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><a href="https://www.smartkarma.com/entities/dasin-retail-trust" target="_blank" data-smartkarma-citation="entities:23743" rel="noopener">Dasin Retail Trust (DASIN SP)</a> 2H21 DPU +10.9% YoY; All eyes remain on the hefty 2022 refinancing burden</li><li><a href="https://www.smartkarma.com/entities/bhg-retail-reit" target="_blank" data-smartkarma-citation="entities:21021" rel="noopener">BHG Retail REIT (BHGREIT SP)</a> 2H21 DPU -0.9% YoY; Steady as she goes with occupancy rates inching higher</li><li><a href="https://www.smartkarma.com/entities/ireit-global" target="_blank" data-smartkarma-citation="entities:10596" rel="noopener">IREIT Global (IREIT SP)</a> 2H21 DPU +7.9% YoY; Continued to trade ~25% below book value despite an attractive 7+% yield</li></ul>

Dasin Retail Trust (DASIN SP) 2H21 DPU +10.9% YoY; All eyes remain on the hefty 2022 refinancing burdenBHG Retail REIT (BHGREIT SP) 2H21 DPU -0.9% YoY; Steady as she goes with occupancy rates inching higherIREIT Global (IREIT SP) 2H21 DPU +7.9% YoY; Continued to trade ~25% below book value despite an attractive 7+% yield

ASEAN Builder's Scoop 28Feb22 - DASIN All Eyes on Mar22 Loan Refinancing

<ul><li><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> and <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> proposed merger to form Mapletree Pan Asia Commercial Trust (MPACT); DPU and NAV accretive to MCT unitholders</li><li>The transaction will be ~8.9% and ~6.5% of accretive to DPU and NAV, respectively, on a pro forma basis to MCT unitholders. As for MAGIC unitholders, total consideration is at an attractive premium over trading prices and implies a 1.0x P/NAV, translating into a 1-year total return of ~32.2%</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> acquires 50% interest in Sydney office building for ~S$410m; DPU accretive by ~1%</li></ul>

Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) proposed merger to form Mapletree Pan Asia Commercial Trust (MPACT); DPU and NAV accretive to MCT unitholdersThe transaction will be ~8.9% and ~6.5% of accretive to DPU and NAV, respectively, on a pro forma basis to MCT unitholders. As for MAGIC unitholders, total consideration is at an attractive premium over trading prices and implies a 1.0x P/NAV, translating into a 1-year total return of ~32.2%Capitaland Integrated Commercial Trust (CICT SP) acquires 50% interest in Sydney office building for ~S$410m; DPU accretive by ~1%

ASEAN Builder's Scoop (3Jan22) - MCT/MAGIC Merger

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

Lendlease Global Commercial REIT / Equity Bottom-Up

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-11/Capture.PNG' alt='Top performer SREIT and property' />
 </figure>
 <div class='content-caption'>Top performer SREIT and property</div>
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In the year to date, Singapore-listed Reits and property trusts averaged total returns of close to 11 per cent. The 10 best-performing trusts were mostly mid-caps, which averaged 32 per cent total returns and own assets across industrial, retail, healthcare, office and hospitality sub-segments.

Among the 10 best performers, seven were recent inclusions into the FTSE EPRA Nareit Global Developed Index following the September review. 
The five trusts which received the highest amount of net institutional inflows this year were mid-cap REITs (data as of 28 October): ARA LOGOS Logistics Trust (+S$79 million), OUE Commercial REIT (+S$39 million), Starhill Global REIT (+S$36 million), Lendlease Global Commercial REIT (+S$27 million) and ESR-REIT (+S$26 million). 
In the month of October, the sector averaged 3 per cent in total returns. Retail investors net bought the sector with net inflows of S$158 million while institutional investors net sold S$195 million (data as at Oct 28). 
Four of the top five performers over the month were trusts with exposure to the retail or hospitality segments - Dasin Retail Trust (21 per cent), CDL Hospitality Trusts (15 per cent), Ascott Residence Trust (11 per cent), Lippo Malls Indonesia Retail Trust (8 per cent) and Keppel REIT (7 per cent). Three of them reported before market opened last Friday. 
CDLHT reported year-on-year (yoy) growth of 34.8 per cent in net property income for Q3 2021 attributable to the ongoing recovery from negative effects of the pandemic, broader distribution of vaccines as well as easing of travel restrictions which resulted in more accommodation demand. 
LMIRT declared Q3 2021 distribution per unit (DPU) of 0.09 cents, up 28.6 per cent yoy. The trust's rental revenue and gross revenue for the period grew 16.2 per cent and 7.0 per cent yoy respectively, due to income from the newly acquired Lippo Mall Puri, which contributed S$8.2 million to rental revenue and S$10.3 million to gross revenue for the quarter.

Keppel Reit reported 20.8 per cent yoy growth in distributable income from operations for the nine months of 2021, due mainly to contributions from Victoria Police Centre in Melbourne, Pinnacle Office Park in Sydney and Keppel Bay Tower in Singapore. The Reit noted that despite the pandemic, portfolio leasing activities remained positive with new leases and expansions seen from diverse industry sectors.

Aside from the three trusts above, more than half of the 40 S-Reits have also released financial results or business updates, before market opened last Friday.

Most of the trusts reported financial and operating metrics which were in line with analysts' estimates, with some exceeding expectations.

Among the trusts that have reported, 14 of them declared DPUs for the latest quarter or half year period. These trusts, on average, saw a 20 per cent year-on-year growth in declared DPUs. Some reasons provided for the increase in DPUs across these trusts include new acquisitions which boosted revenues, lower rental rebates which reduced expense and gradual reopening across the globe. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/retail-and-hospitality-sector-s-reits-outperform-in-october"> read </a>the original version.
</body></html>


      
    
    Top performer SREIT and property


In the year to date, Singapore-listed Reits and property trusts averaged total returns of close to 11 per cent. The 10 best-performing trusts were mostly mid-caps, which averaged 32 per cent total returns and own assets across industrial, retail, healthcare, office and hospitality sub-segments.

Among the 10 best performers, seven were recent inclusions into the FTSE EPRA Nareit Global Developed Index following the September review.  
The five trusts which received the highest amount of net institutional inflows this year were mid-cap REITs (data as of 28 October): ARA LOGOS Logistics Trust (+S$79 million), OUE Commercial REIT (+S$39 million), Starhill Global REIT (+S$36 million), Lendlease Global Commercial REIT (+S$27 million) and ESR-REIT (+S$26 million).  
In the month of October, the sector averaged 3 per cent in total returns. Retail investors net bought the sector with net inflows of S$158 million while institutional investors net sold S$195 million (data as at Oct 28).  
Four of the top five performers over the month were trusts with exposure to the retail or hospitality segments - Dasin Retail Trust (21 per cent), CDL Hospitality Trusts (15 per cent), Ascott Residence Trust (11 per cent), Lippo Malls Indonesia Retail Trust (8 per cent) and Keppel REIT (7 per cent). Three of them reported before market opened last Friday.  
CDLHT reported year-on-year (yoy) growth of 34.8 per cent in net property income for Q3 2021 attributable to the ongoing recovery from negative effects of the pandemic, broader distribution of vaccines as well as easing of travel restrictions which resulted in more accommodation demand.  
LMIRT declared Q3 2021 distribution per unit (DPU) of 0.09 cents, up 28.6 per cent yoy. The trust's rental revenue and gross revenue for the period grew 16.2 per cent and 7.0 per cent yoy respectively, due to income from the newly acquired Lippo Mall Puri, which contributed S$8.2 million to rental revenue and S$10.3 million to gross revenue for the quarter.

Keppel Reit reported 20.8 per cent yoy growth in distributable income from operations for the nine months of 2021, due mainly to contributions from Victoria Police Centre in Melbourne, Pinnacle Office Park in Sydney and Keppel Bay Tower in Singapore. The Reit noted that despite the pandemic, portfolio leasing activities remained positive with new leases and expansions seen from diverse industry sectors.

Aside from the three trusts above, more than half of the 40 S-Reits have also released financial results or business updates, before market opened last Friday.

Most of the trusts reported financial and operating metrics which were in line with analysts' estimates, with some exceeding expectations.

Among the trusts that have reported, 14 of them declared DPUs for the latest quarter or half year period. These trusts, on average, saw a 20 per cent year-on-year growth in declared DPUs. Some reasons provided for the increase in DPUs across these trusts include new acquisitions which boosted revenues, lower rental rebates which reduced expense and gradual reopening across the globe.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Retail and hospitality sector S-Reits outperform in October

<h2>Singapore</h2>SREITs results in a glance (see detailed spreadsheet and calendar attached)<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/235/060/original/image_86658513151634177122386.png?1634177126" class="editor-image img-responsive" data-smartkarma-image-id="235060"></figure><h3><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> 2Q22 DPU +18.8% YoY; Strong operational metrics with additional inorganic growth booster</h3><ul><li>1H22 revenue and NPI rose by 13.0% and 19.4% YoY, respectively, to S$65.2m (47.2% BB est.) and S$47.7m (55.5% BB est.), mainly due to acquisition of 7 Bulim Street (acquired in Oct20) and higher rental contribution from 7 Bulim Street, 20 Gul Way, 8 &amp; 10 Pandan Crescent and 541 Yishun Industrial Park A (new master tenant commenced in Jan21)</li><li>1H22 DPU surged 18.8% YoY to S$4.75c (50.0% BB est.). 2Q22 DPU also surged 25.0% YoY and 11.1% QoQ to S$2.50c</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)AIMS APAC REIT (AAREIT SP) 2Q22 DPU +18.8% YoY; Strong operational metrics with additional inorganic growth booster1H22 revenue and NPI rose by 13.0% and 19.4% YoY, respectively, to S$65.2m (47.2% BB est.) and S$47.7m (55.5% BB est.), mainly due to acquisition of 7 Bulim Street (acquired in Oct20) and higher rental contribution from 7 Bulim Street, 20 Gul Way, 8 &amp; 10 Pandan Crescent and 541 Yishun Industrial Park A (new master tenant commenced in Jan21)1H22 DPU surged 18.8% YoY to S$4.75c (50.0% BB est.). 2Q22 DPU also surged 25.0% YoY and 11.1% QoQ to S$2.50c

<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: 136.65pt; height: 14.8pt;">
 
</td>
<td style="width: 136.6pt; height: 14.8pt;">
ECWREIT
</td>
<td style="width: 136.6pt; height: 14.8pt;">
DASIN
</td>
<td style="width: 136.6pt; height: 14.8pt;">
LREIT
</td>
<td style="width: 136.6pt; height: 14.8pt;">
IREIT (€)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 15.3pt;">
Period
</td>
<td style="width: 136.6pt; height: 15.3pt;">
2Q21
</td>
<td style="width: 136.6pt; height: 15.3pt;">
1H21
</td>
<td style="width: 136.6pt; height: 15.3pt;">
2H21
</td>
<td style="width: 136.6pt; height: 15.3pt;">
1H21
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 15.35pt;">
Gross Revenue (S$m)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
31.2 (10.6% YoY)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
51.3 (38.5% YoY)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
37 (+8.5%YoY)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
23.6 (+31.6% YoY)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
NPI (S$m)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
27.9 (8.1% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
38.2 (26.3% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
26.5 (+10% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
19.3 (+23.4% YoY)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
DPU (S$ c)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.532 (10.5% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
2.98 (55.2% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
2.34 (+32.8% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.43 (+14.4% YoY)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
NAV per Unit (S$)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.93
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.46
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.79
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.5
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
P/B (x)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.88
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.34
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.08
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.81
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Occupancy (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
99.1
</td>
<td style="width: 136.6pt; height: 14.8pt;">
95.7
</td>
<td style="width: 136.6pt; height: 14.8pt;">
99.8 (Overall portfolio)
99.2 (313@Somerset)
100 (Sky Complex)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
95.9 (Overall)
99.8 (Germany)
85.2 (Spanish)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 7.4pt;">
Reversion (%)
</td>
<td style="width: 136.6pt; height: 7.4pt;">
N/A
</td>
<td style="width: 136.6pt; height: 7.4pt;">
N/A
</td>
<td style="width: 136.6pt; height: 7.4pt;">
NA
</td>
<td style="width: 136.6pt; height: 7.4pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Gearing (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
37.6
</td>
<td style="width: 136.6pt; height: 14.8pt;">
36.7
</td>
<td style="width: 136.6pt; height: 14.8pt;">
32
</td>
<td style="width: 136.6pt; height: 14.8pt;">
33.3
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Cost of Debt (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
4.2
</td>
<td style="width: 136.6pt; height: 14.8pt;">
N/A
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.88
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.8
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
1 Yr Fwd Yield (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
7.36
</td>
<td style="width: 136.6pt; height: 14.8pt;">
9.59
</td>
<td style="width: 136.6pt; height: 14.8pt;">
5.78
</td>
<td style="width: 136.6pt; height: 14.8pt;">
6.67
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Debt Hedged (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
100% of offshore facilities
</td>
<td style="width: 136.6pt; height: 14.8pt;">
N/A
</td>
<td style="width: 136.6pt; height: 14.8pt;">
Not Disclosed
</td>
<td style="width: 136.6pt; height: 14.8pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Target Price
</td>
<td style="width: 136.6pt; height: 14.8pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 14.8pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 14.8pt;">
NA
</td>
<td style="width: 136.6pt; height: 14.8pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 15.3pt;">
Rating
</td>
<td style="width: 136.6pt; height: 15.3pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 15.3pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 15.3pt;">
NA
</td>
<td style="width: 136.6pt; height: 15.3pt;">
NA
</td>
</tr>
</tbody>
</table>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


ECWREIT


DASIN


LREIT


IREIT (€)




Period


2Q21


1H21


2H21


1H21




Gross Revenue (S$m)


31.2 (10.6% YoY)


51.3 (38.5% YoY)


37 (+8.5%YoY)


23.6 (+31.6% YoY)




NPI (S$m)


27.9 (8.1% YoY)


38.2 (26.3% YoY)


26.5 (+10% YoY)


19.3 (+23.4% YoY)




DPU (S$ c)


1.532 (10.5% YoY)


2.98 (55.2% YoY)


2.34 (+32.8% YoY)


1.43 (+14.4% YoY)




NAV per Unit (S$)


0.93


1.46


0.79


0.5




P/B (x)


0.88


0.34


1.08


0.81




Occupancy (%)


99.1


95.7


99.8 (Overall portfolio)
99.2 (313@Somerset)
100 (Sky Complex)


95.9 (Overall)
99.8 (Germany)
85.2 (Spanish)




Reversion (%)


N/A


N/A


NA


NA




Gearing (%)


37.6


36.7


32


33.3




Cost of Debt (%)


4.2


N/A


0.88


1.8




1 Yr Fwd Yield (%)


7.36


9.59


5.78


6.67




Debt Hedged (%)


100% of offshore facilities


N/A


Not Disclosed


NA




Target Price


Under Review


Under Review


NA


NA




Rating


Under Review


Under Review


NA


NA





ASEAN Builder's Scoop (10Aug21) - ECWREIT Steady as She Goes

Singapore

Dasin Retail Trust invests in, owns, and develops land and income-producing real estates. The Company operates in Singapore.

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Dasin Retail Trust (DASIN SP)

ASEAN Builder's Scoop 28Feb22 - DASIN All Eyes on Mar22 Loan Refinancing

BHGREIT steady as she goes; IREIT trading ~25% below book; AEW sells 55MS for S$3,450psf; CLD signs S$1.3bn Vietnam MOU; ELITE embarks on new AEI

SCCM Asia Research

ASEAN Builder's Scoop (3Jan22) - MCT/MAGIC Merger

MCT/MAGIC merger; CICT buys Sydney office; KDCREIT buys UK DC; ART buys more US dormitories; ECWREIT buyers backed out; DASIN loan extension; VLL...

SCCM Asia Research

REIT Watch - Retail and hospitality sector S-Reits outperform in October

In the year to date, Singapore-listed Reits and property trusts averaged total returns of close to 11 per cent. The 10...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (13Oct21)

AAREIT strong operational metrics with inorganic booster; DASIN completes manager sale; Ascott record signing in VN; AWC repositioning 3 mega projects

SCCM Asia Research

ASEAN Builder's Scoop (10Aug21) - ECWREIT Steady as She Goes

ECWREIT steady as she goes; DASIN boosted by acquisitions; LREIT robust occupancy levels; IREIT dual-currency trading; FPL well-positioned for...

SCCM Asia Research

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