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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2>
<h3>
<a href="https://www.smartkarma.com/entities/eagle-hospitality-trust" target="_blank" data-smartkarma-citation="entities:28059" rel="noopener">Eagle Hospitality Trust (EAGLEHT SP)</a> five properties put on auction received qualified bids</h3>
Five out of 15 properties put up for auction have received qualified bids in the second bid round for EAGLEHT Chapter 11 assets held on 20May. The DBS trustee said its Chapter 11 entities received qualified bids for Sheraton Denver Tech Center, Four Points by Sheraton San Jose Airport, Embassy Suites by Hilton Anaheim North, Doubletree by Hilton Salt Lake City Airport, and Hilton Atlanta Northeast. The auction resulted in a US$24.8m net increase in the aggregate consideration for EAGLEHT's auctioned properties. A stalking-horse bidder, Madison Phoenix LLC, an affiliate of Monarch Alternative Capital, emerged successful for its bid of nine non-auctioned properties with an aggregate purchase price of US$326.5m. This is in accordance with the terms of the stalking-horse agreement between entities of EAGLEHT and the bidder, which effectively sets an opening price or price floor to protect the company selling the assets at low bids. Properties remaining in EAGLEHT's portfolio upon approval of the sale would comprise Queen Mary Long Beach, Delta Woodbridge, Hilton Houston Galleria Area and Crowne Plaza Dallas Near Galleria-Addison.

Singapore

Eagle Hospitality Trust (EAGLEHT SP) five properties put on auction received qualified bids
Five out of 15 properties put up for auction have received qualified bids in the second bid round for EAGLEHT Chapter 11 assets held on 20May. The DBS trustee said its Chapter 11 entities received qualified bids for Sheraton Denver Tech Center, Four Points by Sheraton San Jose Airport, Embassy Suites by Hilton Anaheim North, Doubletree by Hilton Salt Lake City Airport, and Hilton Atlanta Northeast. The auction resulted in a US$24.8m net increase in the aggregate consideration for EAGLEHT's auctioned properties. A stalking-horse bidder, Madison Phoenix LLC, an affiliate of Monarch Alternative Capital, emerged successful for its bid of nine non-auctioned properties with an aggregate purchase price of US$326.5m. This is in accordance with the terms of the stalking-horse agreement between entities of EAGLEHT and the bidder, which effectively sets an opening price or price floor to protect the company selling the assets at low bids. Properties remaining in EAGLEHT's portfolio upon approval of the sale would comprise Queen Mary Long Beach, Delta Woodbridge, Hilton Houston Galleria Area and Crowne Plaza Dallas Near Galleria-Addison.

ASEAN Builder's Scoop (25May21) - EAGLEHT Properties Received Qualified Bids

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

Mapletree Industrial Trust / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/mapletree-industrial-trust" target="_blank" data-smartkarma-citation="entities:40:1" rel="noopener">Mapletree Industrial Trust (MINT SP)</a> plans to raise around US$385m (S$513m) to partly fund the acquisition of 29 data centres located in the United States.We have covered three of the past placements for MINT:<ul>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/mint-placement-known-asset-more-data-centres-less-sme-exposure-heading-in-the-right-direction" target="_blank" rel="noopener">MINT Placement - Known Asset, More Data Centres, Less SME Exposure -&gt; Heading in the Right Direction</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/mint-placement-accretive-acquisition-but-look-out-for-the-rising-leverage" target="_blank" rel="noopener">MINT Placement - Accretive Acquisition but Look Out for the Rising Leverage</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/mint-placement-well-flagged-placement-but-only-marginally-accretive-past-deals-have-done-well" target="_blank" rel="noopener">MINT Placement - Well Flagged Placement but Only Marginally Accretive, Past Deals Have Done Well</a></li>
</ul>In this insight, we'll run the deal through our ECM framework and talk about deal dynamics.

Mapletree Industrial Trust (MINT SP) plans to raise around US$385m (S$513m) to partly fund the acquisition of 29 data centres located in the United States.We have covered three of the past placements for MINT:
MINT Placement - Known Asset, More Data Centres, Less SME Exposure -&gt; Heading in the Right Direction
MINT Placement - Accretive Acquisition but Look Out for the Rising Leverage
MINT Placement - Well Flagged Placement but Only Marginally Accretive, Past Deals Have Done Well
In this insight, we'll run the deal through our ECM framework and talk about deal dynamics.

Mapletree Industrial (MINT SP) Placement - Large but Accretive Deal, Becoming More like Keppel DC

<h2>Singapore</h2>
<h3>
<a href="https://www.smartkarma.com/entities/city-developments-ltd" target="_blank" data-smartkarma-citation="entities:57" rel="noopener">City Developments (CIT SP)</a> 1Q21 Business Updates – SG / AUS residential the bright spot; Gradual reopening of hotels should lift sentiment</h3>
<ul>
<li>Property Development: In Singapore, CIT sold 319 units with total sales value of S$513.6m in 1Q21, +72% YoY in units sold and +84.7% YoY in total sales value. Amber Park performed strongly with sales of around 100 units</li>
<li>In Feb, The Tapestry obtained its TOP (all 861 units are fully sold). Meanwhile, construction activities have resumed at all ongoing development projects. However, due to labour shortage which has affected the entire industry, activities have not returned to pre-COVID levels. CIT does not have any projects due for completion in 2021. To date, 324 units (60%) of Irwell Hill Residences have been sold. Acquisition of site at Northumberland Road will also be developed into a mixed-use project with 408 residential apartments of up to 23 storeys and commercial retail space on the ground floor</li>
<li>Meanwhile in Australia, fuelled by domestic demand, sales increased across CIT’s launched project. The Marker in Melbourne has pre-sold 80% of its 198 units and construction is on track to complete in 2022, while Brickworks Park in Brisbane has achieved pre-sales for 44% of the 132 released units. Waterbrook Bowral, a luxury retirement project in New South Wales that the Group has collaborated with Waterbrook Lifestyle Resorts on, has pre-sold 92% of the 77 townhouses launched and construction is in progress</li>
<li>Investment Properties: 1Q21 committed occupancy for SG office remains resilient at 91.4%, above island-wide occupancy of 88.1%, with positive rental reversion. SG retail portfolio continues to face headwinds. Footfall in the malls for the quarter has been relatively stable, though it is still lower than pre COVID-19 levels. Despite lower footfall, gross turnover sales (GTO) of CIT malls remain strong with 1Q21 GTO registering an increase of over 5% YoY compared to 1Q20 levels. As of 31Mar21, committed occupancy for retail space remains strong at 92.1%, above island-wide occupancy of 91.5%. In Thailand, since Mar21, part of Jungceylon, the Group’s major retail mall in Phuket has been temporarily closed to reduce operational cost. In China, while tenants remain cautious and slow to commit, office leasing demand is gradually returning. In Suzhou, Hong Leong City Center’s Grade-A office tower is now 85% occupied. In Japan, residential rental apartment portfolio within Osaka and Yokohama continues to show stable occupancy and healthy leasing demand</li>
<li>Hotel Operations: 1Q21 global occupancy dropped to 36.8% (1Q20: 52.5%) and global RevPAR decreased by 51.7% YoY to S$44.6 (1Q2020: S$92.4). Singapore continues to face challenges in 2021 until border restrictions are lifted. The UK was severely impacted, particularly in London. The US saw the country gradually reopening with the vaccine roll-out. New York and regional hotels achieved stronger occupancies in 1Q21 particularly with the weekend business. CIT’s M Social New York property in Times Square is expected to open in 2Q21. A community outbreak in Feb21 in Auckland led to lockdowns in New Zealand, which disrupted business and leisure travel in NZ over most of Feb and the early part of Mar</li>
<li>In Feb21, CIT acquired a 55% effective interest in Shenzhen Longgang Tusincere Tech Park in China’s high-growth Silicon Valley from its China JV, Sincere Property Group, and two entities of China Ping An for RMB850m (~S$174m). CIT now holds an 84.6% equity interest in the holding company, Shenzhen Tusincere Technology Park Development, which holds a 65% interest in the project. The remaining 35% interest in the project is held by the Shenzhen Longgang District state-owned enterprise</li>
<li>Net gearing ratio (factoring in revaluation surplus from investment properties) stands at 65% with interest cover at 1.7 times. Cash reserves stands at S$3.4bn with cash and available undrawn committed bank facilities amounts to a total S$5.5bn</li>
<li>CIT currently trades at 19.8x FY21E P/E and 0.8x P/B.  </li>
</ul>

Singapore

City Developments (CIT SP) 1Q21 Business Updates – SG / AUS residential the bright spot; Gradual reopening of hotels should lift sentiment

Property Development: In Singapore, CIT sold 319 units with total sales value of S$513.6m in 1Q21, +72% YoY in units sold and +84.7% YoY in total sales value. Amber Park performed strongly with sales of around 100 units
In Feb, The Tapestry obtained its TOP (all 861 units are fully sold). Meanwhile, construction activities have resumed at all ongoing development projects. However, due to labour shortage which has affected the entire industry, activities have not returned to pre-COVID levels. CIT does not have any projects due for completion in 2021. To date, 324 units (60%) of Irwell Hill Residences have been sold. Acquisition of site at Northumberland Road will also be developed into a mixed-use project with 408 residential apartments of up to 23 storeys and commercial retail space on the ground floor
Meanwhile in Australia, fuelled by domestic demand, sales increased across CIT’s launched project. The Marker in Melbourne has pre-sold 80% of its 198 units and construction is on track to complete in 2022, while Brickworks Park in Brisbane has achieved pre-sales for 44% of the 132 released units. Waterbrook Bowral, a luxury retirement project in New South Wales that the Group has collaborated with Waterbrook Lifestyle Resorts on, has pre-sold 92% of the 77 townhouses launched and construction is in progress
Investment Properties: 1Q21 committed occupancy for SG office remains resilient at 91.4%, above island-wide occupancy of 88.1%, with positive rental reversion. SG retail portfolio continues to face headwinds. Footfall in the malls for the quarter has been relatively stable, though it is still lower than pre COVID-19 levels. Despite lower footfall, gross turnover sales (GTO) of CIT malls remain strong with 1Q21 GTO registering an increase of over 5% YoY compared to 1Q20 levels. As of 31Mar21, committed occupancy for retail space remains strong at 92.1%, above island-wide occupancy of 91.5%. In Thailand, since Mar21, part of Jungceylon, the Group’s major retail mall in Phuket has been temporarily closed to reduce operational cost. In China, while tenants remain cautious and slow to commit, office leasing demand is gradually returning. In Suzhou, Hong Leong City Center’s Grade-A office tower is now 85% occupied. In Japan, residential rental apartment portfolio within Osaka and Yokohama continues to show stable occupancy and healthy leasing demand
Hotel Operations: 1Q21 global occupancy dropped to 36.8% (1Q20: 52.5%) and global RevPAR decreased by 51.7% YoY to S$44.6 (1Q2020: S$92.4). Singapore continues to face challenges in 2021 until border restrictions are lifted. The UK was severely impacted, particularly in London. The US saw the country gradually reopening with the vaccine roll-out. New York and regional hotels achieved stronger occupancies in 1Q21 particularly with the weekend business. CIT’s M Social New York property in Times Square is expected to open in 2Q21. A community outbreak in Feb21 in Auckland led to lockdowns in New Zealand, which disrupted business and leisure travel in NZ over most of Feb and the early part of Mar
In Feb21, CIT acquired a 55% effective interest in Shenzhen Longgang Tusincere Tech Park in China’s high-growth Silicon Valley from its China JV, Sincere Property Group, and two entities of China Ping An for RMB850m (~S$174m). CIT now holds an 84.6% equity interest in the holding company, Shenzhen Tusincere Technology Park Development, which holds a 65% interest in the project. The remaining 35% interest in the project is held by the Shenzhen Longgang District state-owned enterprise
Net gearing ratio (factoring in revaluation surplus from investment properties) stands at 65% with interest cover at 1.7 times. Cash reserves stands at S$3.4bn with cash and available undrawn committed bank facilities amounts to a total S$5.5bn
CIT currently trades at 19.8x FY21E P/E and 0.8x P/B.  


ASEAN Builder's Scoop (20May21) - CIT resi the bright spot

<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: 141.25pt;"> </td><td style="width: 141.2pt;">PRIME (US$)</td><td style="width: 141.2pt;">KORE (US$)</td><td style="width: 141.2pt;">MUST (US$)</td></tr><tr><td style="width: 141.25pt;">Period</td><td style="width: 141.2pt;">1Q21</td><td style="width: 141.2pt;">1Q21</td><td style="width: 141.2pt;">1Q21</td></tr><tr><td style="width: 141.25pt;">Gross Revenue (S$ m)</td><td style="width: 141.2pt;">35.9 (+2.5% YoY)</td><td style="width: 141.2pt;">34.6 (-2.1% YoY)</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">NPI (S$ m)</td><td style="width: 141.2pt;">23.0 (-2.0% YoY)</td><td style="width: 141.2pt;">20.4 (-2.8% YoY)</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">DPU (S$ c)</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">NAV per Unit (S$)</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">0.730</td></tr><tr><td style="width: 141.25pt;">P/B (x)</td><td style="width: 141.2pt;">0.99(Based on 4Q20 NAV)</td><td style="width: 141.2pt;">0.90 (Based on 4Q20 NAV)</td><td style="width: 141.2pt;">1.030 (Based on 4Q20 NAV)</td></tr><tr><td style="width: 141.25pt;">Occupancy (%)</td><td style="width: 141.2pt;">91.7</td><td style="width: 141.2pt;">91.6</td><td style="width: 141.2pt;">92.0</td></tr><tr><td style="width: 141.25pt;">Reversion (%)</td><td style="width: 141.2pt;">8.5</td><td style="width: 141.2pt;">5.7</td><td style="width: 141.2pt;">2.1</td></tr><tr><td style="width: 141.25pt;">Gearing (%)</td><td style="width: 141.2pt;">33.6</td><td style="width: 141.2pt;">37.5</td><td style="width: 141.2pt;">41.3</td></tr><tr><td style="width: 141.25pt;">Cost of Debt (%)</td><td style="width: 141.2pt;">2.8</td><td style="width: 141.2pt;">2.82</td><td style="width: 141.2pt;">3.18</td></tr><tr><td style="width: 141.25pt;">1 Yr Fwd Yield (%)</td><td style="width: 141.2pt;">8.24</td><td style="width: 141.2pt;">8.3</td><td style="width: 141.2pt;">8.00</td></tr><tr><td style="width: 141.25pt;">Debt Hedged (%)</td><td style="width: 141.2pt;">90.0</td><td style="width: 141.2pt;">84.7</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">Target Price</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">Rating</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td></tr></tbody></table><h3><a href="https://www.smartkarma.com/entities/prime-us-reit" target="_blank" data-smartkarma-citation="entities:28144" rel="noopener">Prime US REIT (PRIME SP)</a> 1Q21 Business Update – Robust operations metrics; Trading at an attractive 8+% USD yield  </h3><ul><li>1Q21 revenue and NPI came in +2.5% YoY and -2.0% YoY, respectively, to US$35.9m (25.2% BB est) and US$23.5m (26.7% BB est). 1Q21 DI came in -1.2% YoY at US$17.6m, which benefitted from lower interest cost. 1Q21 DPU was undisclosed</li><li>Leasing momentum remained robust with a positive rental reversion of +8.5% in 1Q21 (vs +8.7% in 4Q20 and +8.9% in 3Q20). Focusing on long-term leases – 57,647sqft of long-term leases were executed in 1Q21 at a rental reversion of +9.5%. Below-market portfolio in place rents (by 6.5%) also provide a buffer for rental reversion potential</li><li>Overall portfolio committed occupancy fell to 91.7% in 1Q21 (vs. 92.4% in 4Q20 and 92.6% in 3Q20). PRIME has ~100% of cash rental income with built-in rental escalations averaging over +2% pa. Portfolio occupancy still well above Class-A office average of 84.3%. Rent collections remained robust at 99% with minimal rent concessions. Portfolio WALE stood at 4.3%</li><li>Portfolio gearing stands at 33.8% (vs. 33.5% in 4Q20 and 32.7% in 3Q20) with average cost of debt of 2.8% pa. (vs. 2.7% in 4Q20 and 2.7% in 3Q20) and 90.0% of debt hedged</li><li>PRIME currently trades at 8.24% FY21E yield and 0.99x P/B.</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) PRIME (US$)KORE (US$)MUST (US$)Period1Q211Q211Q21Gross Revenue (S$ m)35.9 (+2.5% YoY)34.6 (-2.1% YoY)NANPI (S$ m)23.0 (-2.0% YoY)20.4 (-2.8% YoY)NADPU (S$ c)Not DisclosedNot DisclosedNANAV per Unit (S$)Not DisclosedNot Disclosed0.730P/B (x)0.99(Based on 4Q20 NAV)0.90 (Based on 4Q20 NAV)1.030 (Based on 4Q20 NAV)Occupancy (%)91.791.692.0Reversion (%)8.55.72.1Gearing (%)33.637.541.3Cost of Debt (%)2.82.823.181 Yr Fwd Yield (%)8.248.38.00Debt Hedged (%)90.084.7NATarget PriceNANANARatingNANANAPrime US REIT (PRIME SP) 1Q21 Business Update – Robust operations metrics; Trading at an attractive 8+% USD yield  1Q21 revenue and NPI came in +2.5% YoY and -2.0% YoY, respectively, to US$35.9m (25.2% BB est) and US$23.5m (26.7% BB est). 1Q21 DI came in -1.2% YoY at US$17.6m, which benefitted from lower interest cost. 1Q21 DPU was undisclosedLeasing momentum remained robust with a positive rental reversion of +8.5% in 1Q21 (vs +8.7% in 4Q20 and +8.9% in 3Q20). Focusing on long-term leases – 57,647sqft of long-term leases were executed in 1Q21 at a rental reversion of +9.5%. Below-market portfolio in place rents (by 6.5%) also provide a buffer for rental reversion potentialOverall portfolio committed occupancy fell to 91.7% in 1Q21 (vs. 92.4% in 4Q20 and 92.6% in 3Q20). PRIME has ~100% of cash rental income with built-in rental escalations averaging over +2% pa. Portfolio occupancy still well above Class-A office average of 84.3%. Rent collections remained robust at 99% with minimal rent concessions. Portfolio WALE stood at 4.3%Portfolio gearing stands at 33.8% (vs. 33.5% in 4Q20 and 32.7% in 3Q20) with average cost of debt of 2.8% pa. (vs. 2.7% in 4Q20 and 2.7% in 3Q20) and 90.0% of debt hedgedPRIME currently trades at 8.24% FY21E yield and 0.99x P/B.

ASEAN Builder's Scoop (19May21) - PRIME robust operations metrics

CapitaLand Ascendas REIT / Equity Capital Markets

<div><a href="https://www.smartkarma.com/entities/ascendas-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:39:1" rel="noopener">Ascendas Real Estate Investment Trust (AREIT SP)</a> aims to raise around US$320m (S$430m) to acquire the balance 75% stake in Galaxis. </div><div>This will be the second placement in under six months. Links to our previous coverage are below:</div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/areit-placement-expected-to-be-dpu-accretive-but-the-acquisition-might-take-a-while" target="_blank" rel="noopener">AREIT Placement - Expected to Be DPU Accretive but the Acquisition Might Take a While</a></li>
<li><a href="https://www.smartkarma.com/insights/areit-paying-for-acquisition-with-only-equity-doesn-t-add-up-dpu-to-fall-by-3-4" target="_blank" rel="noopener">AREIT - Paying for Acquisition with Only Equity Doesn’t Add Up, DPU to Fall by 3-4%</a></li>
<li><a href="https://www.smartkarma.com/insights/ascendas-reit-placement-multiple-acquisitions-to-be-made-starting-from-us-office-properties" target="_blank" rel="noopener">Ascendas REIT Placement - Multiple Acquisitions to Be Made, Starting From US Office Properties</a></li>
</ul></div>

Ascendas Real Estate Investment Trust (AREIT SP) aims to raise around US$320m (S$430m) to acquire the balance 75% stake in Galaxis. This will be the second placement in under six months. Links to our previous coverage are below:
AREIT Placement - Expected to Be DPU Accretive but the Acquisition Might Take a While
AREIT - Paying for Acquisition with Only Equity Doesn’t Add Up, DPU to Fall by 3-4%
Ascendas REIT Placement - Multiple Acquisitions to Be Made, Starting From US Office Properties


Ascendas REIT Placement - Smaller than the Last Deal, Should Be Accretive as Well

Singapore

City Developments Limited is a property developer and owner. The Company, through its subsidiaries, are principally engaged in the investment of properties and shares, property management, project management and the provision of consultancy services, hospitality-related information technology, and procurement services. City Developments has a global presence.

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City Developments (CIT SP)

ASEAN Builder's Scoop (25May21) - EAGLEHT Properties Received Qualified Bids

EAGLEHT properties received qualified bids; CIT warns of cooling measures; UEMS 1Q21 net loss narrows; ECW achieved 70% FY21 sales target; Phuket...

SCCM Asia Research

Mapletree Industrial (MINT SP) Placement - Large but Accretive Deal, Becoming More like Keppel DC

Mapletree Industrial Trust (MINT SP) plans to raise around US$385m (S$513m) to partly fund the acquisition of 29 data centres located in the United...

Sumeet Singh

ASEAN Builder's Scoop (20May21) - CIT resi the bright spot

CIT resi the bright spot, hotels reopening key catalyst; MINT acquires US$1.32bn US Data Centre; Luxury landed homes market on uptrend; SREIT no...

SCCM Asia Research

ASEAN Builder's Scoop (19May21) - PRIME robust operations metrics

PRIME robust operations metrics; CIT plans for GBP500m SREIT IPO; FIRT completes restructuring; Retail landlords roll out tenants support; China...

SCCM Asia Research

Ascendas REIT Placement - Smaller than the Last Deal, Should Be Accretive as Well

Ascendas Real Estate Investment Trust (AREIT SP) aims to raise around US$320m (S$430m) to acquire the balance 75% stake in Galaxis.

Sumeet Singh

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