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)

<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/000/238/848/original/image_287512276191635730663687.png?1635730667" class="editor-image img-responsive" data-smartkarma-image-id="238848"></figure><h3><a href="https://www.smartkarma.com/entities/elite-commercial-reit" target="_blank" data-smartkarma-citation="entities:28807" rel="noopener">Elite Commercial REIT (ELITE SP)</a> 3Q21 DPU +20.3% YoY; High-yielding GBP exposure with steady operating metrics</h3><ul><li>3Q21 revenue came in at GBP9.4m (+61.7% YoY; 60.4% higher than IPO projection), while NPI was undisclosed. Revenue was boosted by contributions from its maiden acquisitions. 9M21 revenue rose 67.2% YoY to GBP25.3m (75% of BB est.)</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Elite Commercial REIT (ELITE SP) 3Q21 DPU +20.3% YoY; High-yielding GBP exposure with steady operating metrics3Q21 revenue came in at GBP9.4m (+61.7% YoY; 60.4% higher than IPO projection), while NPI was undisclosed. Revenue was boosted by contributions from its maiden acquisitions. 9M21 revenue rose 67.2% YoY to GBP25.3m (75% of BB est.)

<h2>Singapore</h2><h3>New private home sales fell 24% MoM in Aug21; Take-up rate remains above 100% the past 3 months</h3><ul><li>Sales of new private homes fell last month after hitting a six-month high in Jul. Developers sold 1,215 units in Aug, down 24% MoM from 1,591 units in Jul21. On a YoY basis, sales were down 3.5% from 1,258 in Aug20. Including ECs sold, developers moved 1,322 new homes last month, 24.3% lower MoM than in Jul21 and 1% higher YoY from Aug20</li><li>Developers launched 836 units in Aug21, down 24.3% MoM from 1,104 units in Jul21, and plunging 47.2% YoY lower from 1,582 units in Aug20. There were no new ECs launched in Aug21. Aug21 take-up rate stood at 145% (from 144% in Jul21 and 107% in Jun20). The Watergardens at Canberra was the top seller last month, moving 267 units, or nearly 60% of its 487 units</li><li>Sales in Aug21 were driven by The Watergardens at Canberra, which sold 267 units, and Normanton Park, which sold 131 units. Excluding EC, sales volume in Aug21 was highest in OCR followed by RCR and CCR, respectively – 720 units (59.3%), 343 (28.2%) and 152 (12.5%), respectively.</li></ul>

SingaporeNew private home sales fell 24% MoM in Aug21; Take-up rate remains above 100% the past 3 monthsSales of new private homes fell last month after hitting a six-month high in Jul. Developers sold 1,215 units in Aug, down 24% MoM from 1,591 units in Jul21. On a YoY basis, sales were down 3.5% from 1,258 in Aug20. Including ECs sold, developers moved 1,322 new homes last month, 24.3% lower MoM than in Jul21 and 1% higher YoY from Aug20Developers launched 836 units in Aug21, down 24.3% MoM from 1,104 units in Jul21, and plunging 47.2% YoY lower from 1,582 units in Aug20. There were no new ECs launched in Aug21. Aug21 take-up rate stood at 145% (from 144% in Jul21 and 107% in Jun20). The Watergardens at Canberra was the top seller last month, moving 267 units, or nearly 60% of its 487 unitsSales in Aug21 were driven by The Watergardens at Canberra, which sold 267 units, and Normanton Park, which sold 131 units. Excluding EC, sales volume in Aug21 was highest in OCR followed by RCR and CCR, respectively – 720 units (59.3%), 343 (28.2%) and 152 (12.5%), respectively.

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55" rel="noopener">Capitaland (CAPL SP)</a> 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot</h3><ul><li>1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H20</li><li>1H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)</li><li>Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21</li><li>Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectively</li><li>Lodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management</li><li>1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and China</li><li>CAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.</li></ul>

SingaporeCapitaland (CAPL SP) 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H201H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectivelyLodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and ChinaCAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

<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; height: 14.35pt;"><p> </p></td><td style="width: 141.2pt; height: 14.35pt;"><p>PRIME</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>KORE</p></td></tr><tr><td style="width: 141.25pt; height: 14.85pt;"><p>Period</p></td><td style="width: 141.2pt; height: 14.85pt;"><p>1H21</p></td><td style="width: 141.2pt; height: 14.85pt;"><p>1H21</p></td></tr><tr><td style="width: 141.25pt; height: 14.9pt;"><p>Gross Revenue (S$m)</p></td><td style="width: 141.2pt; height: 14.9pt;"><p>72.1 (+1.2% YoY)</p></td><td style="width: 141.2pt; height: 14.9pt;"><p>68.38 (-3% YoY)</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>NPI (S$m)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>46.3 (-2.3% YoY)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>40.58 (-3.1% YoY)</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>DPU (S$ c)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>3.33 (-5.4% YoY)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>3.16 (+1.9% YoY)</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>NAV per Unit (S$)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>0.86</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>0.82</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>P/B (x)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>0.98</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>0.95</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>Occupancy (%)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>91.7</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>90.5</p></td></tr><tr><td style="width: 141.25pt; height: 7.2pt;"><p>Reversion (%)</p></td><td style="width: 141.2pt; height: 7.2pt;"><p>10.5</p></td><td style="width: 141.2pt; height: 7.2pt;"><p>5.4</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>Gearing (%)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>34.4</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>37.1</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>Cost of Debt (%)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>3.2</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>2.82</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>1 Yr Fwd Yield (%)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>8.45</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>7.77</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>Debt Hedged (%)</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>86%</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>84.7</p></td></tr><tr><td style="width: 141.25pt; height: 14.35pt;"><p>Target Price</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>N/A</p></td><td style="width: 141.2pt; height: 14.35pt;"><p>N/A</p></td></tr><tr><td style="width: 141.25pt; height: 14.85pt;"><p>Rating</p></td><td style="width: 141.2pt; height: 14.85pt;"><p>N/A</p></td><td style="width: 141.2pt; height: 14.85pt;"><p>N/A</p></td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) PRIMEKOREPeriod1H211H21Gross Revenue (S$m)72.1 (+1.2% YoY)68.38 (-3% YoY)NPI (S$m)46.3 (-2.3% YoY)40.58 (-3.1% YoY)DPU (S$ c)3.33 (-5.4% YoY)3.16 (+1.9% YoY)NAV per Unit (S$)0.860.82P/B (x)0.980.95Occupancy (%)91.790.5Reversion (%)10.55.4Gearing (%)34.437.1Cost of Debt (%)3.22.821 Yr Fwd Yield (%)8.457.77Debt Hedged (%)86%84.7Target PriceN/AN/ARatingN/AN/A

ASEAN Builder's Scoop (04Aug21) - PRIME High Opex Offset Robust Reversions

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889" rel="noopener">Cromwell European REIT (CERT SP)</a> divests a non-core asset in France at 21% premium to latest valuation</h3><ul><li>CERT has entered into a promissory deed with an affiliate of one of Europe’s leading boutique real estate investment funds, to divest the Parc de Popey asset located at 5 Chemin de Popey in Bar-le-Duc, France. The French Asset consists of a single large warehouse building with ancillary office accommodation totalling 15,724sqm, built in 1995. Currently occupied by a major postal service and logistics company, which is largely owned by the French government, the asset is used as an industrial sorting parcel platform</li><li>CERT will sell the French Asset for a sale consideration of EUR5.8m (~S$9.3m), which would be satisfied fully in cash. It is 53% higher than the IPO purchase price and 21% higher than its most recent valuation. A divestment fee of EUR29,000 (being 0.5% of the sale consideration) is payable to the Manager. The divestment is expected to be completed in 3Q21 and has no material effect on CERT’s NTA.</li></ul>

SingaporeCromwell European REIT (CERT SP) divests a non-core asset in France at 21% premium to latest valuationCERT has entered into a promissory deed with an affiliate of one of Europe’s leading boutique real estate investment funds, to divest the Parc de Popey asset located at 5 Chemin de Popey in Bar-le-Duc, France. The French Asset consists of a single large warehouse building with ancillary office accommodation totalling 15,724sqm, built in 1995. Currently occupied by a major postal service and logistics company, which is largely owned by the French government, the asset is used as an industrial sorting parcel platformCERT will sell the French Asset for a sale consideration of EUR5.8m (~S$9.3m), which would be satisfied fully in cash. It is 53% higher than the IPO purchase price and 21% higher than its most recent valuation. A divestment fee of EUR29,000 (being 0.5% of the sale consideration) is payable to the Manager. The divestment is expected to be completed in 3Q21 and has no material effect on CERT’s NTA.

ASEAN Builder's Scoop (22Jun21) - CERT Divests a Non-Core France Asset

Singapore

Cromwell Real Estate Investment Trust is a real estate investment trust with a commercial portfolio of offices and light industrial /  logistics assets across Europe.

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Cromwell European REIT (CERT SP)

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SCCM Asia Research

ASEAN Builder's Scoop (04Aug21) - PRIME High Opex Offset Robust Reversions

PRIME high opex offset robust reversions; CERT maiden UK logistics acq; OUE 1H21 earnings reversed from a loss; ALI 1H21 NI +34% YoY on low base,...

SCCM Asia Research

ASEAN Builder's Scoop (22Jun21) - CERT Divests a Non-Core France Asset

CERT divests a non-core France asset; CBD Grade-A office rents reversing up in 2Q21; China REITs solid IPO debut; MEG sees resi sales uptick; HVN...

SCCM Asia Research

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