Energy Transition | AI | Shifting World Order, Mint Finance

Suhas Reddy

Energy Transition | AI | Shifting World Order

Deep Fundamental Analysis

Mint Finance

Mint Finance's investment research blends deep fundamental analysis with technical & quant insights. Investment strategies straddle across multiple asset classes with risk management embedded into every trade to deliver an outsized reward-to-risk ratio.

Mint Finance's research is centered around three key themes. First, energy transition and climate change. Second, artificial intelligence. Third, shifting world order with its impact across politics and monetary economics.

Thematic (Sector/Industry)

<ul>
<li>Growth in commercial real estate to be subdued in 2024 due to weak demand, especially for office spaces.</li>
<li>Concerns over CRE loan defaults grow stronger as the industry faces a liquidity crunch.</li>
<li>Delinquency rates of commercial real estate loans rise for five consecutive quarters till Q32023.</li>
</ul>


Growth in commercial real estate to be subdued in 2024 due to weak demand, especially for office spaces.
Concerns over CRE loan defaults grow stronger as the industry faces a liquidity crunch.
Delinquency rates of commercial real estate loans rise for five consecutive quarters till Q32023.


Rough Road Ahead for US Commercial Real Estate but Industrial CRE Is Rooted to Outperform Others

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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> to acquire an industrial property at Tuas South for S$21m; Expanding its Space Optimisation Business</h3><ul><li>LHN has accepted the OTP for the purchase of Tuas South Property for S$21m. The acquisition is expected to complete by 1Oct21 and will be financed by a mix of internal sources of funding and bank borrowings</li><li>The Tuas South Property is located at 55 Tuas South Avenue 1, with a land area of 51,655sqft and a remaining lease of ~39 years. The property has GFA of 129,138sqft and consists of (i) an 11-storey industrial building with a basement carpark; (ii) a part single-storey industrial factory; and (iii) a part single-storey industrial factory with two storey workers’ dormitory. This property is a foreclosed property and DBS Bank is selling it as the mortgagee of the property exercising its power of sale</li><li>LHN intends to operate the property under the industrial segment of its Space Optimisation Business to provide business spaces under the Business 2 zone for industrial developments as well as a range of value-added logistics support services to its tenants</li></ul>Comments: The Tuas South Property will add 2.9% of Industrial Space to LHN’s Space Optimisation Business, bringing total Industrial space to 1.83m sqft. LHN has been rationalizing its Industrial Space in FY20/21 by not renewing expired leases that are deemed underperforming. Including the 2 new JVs at 202 Kallang Bahru and 5 Toa Payoh, Industrial Space registered a net decline of -1.10m sqft (or -38.3%) over the last two years. We are positive on the acquisition given the strategic location and favorable price. The Consideration of S$21m translates to S$163psf, which is lower than the last two industrial property transactions along Tuas South Avenue 1 in 2020 at S$194psf and S$222psf, respectively (source: edgeprop). We expect future CapEx should be small as the property’s existing GFA of 129,138sqf is already at its maximum allowable plot ratio of 2.5 under the URA’s Master Plan 2019.

SingaporeLHN Ltd (LHN SP) to acquire an industrial property at Tuas South for S$21m; Expanding its Space Optimisation BusinessLHN has accepted the OTP for the purchase of Tuas South Property for S$21m. The acquisition is expected to complete by 1Oct21 and will be financed by a mix of internal sources of funding and bank borrowingsThe Tuas South Property is located at 55 Tuas South Avenue 1, with a land area of 51,655sqft and a remaining lease of ~39 years. The property has GFA of 129,138sqft and consists of (i) an 11-storey industrial building with a basement carpark; (ii) a part single-storey industrial factory; and (iii) a part single-storey industrial factory with two storey workers’ dormitory. This property is a foreclosed property and DBS Bank is selling it as the mortgagee of the property exercising its power of saleLHN intends to operate the property under the industrial segment of its Space Optimisation Business to provide business spaces under the Business 2 zone for industrial developments as well as a range of value-added logistics support services to its tenantsComments: The Tuas South Property will add 2.9% of Industrial Space to LHN’s Space Optimisation Business, bringing total Industrial space to 1.83m sqft. LHN has been rationalizing its Industrial Space in FY20/21 by not renewing expired leases that are deemed underperforming. Including the 2 new JVs at 202 Kallang Bahru and 5 Toa Payoh, Industrial Space registered a net decline of -1.10m sqft (or -38.3%) over the last two years. We are positive on the acquisition given the strategic location and favorable price. The Consideration of S$21m translates to S$163psf, which is lower than the last two industrial property transactions along Tuas South Avenue 1 in 2020 at S$194psf and S$222psf, respectively (source: edgeprop). We expect future CapEx should be small as the property’s existing GFA of 129,138sqf is already at its maximum allowable plot ratio of 2.5 under the URA’s Master Plan 2019.

ASEAN Builder's Scoop (15Jul21) - LHN Expands Its Space Optimization Biz

Equity Analyst, LightStream Research

Supun Walpola

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/28061" target="_blank" data-smartkarma-citation="entities:28061:1">WeWork </a>(rebranded now as The We Company) is another unicorn eyeing for an IPO this year. WeWork confidentially filed for its IPO with the SEC late last year (December 2019). The company has not yet set a date for its IPO, but considering that the filing was done just weeks after Uber, WeWork’s IPO debut could also be just around the corner. The company is yet to release its S-1 statement to the public.WeWork seems to be following the footsteps of many unicorns these days, by pursuing a strategy of “growth at any cost”. WeWork’s revenue increased by around 10x over the past three years, but this has come at the expense of heavy losses and significant cash burn. WeWork’s robust growth is no doubt going to be its main selling point in the IPO, but with the recent examples of <a href="https://www.smartkarma.com/entities/430" target="_blank" data-smartkarma-citation="entities:430:1">Uber (UBER US)</a> and <a href="https://www.smartkarma.com/entities/24423" target="_blank" data-smartkarma-citation="entities:24423:1">Lyft Inc (LYFT US)</a> who were penalised heavily by public investors for pursuing unprofitable growth, we are not very confident that investors would buy WeWork’s growth story either.Perhaps the only way that WeWork could justify its unprofitable growth is through some really strong unit economics. However, according to our analysis, WeWork seems to be barely profitable even at the per desk level. WeWork’s higher spending on overheads and leasehold improvements seem to be stressing out its bottom line.

WeWork (rebranded now as The We Company) is another unicorn eyeing for an IPO this year. WeWork confidentially filed for its IPO with the SEC late last year (December 2019). The company has not yet set a date for its IPO, but considering that the filing was done just weeks after Uber, WeWork’s IPO debut could also be just around the corner. The company is yet to release its S-1 statement to the public.WeWork seems to be following the footsteps of many unicorns these days, by pursuing a strategy of “growth at any cost”. WeWork’s revenue increased by around 10x over the past three years, but this has come at the expense of heavy losses and significant cash burn. WeWork’s robust growth is no doubt going to be its main selling point in the IPO, but with the recent examples of Uber (UBER US) and Lyft Inc (LYFT US) who were penalised heavily by public investors for pursuing unprofitable growth, we are not very confident that investors would buy WeWork’s growth story either.Perhaps the only way that WeWork could justify its unprofitable growth is through some really strong unit economics. However, according to our analysis, WeWork seems to be barely profitable even at the per desk level. WeWork’s higher spending on overheads and leasehold improvements seem to be stressing out its bottom line.

WeWork IPO Preview: “Growth at Any Cost” and Some Really Bad Unit Economics

Amareos

Ryan Shea

Summary: Housing has several characteristics that mean it is almost perfectly designed to be prone to bubble-like behaviour. By definition a bubble occurs when the price of an asset is significantly overvalued making it increasingly difficult to justify based on underlying fundamentals. In such situations it is the overriding optimism of the crowd, with unrealistically high expectations, that acts as the propellant for further gains. Ten years on from the bursting of the US housing market…

Summary: Housing has several characteristics that mean it is almost perfectly designed to be prone to bubble-like behaviour. By definition a bubble occurs when the price of an asset is significantly overvalued making it increasingly difficult to justify based on underlying fundamentals. In such situations it is the overriding optimism of the crowd, with unrealistically high expectations, that acts as the propellant for further gains. Ten years on from the bursting of the US housing market…

The Market Sentimentalist: Global Real Estate – Where Are The Risks Residing?

Founder-CEO & Chief Analyst, Real Estate Foresight

Robert Ciemniak

Founder-CEO & Chief Analyst

Real Estate Foresight

Since 2012, REF has been helping investors with market research, project due diligence, and strategy development. This has ranged from detailed assessments and estimates on distressed developers' project portfolios to market due diligence on specific projects to macro-level questions linked to demand for commodities. The unique combination of the housing markets and developer data from data partner China Index Academy in Beijing, primary research, and technology-powered alternative data collection from public sources result in a valuable content set used in REF analytics and reports.

Predictive Analytics for China Property

Three quick takeaways from the annual 2016 data on commercial property sales transactions - income producing assets in office, retail, industrial, apartment and hotel sectors, excluding the development sites. Select data/charts courtesy of our data partner <a href="http://www.rcanalytics.com" target="_blank">Real Capital Analytics</a>:1. GLOBAL DOLLAR VOLUMES DOWNFor the first time since 2009, the global volumes declined overall and across the major regions. Low interest rates had clearly given a boost to volumes over the past 7 years, with the rich…

Three quick takeaways from the annual 2016 data on commercial property sales transactions - income producing assets in office, retail, industrial, apartment and hotel sectors, excluding the development sites. Select data/charts courtesy of our data partner Real Capital Analytics:1. GLOBAL DOLLAR VOLUMES DOWNFor the first time since 2009, the global volumes declined overall and across the major regions. Low interest rates had clearly given a boost to volumes over the past 7 years, with the rich…

Global Capital Trends In Real Estate In 2016

United States

Boston Properties, Inc. is a real estate investment trust.  The trust owns, manages, and develops office properties in the United States, with a significant presence in Boston, Washington, D.C., Midtown Manhattan and San Francisco.

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Boston Properties (BXP US)

Rough Road Ahead for US Commercial Real Estate but Industrial CRE Is Rooted to Outperform Others

US CRE shows bleak prospects for 2024 due to structural demand decline for office space. CRE loan delinquency on the rise for five sequential...

Mint Finance

ASEAN Builder's Scoop (15Jul21) - LHN Expands Its Space Optimization Biz

LHN expands its Space Optimization biz; PLIFE/IHH extends lease agreement; Condo rents flattish in Jun21; Aboitiz builds Batangas office complex;...

SCCM Asia Research

WeWork IPO Preview: “Growth at Any Cost” and Some Really Bad Unit Economics

WeWork (rebranded now as The We Company) is another unicorn eyeing for an IPO this year. WeWork confidentially filed for its IPO with the SEC late...

Supun Walpola

The Market Sentimentalist: Global Real Estate – Where Are The Risks Residing?

Summary: Housing has several characteristics that mean it is almost perfectly designed to be prone to bubble-like behaviour. By definition a bubble...

Amareos

Global Capital Trends In Real Estate In 2016

Three quick takeaways from the annual 2016 data on commercial property sales transactions - income producing assets in office, retail, industrial,...

Robert Ciemniak

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