IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Daiwa House Logistics Trust / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020:1" rel="noopener">Daiwa House Logistics Trust (DHLT SP)</a> has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. </li>
<li>DHLT offers an attractive value proposition consisting of a blue-chip tenant base, a staggered lease expiry profile, manageable tenant concentration risk, a growth pipeline and low capex.</li>
<li>DHLT offers exposure to the only Japan pure-play REIT listed in Singapore.</li>
</ul>



Daiwa House Logistics Trust (DHLT SP) has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. 
DHLT offers an attractive value proposition consisting of a blue-chip tenant base, a staggered lease expiry profile, manageable tenant concentration risk, a growth pipeline and low capex.
DHLT offers exposure to the only Japan pure-play REIT listed in Singapore.


Daiwa House Logistics Trust IPO: The Flow of Things

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020:1" rel="noopener">Daiwa House Logistics Trust (DHLT SP)</a>, a Japan pure-play logistics REIT, is looking to raise US$343m in its Singapore IPO.</li>
<li>As of Jun 2021, its assets had an aggregate net lettable area (NLA) of 423,920 sqm and had an appraised valuation of approximately JPY80,570m (S$952.9m).</li>
<li>As of Oct 2021, portfolio occupancy stood at 96.3% and its assets had a weighted average lease expiry (WALE) of 7.2 years.</li>
</ul>



Daiwa House Logistics Trust (DHLT SP), a Japan pure-play logistics REIT, is looking to raise US$343m in its Singapore IPO.
As of Jun 2021, its assets had an aggregate net lettable area (NLA) of 423,920 sqm and had an appraised valuation of approximately JPY80,570m (S$952.9m).
As of Oct 2021, portfolio occupancy stood at 96.3% and its assets had a weighted average lease expiry (WALE) of 7.2 years.


Daiwa House Logistics Trust Pre-IPO - Muted Forecasts and Gearing Could Affect Growth Potential

Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li>Frasers Logistics &amp; Commercial Trust (FLT SP) 2H21 DPU +6.3% YoY; Weak reversions though occupancy remains steady</li><li>IREIT Global (IREIT SP) 3Q21 Business Updates – Leasing improvements reduce risk, dual currency trading and EUR distribution +ve</li><li>United Hampshire US REIT (UHU SP) 3Q21 Business Updates – Lower rental rates despite occupancy holding up</li></ul>

Frasers Logistics &amp; Commercial Trust (FLT SP) 2H21 DPU +6.3% YoY; Weak reversions though occupancy remains steadyIREIT Global (IREIT SP) 3Q21 Business Updates – Leasing improvements reduce risk, dual currency trading and EUR distribution +veUnited Hampshire US REIT (UHU SP) 3Q21 Business Updates – Lower rental rates despite occupancy holding up

ASEAN Builder's Scoop (11Nov21) - FLT Weak Reversions

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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 <img src='https://api2.sgx.com/sites/default/files/2021-11/Capture_3.PNG' alt='Greener REIT' />
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 <div class='content-caption'>Greener REIT</div>
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According to the UN Environmental Programme, the real estate sector has one of the largest carbon footprints, contributing to 30 per cent of global annual greenhouse gas (GHG) emissions and consumes around 40 per cent of the world's energy.

This explains the increasing focus on climate change issues and responsible investment practices.

SGX and UOB Asset Management have jointly launched the iEdge-UOB Apac Yield Focus Green Reit Index, an index which tracks the performance of 50 higher-yielding Reits in Asia-Pacific (Apac) with positive environmental attributes based on the GRESB assessment framework. 
GRESB is the global leader for ESG research of real assets, covering more than 1,500 property companies, Reits, funds and developers with US$5.7 trillion in assets under management. 
Out of the 50 constituents, nine are S-REITs &amp; Property Trusts: CapitaLand Integrated Commercial Trust, Mapletree Logistics Trust, Mapletree Industrial Trust, Mapletree Commercial Trust, Frasers Logistics &amp; Commercial Trust, Suntec REIT, Keppel REIT, Mapletree North Asia Commercial Trust, and Ascendas India Trust. 
The iEdge-UOB Apac Yield Focus Green Reit Index is the first index globally to go beyond using the overall GRESB score and focus on four key environmental indicators to determine the environmental attributes - energy consumption, water consumption, GHG emissions, and green building certifications. 
The index is expected to be fully investable and tradable, as Apac Reits are included into the index based on minimum size of US$1 billion in free-float market capitalisation, liquidity requirements of at least US$400,000 in median daily average traded value, dividend yield-ranking within market cap quartiles, and a minimum GRESB public disclosure score among others.

After which a green tilt is applied using the GRESB Real Estate Assessment environmental scores.

Reits that have more favourable environmental attributes will be rewarded with a higher weighting factor, compared to Reits that have relative lower environmental scores.

By applying the green portfolio tilt, the iEdge-UOB Apac Yield Focus Green Reit Index constituents emit 7 per cent less GHG, consume 12 per cent less water and 9 per cent less energy than the non-green market-cap weighted version of the index.

Green building certification by floor area is also 13 per cent for certifications obtained at the time of design, construction or renovation, and 10 per cent for operational green building certifications.

All constituent weights are capped at 7 per cent and overall country exposure capped at 40 per cent.

Japan makes up 40 per cent of the index, while Australia, Singapore and Hong Kong are at 36 per cent, 16 per cent and 8 per cent respectively.

The index has a trailing 12-month dividend yield of 4.25 per cent.

The UOB Apac Green Reit ETF, which has filed a prospectus with an expected listing on Nov 23, will track the iEdge-UOB Apac Yield Focus Green Reit Index.

The ETF has a target dividend distribution policy of up to 4 per cent of net asset value per annum on a quarterly basis.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/retail-and-hospitality-sector-s-reits-outperform-in-october"> </a><a href="https://www.businesstimes.com.sg/companies-markets/nine-s-reits-in-yield-focus-index-based-on-positive-environmental-attributes">read</a><a href="https://www.businesstimes.com.sg/companies-markets/retail-and-hospitality-sector-s-reits-outperform-in-october"> </a>the original version.
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    Greener REIT


According to the UN Environmental Programme, the real estate sector has one of the largest carbon footprints, contributing to 30 per cent of global annual greenhouse gas (GHG) emissions and consumes around 40 per cent of the world's energy.

This explains the increasing focus on climate change issues and responsible investment practices.

SGX and UOB Asset Management have jointly launched the iEdge-UOB Apac Yield Focus Green Reit Index, an index which tracks the performance of 50 higher-yielding Reits in Asia-Pacific (Apac) with positive environmental attributes based on the GRESB assessment framework.  
GRESB is the global leader for ESG research of real assets, covering more than 1,500 property companies, Reits, funds and developers with US$5.7 trillion in assets under management.  
Out of the 50 constituents, nine are S-REITs &amp; Property Trusts: CapitaLand Integrated Commercial Trust, Mapletree Logistics Trust, Mapletree Industrial Trust, Mapletree Commercial Trust, Frasers Logistics &amp; Commercial Trust, Suntec REIT, Keppel REIT, Mapletree North Asia Commercial Trust, and Ascendas India Trust.  
The iEdge-UOB Apac Yield Focus Green Reit Index is the first index globally to go beyond using the overall GRESB score and focus on four key environmental indicators to determine the environmental attributes - energy consumption, water consumption, GHG emissions, and green building certifications.  
The index is expected to be fully investable and tradable, as Apac Reits are included into the index based on minimum size of US$1 billion in free-float market capitalisation, liquidity requirements of at least US$400,000 in median daily average traded value, dividend yield-ranking within market cap quartiles, and a minimum GRESB public disclosure score among others.

After which a green tilt is applied using the GRESB Real Estate Assessment environmental scores.

Reits that have more favourable environmental attributes will be rewarded with a higher weighting factor, compared to Reits that have relative lower environmental scores.

By applying the green portfolio tilt, the iEdge-UOB Apac Yield Focus Green Reit Index constituents emit 7 per cent less GHG, consume 12 per cent less water and 9 per cent less energy than the non-green market-cap weighted version of the index.

Green building certification by floor area is also 13 per cent for certifications obtained at the time of design, construction or renovation, and 10 per cent for operational green building certifications.

All constituent weights are capped at 7 per cent and overall country exposure capped at 40 per cent.

Japan makes up 40 per cent of the index, while Australia, Singapore and Hong Kong are at 36 per cent, 16 per cent and 8 per cent respectively.

The index has a trailing 12-month dividend yield of 4.25 per cent.

The UOB Apac Green Reit ETF, which has filed a prospectus with an expected listing on Nov 23, will track the iEdge-UOB Apac Yield Focus Green Reit Index.

The ETF has a target dividend distribution policy of up to 4 per cent of net asset value per annum on a quarterly basis.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Nine S-Reits in Yield Focus index based on positive environmental attributes

Event-Driven

<a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934:1" rel="noopener">ESR-REIT (EREIT SP)</a> announced the proposed merger with <a href="https://www.smartkarma.com/entities/ara-logos-logistics-trust" target="_blank" data-smartkarma-citation="entities:937:1" rel="noopener">ARA LOGOS (ALLT SP)</a> by way of a trust scheme of arrangement. Under the scheme consideration, each ALLT unitholder will receive S$0.095 in cash and 1.6765 new EREIT units at an issue price of S$0.510. The total consideration implies a gross exchange ratio of 1.863x and a total scheme consideration of S$0.950 per ALLT unit, which is a 1.6% premium to the ALLT last close price of S$0.935 per unit (on 14 October). The merger was widely anticipated to avoid conflicts of interest arising from the proposed acquisition of ARA Asset Management by <a href="https://www.smartkarma.com/entities/esr-cayman-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Cayman (1821 HK)</a> for a total consideration of US$5.2 billion, which was announced on 5 August 2021. ESR Cayman which owns 67% of EREIT’s manager would also own 100% of ALLT’s manager on completion of the acquisition resulting in overlapping investment mandates.A key issue is on pricing particularly the EREIT issue price of S$0.510 which is based on EREIT’s 52-week high. Notably, at the last close EREIT price of S$0.465, implies a scheme consideration of S$0.875 per ALLT unit, which is a -6.5% discount to the ALLT last close price of S$0.935 per unit (on 14 October). <div class="content-highlight">As the cash consideration represents just 10% of the total scheme consideration, ALLT unitholders have greater exposure to any post-merger share price gains driven by the enlarged REIT’s higher free float, lower cost of capital, cost savings and higher growth potential. While short-term pricing concerns will linger, we note that the scheme consideration even at the last close EREIT price seems reasonable. Consequently, we believe that the merger will get the nod from both sets of unitholders.</div>

ESR-REIT (EREIT SP) announced the proposed merger with ARA LOGOS (ALLT SP) by way of a trust scheme of arrangement. Under the scheme consideration, each ALLT unitholder will receive S$0.095 in cash and 1.6765 new EREIT units at an issue price of S$0.510. The total consideration implies a gross exchange ratio of 1.863x and a total scheme consideration of S$0.950 per ALLT unit, which is a 1.6% premium to the ALLT last close price of S$0.935 per unit (on 14 October). The merger was widely anticipated to avoid conflicts of interest arising from the proposed acquisition of ARA Asset Management by ESR Cayman (1821 HK) for a total consideration of US$5.2 billion, which was announced on 5 August 2021. ESR Cayman which owns 67% of EREIT’s manager would also own 100% of ALLT’s manager on completion of the acquisition resulting in overlapping investment mandates.A key issue is on pricing particularly the EREIT issue price of S$0.510 which is based on EREIT’s 52-week high. Notably, at the last close EREIT price of S$0.465, implies a scheme consideration of S$0.875 per ALLT unit, which is a -6.5% discount to the ALLT last close price of S$0.935 per unit (on 14 October). As the cash consideration represents just 10% of the total scheme consideration, ALLT unitholders have greater exposure to any post-merger share price gains driven by the enlarged REIT’s higher free float, lower cost of capital, cost savings and higher growth potential. While short-term pricing concerns will linger, we note that the scheme consideration even at the last close EREIT price seems reasonable. Consequently, we believe that the merger will get the nod from both sets of unitholders.

ESR-REIT’s Proposed Merger with ARA LOGOS

Singapore

FLT offers investors an opportunity to invest in logistics and industrial real estate assets strategically located within major logistics and industrial markets of Australia, Germany and the Netherlands.

Frasers Logistics & Commercial Trust (FLT SP)

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Frasers Logistics & Commercial Trust (FLT SP)

Daiwa House Logistics Trust IPO: The Flow of Things

DHLT has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million). Overall, we believe that DHLT offers an attractive value...

Arun George

Daiwa House Logistics Trust Pre-IPO - Muted Forecasts and Gearing Could Affect Growth Potential

Daiwa House Logistics Trust (DHLT SP), a Japan pure-play logistics REIT, is looking to raise US$343m in its Singapore IPO.

Clarence Chu

ASEAN Builder's Scoop (11Nov21) - FLT Weak Reversions

FLT weak reversions; IREIT leasing improvements; UHU lower rental rates; Daiwa House Logistics new IPO listing; Cairnhill 16 launching soon; MEG...

SCCM Asia Research

REIT Watch - Nine S-Reits in Yield Focus index based on positive environmental attributes

According to the UN Environmental Programme, the real estate sector has one of the largest carbon footprints, contributing to...

Singapore Exchange Ltd (SGX)

ESR-REIT’s Proposed Merger with ARA LOGOS

A key issue is on pricing particularly the EREIT issue price of S$0.510, based on EREIT’s 52-week high. While short-term pricing concerns will...

Arun George

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