradual and careful approach to the further withdrawal of monetary policy restraint was appropriate35.
Annual investment into the UK’s PBSA sector reached £3.87 billion in 2024, an increase of 14% from the £3.39 billion in 202336. Supply of PBSA and build-to-rent (“BTR”) is expected to remain tight while demand indicators remain strong37.
Manchester is the UK’s second economic powerhouse and continues to see strong demand for BTR and new homes38,39. Manchester is now one of the wealthiest areas in the UK, with the largest BTR market outside of London38, and has also recorded the second-highest home price growth out of 20 cities40.
It has been noted that green-certified office buildings provide a competitive advantage and can experience increased occupier demand from firms adhering to corporate sustainability targets, potentially leading to higher rental growth in markets with limited availability41. In 2025, ESG-compliant office is expected to continue to achieve a rental premium, as office occupiers seek to lease better quality stock to both reduce Scope 3 emissions and differentiate themselves against competitors in a bid to attract and retain talent42.
Australia posted a quarterly GDP growth of 0.6% for Q4 2024, marking the strongest quarterly growth rate since December 202243. However, the IMF has lowered its 2025 GDP growth forecast for Australia to 1.6%, down from its previous projection of 2.1%, reflecting the impact of global economic challenges including the new US tariffs44. After reducing the cash rate in February 2025 by 25 basis points45, the Reserve Bank of Australia lowered the cash rate by another 25 basis points to 3.85% at its 20 May 2025 policy meeting, stating that it remains cautious about the outlook, particularly given the heightened level of uncertainty about both aggregate demand and supply46.
The Group’s portfolio of long-term and short-term investments, held at fair value through profit or loss and other comprehensive income, will continue to be subject to volatile fluctuations in their fair value. The Group is exposed to the effects of foreign currency exchange rate fluctuations, primarily in relation to Chinese Renminbi, Hong Kong dollar, US dollar, Sterling pound, Indonesian rupiah and Australian dollar. Whenever possible, the Group seeks to maintain a natural hedge through the matching of liabilities, including borrowings, against assets in the same currency.
In Conclusion
Metro continues to operate under challenging conditions, in a macro-environment marked by trade tensions, the imposition of tariffs and extremely high levels of policy uncertainty, with strong headwinds across our key markets. Majority of the Group’s property exposure is in China, which continues to be affected by a protracted property market downturn and slowing economic growth that are in turn weighing on business and consumer confidence, investment plans and employment.
Amid these uncertainties, Metro will exercise caution and prudence while taking proactive measures to maintain strong capital management discipline, including preserving cash, optimising cash flows and liquidity. We intend to actively manage our existing investment portfolio to optimise returns and capitalise on new strategic opportunities to enhance shareholder value. With regards to our asset management strategy, we will prioritise critical asset enhancement, while deferring uncommitted capital expenditure, implementing cost saving measures and deploying derivative instruments to hedge the underlying interest rate exposures where possible. With challenging market conditions expected to persist in Singapore’s retail sector, we would continue to optimise our retail division’s operations to drive efficiency. The Group will also continue to maintain a strong liquidity position comprising cash and banking facilities.
As we navigate the increasingly complex and uncertain macro-economic landscapes, Metro is committed to overcoming adversity, strengthening our resilience and navigating the challenges through maintaining a diversified portfolio of high-quality assets in resilient sectors and markets. The Board and Management will continue to exercise careful oversight and strategic planning to safeguard and to increase shareholder value for sustainable growth.
PROPOSED DIVIDEND
To reward our loyal shareholders, the Board has recommended a final dividend of 2.0 Singapore cents per ordinary share, taking into consideration foreseeable capital requirements and reinvestment needs of the Group given the uncertain and challenging macro-environment. The proposed dividend for FY2025 underscores our appreciation for the unwavering support of our shareholders through the years.
ACKNOWLEDGEMENTS
The Board and Management of Metro Group would like to express our gratitude and appreciation to Mr Ng Ee Peng, Metro’s Non-Executive and Independent Director, for his commitment and contribution to the Group over the past years. Mr Ng, who has been a member of our Board and of the Audit and Remuneration Committees since July 2021, will not be seeking re-election and will accordingly retire as a Board member upon the conclusion of our forthcoming AGM in July 2025.
On behalf of the Board of Directors, I would also like to express our heartfelt appreciation to all our loyal shareholders, dedicated staff, valued customers, business partners, associates and stakeholders for their steadfast support of Metro.
I wish all of you continued success in your endeavours.
TAN SOO KHOON
Chairman
27 June 2025