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

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-02/Capture_0.PNG' alt='Singapore office assets' />
 </figure>
 <div class='content-caption'>Singapore office assets</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
According to data from the Urban Redevelopment Authority (URA), office rental prices in Q4 2021 have improved by 0.9 per cent quarter on quarter. The improvement in Q4 2021 comes after a decline of 3.5 per cent in the previous quarter. On a year-on-year basis, office rents have improved by 1.9 per cent in 2021, after dipping over 8.5 per cent in 2020.

Office vacancy rates have also shown a slight improvement in the latest Q4 2021 at 12.8 per cent. 
Listed in Singapore are five S-REITs with significant exposure to local office assets: CapitaLand Integrated Commercial Trust (CICT), Mapletree Commercial Trust (MCT), Suntec REIT, Keppel REIT, and OUE Commercial REIT. Three have reported full year 2021 results. 
CICT is a diversified S-Reit which has 36.8 per cent of its portfolio value in office-related assets with a majority located in Singapore. It reported a full-year 2021 gross revenue exceeding S$1.3 billion and net property income of over S$951 million from its enlarged portfolio since the merger of CapitaLand Mall Trust and CapitaLand Commercial Trust in 2020.

CICT's office portfolio has seen average office rentals improve 2.6 per cent quarter on quarter to S$10.33 psf on Dec 31, 2021 and improving from S$10.27 psf on Dec 31, 2020. The Reit's office occupancy rate stands at 91.5 per cent and it notes that the gap between committed rents and expired rents is expected to narrow as office market rentals look to improve.

CICT's major new leases and renewals completed in Q4 2021 and January 2022 included GIC, Mabanaft and Satellite (International) Singapore, and the Reit aims to continue to backfill vacancy in the portfolio as well as manage leases expiring in 2022. 
Suntec Reit has 82.2 per cent of its diversified portfolio in the office sector. It reported a full year 2021 gross revenue of over S$358 million, increasing 13.5 per cent year on year, and a net property income of over S$254 million, expanding 27.4 per cent year on year.

Suntec Reit's 3 Singapore office properties - Suntec City Office, One Raffles Quay, and MBFC Towers 1 and 2 - have an overall occupancy rate of 97.5 per cent, improving from 97.0 per cent the year before and exceeding that of Singapore's Core CBD occupancy rate of 93.3 per cent. Rent reversions grew 3.2 per cent in 2021 and its top 3 new tenants in 2021 include sectors from technology, media and telecommunications, banking, insurance and financial services, and manufacturing &amp; distribution.

Suntec Reit expects the outlook for its Singapore office portfolio to improve in tandem with economic recovery and income contribution to increase driven by cumulative positive rent reversions achieved in the past 14 quarters. However, the Reit notes that high expiry rents may result in weak positive rent reversion.

Keppel Reit is a pure-play office S-Reit with 78.4 per cent of its portfolio in Singapore office assets. It declared full year net property income of over S$172 million, increasing 27.3 per cent year on year and driven by acquisitions of Keppel Bay Tower in Singapore and Blue &amp; William in North Sydney and divestment of 275 George Street in Brisbane.

Keppel Reit has an occupancy rate of 95.4 per cent and its tenant retention rate was 62 per cent for FY2021.

OUE Commercial Reit is due to report second half and financial year ended Dec 31, 2021 after trading hours on Feb 16, 2022.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/real-estate/keppel-groups-s-reits-average-36-dpu-growth-for-fy2021"> </a><a href="https://www.businesstimes.com.sg/companies-markets/s-reits-with-singapore-office-assets-sanguine-on-rental-outlook">read </a>the original version.
</body></html>


      
    
    Singapore office assets


According to data from the Urban Redevelopment Authority (URA), office rental prices in Q4 2021 have improved by 0.9 per cent quarter on quarter. The improvement in Q4 2021 comes after a decline of 3.5 per cent in the previous quarter. On a year-on-year basis, office rents have improved by 1.9 per cent in 2021, after dipping over 8.5 per cent in 2020.

Office vacancy rates have also shown a slight improvement in the latest Q4 2021 at 12.8 per cent.  
Listed in Singapore are five S-REITs with significant exposure to local office assets: CapitaLand Integrated Commercial Trust (CICT), Mapletree Commercial Trust (MCT), Suntec REIT, Keppel REIT, and OUE Commercial REIT. Three have reported full year 2021 results.  
CICT is a diversified S-Reit which has 36.8 per cent of its portfolio value in office-related assets with a majority located in Singapore. It reported a full-year 2021 gross revenue exceeding S$1.3 billion and net property income of over S$951 million from its enlarged portfolio since the merger of CapitaLand Mall Trust and CapitaLand Commercial Trust in 2020.

CICT's office portfolio has seen average office rentals improve 2.6 per cent quarter on quarter to S$10.33 psf on Dec 31, 2021 and improving from S$10.27 psf on Dec 31, 2020. The Reit's office occupancy rate stands at 91.5 per cent and it notes that the gap between committed rents and expired rents is expected to narrow as office market rentals look to improve.

CICT's major new leases and renewals completed in Q4 2021 and January 2022 included GIC, Mabanaft and Satellite (International) Singapore, and the Reit aims to continue to backfill vacancy in the portfolio as well as manage leases expiring in 2022.  
Suntec Reit has 82.2 per cent of its diversified portfolio in the office sector. It reported a full year 2021 gross revenue of over S$358 million, increasing 13.5 per cent year on year, and a net property income of over S$254 million, expanding 27.4 per cent year on year.

Suntec Reit's 3 Singapore office properties - Suntec City Office, One Raffles Quay, and MBFC Towers 1 and 2 - have an overall occupancy rate of 97.5 per cent, improving from 97.0 per cent the year before and exceeding that of Singapore's Core CBD occupancy rate of 93.3 per cent. Rent reversions grew 3.2 per cent in 2021 and its top 3 new tenants in 2021 include sectors from technology, media and telecommunications, banking, insurance and financial services, and manufacturing &amp; distribution.

Suntec Reit expects the outlook for its Singapore office portfolio to improve in tandem with economic recovery and income contribution to increase driven by cumulative positive rent reversions achieved in the past 14 quarters. However, the Reit notes that high expiry rents may result in weak positive rent reversion.

Keppel Reit is a pure-play office S-Reit with 78.4 per cent of its portfolio in Singapore office assets. It declared full year net property income of over S$172 million, increasing 27.3 per cent year on year and driven by acquisitions of Keppel Bay Tower in Singapore and Blue &amp; William in North Sydney and divestment of 275 George Street in Brisbane.

Keppel Reit has an occupancy rate of 95.4 per cent and its tenant retention rate was 62 per cent for FY2021.

OUE Commercial Reit is due to report second half and financial year ended Dec 31, 2021 after trading hours on Feb 16, 2022.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits with Singapore office assets sanguine on rental outlook

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>SCCM | <a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> – Mixed FY21; Office will be key to revival (BUY; TP SGD2.24/share)</li><li>SCCM | <a href="https://www.smartkarma.com/entities/aims-amp-capital-industrial" target="_blank" data-smartkarma-citation="entities:933" rel="noopener">AIMS APAC REIT (AAREIT SP)</a> – On a solid organic growth path (BUY; TP S$1.65/Unit)</li><li>SCCM | <a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934" rel="noopener">ESR-REIT (EREIT SP)</a> – Steady performance with new acquisitions in sight (BUY; TP S$0.55/Unit)</li></ul>

SCCM | Capitaland Integrated Commercial Trust (CICT SP) – Mixed FY21; Office will be key to revival (BUY; TP SGD2.24/share)SCCM | AIMS APAC REIT (AAREIT SP) – On a solid organic growth path (BUY; TP S$1.65/Unit)SCCM | ESR-REIT (EREIT SP) – Steady performance with new acquisitions in sight (BUY; TP S$0.55/Unit)

ASEAN Builder's Scoop (4Feb22) - CICT Office Will Be Key to Revival

<ul><li><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> 2H21 DPU -8.9% YoY; Office cap rates compressed while retail rental reversions improving   </li><li><a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a> 3Q22 Business Updates – High occupancies a priority against falling reversions</li><li><a href="https://www.smartkarma.com/entities/ascott-residence-trust" target="_blank" data-smartkarma-citation="entities:6560" rel="noopener">Ascott Residence Trust (ART SP)</a> 2H21 DPU +14% YoY; RevPAU rebounded strongly with plenty of growth initiatives in the pipelines</li></ul>

Capitaland Integrated Commercial Trust (CICT SP) 2H21 DPU -8.9% YoY; Office cap rates compressed while retail rental reversions improving   Mapletree North Asia Commercial Trust (MAGIC SP) 3Q22 Business Updates – High occupancies a priority against falling reversionsAscott Residence Trust (ART SP) 2H21 DPU +14% YoY; RevPAU rebounded strongly with plenty of growth initiatives in the pipelines

ASEAN Builder's Scoop (28Jan22) - CICT Office Cap Rates Compressed

<ul><li><a href="https://www.smartkarma.com/entities/keppel-dc-reit" target="_blank" data-smartkarma-citation="entities:85" rel="noopener">Keppel DC REIT (KDCREIT SP)</a> 2H21 DPU +2.8% YoY; Rising portfolio valuations as Cap rates tighten in APAC</li><li><a href="https://www.smartkarma.com/entities/parkway-life-reit" target="_blank" data-smartkarma-citation="entities:13422" rel="noopener">Parkway Life REIT (PREIT SP)</a> Parkway Life REIT (PREIT SP) 4Q21 DPU came in flat; Consistently expensive but delivering stable results</li><li><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> CapitaLand Integrated Commercial Trust (CICT SP) to sell JCube at &lt;4% yield; Received a 10yrs ROFR on the potential redevelopment of the site  </li></ul>

Keppel DC REIT (KDCREIT SP) 2H21 DPU +2.8% YoY; Rising portfolio valuations as Cap rates tighten in APACParkway Life REIT (PREIT SP) Parkway Life REIT (PREIT SP) 4Q21 DPU came in flat; Consistently expensive but delivering stable resultsCapitaland Integrated Commercial Trust (CICT SP) CapitaLand Integrated Commercial Trust (CICT SP) to sell JCube at &lt;4% yield; Received a 10yrs ROFR on the potential redevelopment of the site  

ASEAN Builder's Scoop (25Jan22) - KDCREIT Rising Portfolio Valuations

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

Equity Capital Markets

Wanda Commercial Management Group / Equity Capital Markets

<ul>
<li>Wanda Commercial Management Group (WCMG) is looking to raise up to US$4bn in its upcoming Hong Kong IPO.</li>
<li>WCMG is a commercial operation service provider. As of Oct 2021, the firm managed 398 malls with total gross floor area (GFA) under management of 56.5m sqm.</li>
<li>In this note, we will talk about the positive aspects of the deal.</li>
</ul>


Wanda Commercial Management Group (WCMG) is looking to raise up to US$4bn in its upcoming Hong Kong IPO.
WCMG is a commercial operation service provider. As of Oct 2021, the firm managed 398 malls with total gross floor area (GFA) under management of 56.5m sqm.
In this note, we will talk about the positive aspects of the deal.


Wanda Commercial Management Group Pre-IPO - The Positives - Aiming for One of HK's Largest 2022 IPOs

Singapore

Capitaland Integrated Commercial Trust operates as a retail estate investment trust. The Compnay invests in retail and office properties and integrated developments. Capitaland Integrated Commercial Trust serves clients in Asia Pacific.

Capitaland Integrated Commercial Trust (CICT SP)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Capitaland Integrated Commercial Trust (CICT SP)

REIT Watch - S-Reits with Singapore office assets sanguine on rental outlook

According to data from the Urban Redevelopment Authority (URA), office rental prices in Q4 2021 have improved by 0.9 per cent...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (4Feb22) - CICT Office Will Be Key to Revival

AAREIT on a solid organic growth path; EREIT steady as she goes; MBS expansion set for 2026 completion; Orchard Towers S$1.6bn enbloc; SREIT sets...

SCCM Asia Research

ASEAN Builder's Scoop (28Jan22) - CICT Office Cap Rates Compressed

MAGIC high occupancy a priority; ART RevPAU rebounded strongly; CDREIT underlying operations recovering; FHT QoQ ongoing recovery; MREIT to acquire...

SCCM Asia Research

ASEAN Builder's Scoop (25Jan22) - KDCREIT Rising Portfolio Valuations

PREIT consistently pricey as results stable; CICT sells JCube at <4% yield; FLT divests CSE at ~2.5% yield; YLLG sells out Shanghai project; SPALI...

SCCM Asia Research

Wanda Commercial Management Group Pre-IPO - The Positives - Aiming for One of HK's Largest 2022 IPOs

Wanda Commercial Management Group (WCMG) is looking to raise up to US$4bn in its upcoming Hong Kong IPO. In this note, we talk about the positive...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)