What factors fuel a company’s dramatic growth? Is it its business model? Or is it the growth and market development strategy? What are the key factors a firm needs to understand and analyse to determine an appropriate growth strategy? A Singapore based real estate and capital management company, Mapletree Investments Pte Ltd (Mapletree), decided to adopt a hybrid approach to growth by moving from an asset heavy to an asset light business model and expanding into new markets to achieve its ambitious expansion targets in two five-year plans between 2009 and 2019.

In 2003, when Mapletree was first established by spinning off the non-core assets of the Port of Singapore Authority, the company had about 250-300 employees and was Singapore-centric—but by 2008, its staff strength had grown to about 600 and it had expanded to many countries across Asia, including China. By 2019, Mapletree had expanded outside Asia, and the Group’s total assets under management (AUM) had grown from S$2.3 (US$1.8) billion in 2003 to S$55.7 (US$41.3) billion by FY18/19.

Mapletree’s Group Chief Executive Officer Hiew Yoon Khong viewed the company as a start-up with many possibilities to grow beyond being a real estate developer. In 2009, he embarked on two five- year plans to help grow and diversify the firm, both geographically as well as in new business areas. As part of its first five-year plan, the company invested in a spectrum of assets in Asian real estate markets with growth potential by  leveraging on its core competencies in real estate development and applying astute investment and capital management strategies to drive value for investors. Consequently, it doubled its AUM and grew the number of REITs it sponsored from one in 2009 to four in 2014. By the end of the first five-year plan, the company had expanded its operations to eight countries in Asia (China, Hong Kong SAR, Japan, South Korea, Vietnam, Singapore, Malaysia and India).

In April 2014, the company decided to venture outside Asia into Australia, U.S., U.K. and Germany, known as the ‘New Markets’. Driven by an asset light model, Mapletree strategically entered into ‘New Markets’, which were already established markets, in new business areas like student accommodation and corporate housing. The strategy paid off, and in March 2019, the company recorded S$16.1 (US$11.9) billion of AUM in these markets, posting a 25% contribution to its EBIT.

At the start of the new financial year in April 2019, Hiew considered the lessons in leadership and business that he had accumulated in his 16 years at Mapletree. He commented, “First, have a clearly articulated business model. Be extremely clear about the purpose of your business model. It’s not about having a generic vision and mission statement. Be clear on the scorecards and what you measure. Secondly, we need to work together as one team. It’s hard to align silos towards a common goal. Silos also limit the opportunity for younger talent to be exposed to different aspects of the business. Thirdly, we must maintain a nimble and bold culture to survive. In order to stay nimble while growing, I consistently try to nurture and encourage trying new things. We should never be afraid to try something that none of us has tried before. We’ll make mistakes. What’s important is that we’re capable of learning from it—good or bad. I hope to embed this into the corporate culture and I hope that it will last for a long period of time. Or else we will lose our creativity.”

This case is written by Gerard George, Dean, Lee Kong Chian School of Business at SMU; Adina Wong and Lipika Bhattacharya of the Centre for Management Practice (CMP) at SMU. The case examines the importance of strategic decision-making when an organisation is evaluating growth opportunities and the considerations involved in choosing the path of internationalisation.

To read the case in full, please visit the CMP website by clicking here.