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>Mapletree Logistics Trust (MLT SP) to purchase 17 properties in China, Vietnam and Japan for ~S$1.4bn; DPU accretive by +2.2%</li><li>Ascendas India Trust (AIT SP) completes acquisition of Building Q1 in Aurum Q Parc at Navi Mumbai</li><li>Digital Realty seeks to list data centre-focused Digital Core REIT; FY22-23 dividend yield forecasts of 4.75-5%</li></ul>

Mapletree Logistics Trust (MLT SP) to purchase 17 properties in China, Vietnam and Japan for ~S$1.4bn; DPU accretive by +2.2%Ascendas India Trust (AIT SP) completes acquisition of Building Q1 in Aurum Q Parc at Navi MumbaiDigital Realty seeks to list data centre-focused Digital Core REIT; FY22-23 dividend yield forecasts of 4.75-5%

ASEAN Builder's Scoop (23Nov21) - MLT Acquires CN, VN, JPN Logistics for ~S$1.4bn

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/238/244/original/image_50824297521635443513931.png?1635443517" class="editor-image img-responsive" data-smartkarma-image-id="238244"></figure><h3><a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106" rel="noopener">Mapletree Commercial Trust (MCT SP)</a> 1H22 DPU +5.3% YoY; Reversions turning positive, VivoCity on track for a recovery play</h3><ul><li>1H22 revenue and NPI increased by 11.5% and 10.7% YoY, respectively, to S$243.7m (47.9% of BB est.) and S$189.9m (51.4% of BB est.), mainly due to lower rental rebates as well as compensation received from a pre-terminated lease at mTower.</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Mapletree Commercial Trust (MCT SP) 1H22 DPU +5.3% YoY; Reversions turning positive, VivoCity on track for a recovery play1H22 revenue and NPI increased by 11.5% and 10.7% YoY, respectively, to S$243.7m (47.9% of BB est.) and S$189.9m (51.4% of BB est.), mainly due to lower rental rebates as well as compensation received from a pre-terminated lease at mTower.

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> acquires logistics facility in South Korea at 4.2% NPI yield; Accretive to DPU</h3><ul><li>MLT has proposed an acquisition of Yeoju Logistics Centre in South Korea for KRW135bn (S$153.8m). The property spans over 70,400sqm in total GFA on ~56,200sqm of freehold land, with two blocks of 3-storey dry warehouses that were completed in 2019. The property is equipped with high quality building specifications, including strong floor loading of over 20kg newton psm, high floor-to-ceiling height of 10-17m, large contiguous floor plates of up to 14,200sqm and a full sprinkler system. The Property was independently valued at KRW139.6bn as at 2Sep21</li><li>The Property is strategically located in northern Yeoju, a newly established logistics hub situated northeast of the Yongin-Icheon market, which is the traditional logistics cluster in the Seoul Metropolitan Area. It is fully leased to one of South Korea’s largest online fashion platforms and a domestic third-party logistics service provider. The acquisition will raise MLT’s e-commerce revenue exposure in South Korea from 24% to 31%. It comes with a WALE (by NLA) of ~3.1yrs and built-in annual rent escalations</li><li>The acquisition is estimated to generate a NPI yield of 4.2% based on the property purchase price and is expected to be DPU accretive. Assuming the acquisition is 100% debt funded, MLT’s aggregate gearing ratio will be ~40.3%. The acquisition is expected to be completed by 4Q21. Upon completion, MLT’s total portfolio will comprise 167 properties with AUM of S$11.1bn.</li></ul>

SingaporeMapletree Logistics Trust (MLT SP) acquires logistics facility in South Korea at 4.2% NPI yield; Accretive to DPUMLT has proposed an acquisition of Yeoju Logistics Centre in South Korea for KRW135bn (S$153.8m). The property spans over 70,400sqm in total GFA on ~56,200sqm of freehold land, with two blocks of 3-storey dry warehouses that were completed in 2019. The property is equipped with high quality building specifications, including strong floor loading of over 20kg newton psm, high floor-to-ceiling height of 10-17m, large contiguous floor plates of up to 14,200sqm and a full sprinkler system. The Property was independently valued at KRW139.6bn as at 2Sep21The Property is strategically located in northern Yeoju, a newly established logistics hub situated northeast of the Yongin-Icheon market, which is the traditional logistics cluster in the Seoul Metropolitan Area. It is fully leased to one of South Korea’s largest online fashion platforms and a domestic third-party logistics service provider. The acquisition will raise MLT’s e-commerce revenue exposure in South Korea from 24% to 31%. It comes with a WALE (by NLA) of ~3.1yrs and built-in annual rent escalationsThe acquisition is estimated to generate a NPI yield of 4.2% based on the property purchase price and is expected to be DPU accretive. Assuming the acquisition is 100% debt funded, MLT’s aggregate gearing ratio will be ~40.3%. The acquisition is expected to be completed by 4Q21. Upon completion, MLT’s total portfolio will comprise 167 properties with AUM of S$11.1bn.

<h2>Singapore</h2><h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 241.969px;"><p> </p></td><td style="width: 241.969px;"><p>CLCT</p></td><td style="width: 242.062px;"><p>AIT</p></td></tr><tr><td style="width: 241.969px;"><p>Period</p></td><td style="width: 241.969px;"><p>1H21</p></td><td style="width: 242.062px;"><p>1H21</p></td></tr><tr><td style="width: 241.969px;"><p>Gross Revenue (S$m)</p></td><td style="width: 241.969px;"><p>176.9 (74.2% YoY)</p></td><td style="width: 242.062px;"><p>95.4 (-4% YoY)</p></td></tr><tr><td style="width: 241.969px;"><p>NPI (S$m)</p></td><td style="width: 241.969px;"><p>120.3 (84.4% YoY)</p></td><td style="width: 242.062px;"><p>77.3 (+5% YoY)</p></td></tr><tr><td style="width: 241.969px;"><p>DPU (S$ c)</p></td><td style="width: 241.969px;"><p>4.23 (40.1% YoY)</p></td><td style="width: 242.062px;"><p>0.042 (-9% YoY)</p></td></tr><tr><td style="width: 241.969px;"><p>NAV per Unit (S$)</p></td><td style="width: 241.969px;"><p>1.57</p></td><td style="width: 242.062px;"><p>1.1</p></td></tr><tr><td style="width: 241.969px;"><p>P/B (x)</p></td><td style="width: 241.969px;"><p>0.86</p></td><td style="width: 242.062px;"><p>1.32</p></td></tr><tr><td style="width: 241.969px;"><p>Occupancy (%)</p></td><td style="width: 241.969px;"><p>95.4 (Retail)</p><p>94.0 (Business Park)</p></td><td style="width: 242.062px;"><p>90</p></td></tr><tr><td style="width: 241.969px;"><p>Reversion (%)</p></td><td style="width: 241.969px;"><p>-2.1 (Retail)</p><p>+6.7 (Business Park)</p></td><td style="width: 242.062px;"><p>+8 (Bangalore)</p><p>+12 (Chennai)</p><p>+7-16% (Hyderabad)</p><p>+21 (Pune)</p></td></tr><tr><td style="width: 241.969px;"><p>Gearing (%)</p></td><td style="width: 241.969px;"><p>35.9</p></td><td style="width: 242.062px;"><p>33</p></td></tr><tr><td style="width: 241.969px;"><p>Cost of Debt (%)</p></td><td style="width: 241.969px;"><p>2.57</p></td><td style="width: 242.062px;"><p>5.3</p></td></tr><tr><td style="width: 241.969px;"><p>1 Yr Fwd Yield (%)</p></td><td style="width: 241.969px;"><p>6.67</p></td><td style="width: 242.062px;"><p>6.41</p></td></tr><tr><td style="width: 241.969px;"><p>Debt Hedged (%)</p></td><td style="width: 241.969px;"><p>78</p></td><td style="width: 242.062px;"><p>77</p></td></tr><tr><td style="width: 241.969px;"><p>Target Price</p></td><td style="width: 241.969px;"><p>N/A</p></td><td style="width: 242.062px;"><p>N/A</p></td></tr><tr><td style="width: 241.969px;"><p>Rating</p></td><td style="width: 241.969px;"><p>N/A</p></td><td style="width: 242.062px;"><p>N/A</p></td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) CLCTAITPeriod1H211H21Gross Revenue (S$m)176.9 (74.2% YoY)95.4 (-4% YoY)NPI (S$m)120.3 (84.4% YoY)77.3 (+5% YoY)DPU (S$ c)4.23 (40.1% YoY)0.042 (-9% YoY)NAV per Unit (S$)1.571.1P/B (x)0.861.32Occupancy (%)95.4 (Retail)94.0 (Business Park)90Reversion (%)-2.1 (Retail)+6.7 (Business Park)+8 (Bangalore)+12 (Chennai)+7-16% (Hyderabad)+21 (Pune)Gearing (%)35.933Cost of Debt (%)2.575.31 Yr Fwd Yield (%)6.676.41Debt Hedged (%)7877Target PriceN/AN/ARatingN/AN/A

ASEAN Builder's Scoop (29Jul21) - CLCT Consecutive Quarterly Improvements

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/ascendas-india-trust" target="_blank" data-smartkarma-citation="entities:935" rel="noopener">Ascendas India Trust (AIT SP)</a> to develop its first Data Centre campus in Navi Mumbai</h3><ul><li>AIT will invest ~INR12bn (~S$216.6m) to develop and operate phase one of its first data centre campus on a prime site in India. It will be one of the largest data centre campuses in Airoli, a growing data centre hub in Navi Mumbai. The 6.6acre greenfield site will be developed in phases into a fully-fitted data centre campus with a total potential built-up area of up to 575,000sqft and 90MW of power to host customers such as global technology giants and cloud service providers, as well as large domestic enterprise clients</li><li>The total costs of the acquisition including purchase consideration will be financed through a combination of debt and internal resources. The acquisition of the site from third-party vendors is expected to be completed by 3Q21. The data centre campus will comprise two buildings. In phase one, the first building, which is scheduled to be ready by 2Q24, will have a built-up area of about 325,000sqft</li><li>The data centre campus site is situated in a prime location along Thane-Belapur Road, easily accessible from Mumbai city via the Eastern Express Highway. Navi Mumbai has emerged as a preferred data centre location since it offers proximity to sea cable landing stations, larger land parcels with clear title, abundant and scalable power, developed infrastructure and seamless vendor neutral network connectivity</li><li>When fully developed, the data centre campus will have an overall capacity to host ~8,500 racks and operate at an efficient power usage effectiveness of ~1.4. Post-acquisition and completion of the phase one, AIT’s portfolio size (including pipeline projects) will increase by 1.2% from ~24.9m sqft to 25.2m sqft.</li></ul>

SingaporeAscendas India Trust (AIT SP) to develop its first Data Centre campus in Navi MumbaiAIT will invest ~INR12bn (~S$216.6m) to develop and operate phase one of its first data centre campus on a prime site in India. It will be one of the largest data centre campuses in Airoli, a growing data centre hub in Navi Mumbai. The 6.6acre greenfield site will be developed in phases into a fully-fitted data centre campus with a total potential built-up area of up to 575,000sqft and 90MW of power to host customers such as global technology giants and cloud service providers, as well as large domestic enterprise clientsThe total costs of the acquisition including purchase consideration will be financed through a combination of debt and internal resources. The acquisition of the site from third-party vendors is expected to be completed by 3Q21. The data centre campus will comprise two buildings. In phase one, the first building, which is scheduled to be ready by 2Q24, will have a built-up area of about 325,000sqftThe data centre campus site is situated in a prime location along Thane-Belapur Road, easily accessible from Mumbai city via the Eastern Express Highway. Navi Mumbai has emerged as a preferred data centre location since it offers proximity to sea cable landing stations, larger land parcels with clear title, abundant and scalable power, developed infrastructure and seamless vendor neutral network connectivityWhen fully developed, the data centre campus will have an overall capacity to host ~8,500 racks and operate at an efficient power usage effectiveness of ~1.4. Post-acquisition and completion of the phase one, AIT’s portfolio size (including pipeline projects) will increase by 1.2% from ~24.9m sqft to 25.2m sqft.

ASEAN Builder's Scoop (5Jul21) - AIT Builds Its First DC in Navi Mumbai

Singapore

Ascendas India Trust is a business trust that invests in real estate. The trust acquires, owns, and develops land for business use.

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Ascendas India Trust (AIT SP)

ASEAN Builder's Scoop (23Nov21) - MLT Acquires CN, VN, JPN Logistics for ~S$1.4bn

MLT acquires CN, VN, JPN logistics for ~S$1.4bn; AIT completes Navi Mumbai acq; Digital Core REIT offers 4.75-5% yield; FLI resi buoys 3Q21...

SCCM Asia Research

ASEAN Builder's Scoop (28Oct21)

MCT reversions turning positive; AIT declining occupancies; KORE robust double-digit reversions; UOL/SPLG JV won Watten Estate en-bloc; Phils...

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ASEAN Builder's Scoop (21Oct21)

MLT acquires South Korean logistics at 4.2% yield; AIT completes stage 1 of Mumbai DC; OHL provides loan to Pindan Group; MY-SG RTS may revive...

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ASEAN Builder's Scoop (29Jul21) - CLCT Consecutive Quarterly Improvements

CLCT consecutive quarterly improvements; AIT healthy collections, robust reversions; EREIT unvexed by Phase 2; Phils remaining tax reforms still...

SCCM Asia Research

ASEAN Builder's Scoop (5Jul21) - AIT Builds Its First DC in Navi Mumbai

AIT builds its first DC in Navi Mumbai; ART in dispute on Park Hotel CQ asset; Link REIT looks into SG office market; LMRT closes 16 malls for...

SCCM Asia Research

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