ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Thematic (Sector/Industry)

<h2>Indonesia Property - E-commerce saving the day </h2>An audience in Jakarta with the Head of Research at Jones Lang Lasalle Indonesia, James Taylor, revealed a mixed picture across different segments of the market, with the office segment facing record levels of supply, retail continuing to see very little supply, bar in Jakarta's satellite cities and industrial estates seeing strong demand, especially from logistics players. The "song remains the same" for the office segment in Jakarta, with 2017 seeing record levels of supply, feeding through to falling occupancies and rentals.2Q17 has seen as a spike in take up, with appetite from e-commerce exploding, with demand coming from the online market, including online marketplaces, Fintech, travel sites, and online gaming. Total supply over the next five years will amount to 1.6m sq m, with 700,000 sqm coming on this year alone. Overall occupancies continue to fall, with the overall occupancy number at 82% but grade "A" in the 70%s versus the peak of 95% in 2014. There is activity in the market, with a number of companies taking advantage of similar rents in newer buildings to upgrade. The condo market continues to see active investment, with GIC recently tying up with <a href="https://www.smartkarma.com/entities/5552" target="_blank" data-smartkarma-citation="entities:5552:1">Intiland Development Tbk Pt (DILD IJ)</a> to develop a new condominium near Grand Indonesia called 57 Promenade and this follows on from its South Quarter development, again with <a href="https://www.smartkarma.com/entities/5552" target="_blank" data-smartkarma-citation="entities:5552:1">Intiland Development Tbk Pt (DILD IJ)</a>. Smaller and cheaper units are seeing good demand.The retail property market is tight in Central Jakarta, with high occupancy rates and stable rents due to the moratorium on new mall developments. Food &amp; Beverage and entertainment are driving new demand. New Malls in satellite cities of Jakarta, such as AEON's Mall in BSDE, continue to see very strong traffic. The demand for good quality logistic space is huge, given very limited supply. E-commerce, 3PL, and FMCG are driving demand for this space. Private Equity firms and Sovereign Wealth Funds are actively looking for exposure.

Indonesia Property - E-commerce saving the day An audience in Jakarta with the Head of Research at Jones Lang Lasalle Indonesia, James Taylor, revealed a mixed picture across different segments of the market, with the office segment facing record levels of supply, retail continuing to see very little supply, bar in Jakarta's satellite cities and industrial estates seeing strong demand, especially from logistics players. The "song remains the same" for the office segment in Jakarta, with 2017 seeing record levels of supply, feeding through to falling occupancies and rentals.2Q17 has seen as a spike in take up, with appetite from e-commerce exploding, with demand coming from the online market, including online marketplaces, Fintech, travel sites, and online gaming. Total supply over the next five years will amount to 1.6m sq m, with 700,000 sqm coming on this year alone. Overall occupancies continue to fall, with the overall occupancy number at 82% but grade "A" in the 70%s versus the peak of 95% in 2014. There is activity in the market, with a number of companies taking advantage of similar rents in newer buildings to upgrade. The condo market continues to see active investment, with GIC recently tying up with Intiland Development Tbk Pt (DILD IJ) to develop a new condominium near Grand Indonesia called 57 Promenade and this follows on from its South Quarter development, again with Intiland Development Tbk Pt (DILD IJ). Smaller and cheaper units are seeing good demand.The retail property market is tight in Central Jakarta, with high occupancy rates and stable rents due to the moratorium on new mall developments. Food &amp; Beverage and entertainment are driving new demand. New Malls in satellite cities of Jakarta, such as AEON's Mall in BSDE, continue to see very strong traffic. The demand for good quality logistic space is huge, given very limited supply. E-commerce, 3PL, and FMCG are driving demand for this space. Private Equity firms and Sovereign Wealth Funds are actively looking for exposure.

Indonesia Property - E-Commerce Saving the Day - On the Ground in J -Town

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Debt Capital Markets

Agung Podomoro Land / Debt Capital Markets

We view Agung Podomoro Land (APL) as “Medium Risk” on the LARA scale, driven by the diversified portfolio of projects, long operating track record, and history of prudent financial management and policy. The key credit driver in the near term will be the outcome of the regulatory and suspension issue involving Pluit City. This is one of the company’s reclamation projects, with large unrecognised marketing sales and customer advances having been received. Aside from this matter, we like APL’s large portfolio of investment properties - 11 malls, an office building and six hotels - which accounted for 27% of revenue and 43% of EBITDA in FY 2016. Its property sales business is also diversified across the low- and high-end segments, as well as geographically. Our Credit Bias is “Negative”, given the regulatory uncertainty surrounding the Pluit City project - which has large unrecognised marketing sales and carrying value - as well as the challenging real estate environment in Indonesia. We view the company's corporate governance as “Weak” on the LAGA scale, primarily due to: [1] majority ownership (75%) and control by a single shareholder, albeit the family appears to be prudent; [2] short track record as a listed company (since 2010); and [3] prior management team's involvement in a bribery case. Based on the peer comps and considering the new issuer premium, we see fair value for APL’s proposed Notes at around 6%.

We view Agung Podomoro Land (APL) as “Medium Risk” on the LARA scale, driven by the diversified portfolio of projects, long operating track record, and history of prudent financial management and policy. The key credit driver in the near term will be the outcome of the regulatory and suspension issue involving Pluit City. This is one of the company’s reclamation projects, with large unrecognised marketing sales and customer advances having been received. Aside from this matter, we like APL’s large portfolio of investment properties - 11 malls, an office building and six hotels - which accounted for 27% of revenue and 43% of EBITDA in FY 2016. Its property sales business is also diversified across the low- and high-end segments, as well as geographically.  Our Credit Bias is “Negative”, given the regulatory uncertainty surrounding the Pluit City project - which has large unrecognised marketing sales and carrying value - as well as the challenging real estate environment in Indonesia.  We view the company's corporate governance as “Weak” on the LAGA scale, primarily due to: [1] majority ownership (75%) and control by a single shareholder, albeit the family appears to be prudent; [2] short track record as a listed company (since 2010); and [3] prior management team's involvement in a bribery case.  Based on the peer comps and considering the new issuer premium, we see fair value for APL’s proposed Notes at around 6%. 

Agung Podomoro Land - New Issue Snapshot - Lucror Analytics

Indonesia

PT Agung Podomoro Land Tbk is a property development company.

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Agung Podomoro Land (APLN IJ)

Indonesia Property - E-Commerce Saving the Day - On the Ground in J -Town

Indonesia Property - E-commerce saving the day An audience in Jakarta with the Head of Research at Jones Lang Lasalle Indonesia, James Taylor,...

Angus Mackintosh

Agung Podomoro Land - New Issue Snapshot - Lucror Analytics

We view Agung Podomoro Land (APL) as “Medium Risk” on the LARA scale, driven by the diversified portfolio of projects, long operating track record,...

Lucror Analytics

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