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>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 136.6pt;">
 
</td>
<td style="width: 136.55pt;">
DASIN
</td>
<td style="width: 136.55pt;">
SASSR
</td>
<td style="width: 136.55pt;">
BHGREIT
</td>
<td style="width: 136.55pt;">
CLCT
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Period
</td>
<td style="width: 136.55pt;">
1Q21
</td>
<td style="width: 136.55pt;">
1Q21
</td>
<td style="width: 136.55pt;">
1Q21
</td>
<td style="width: 136.55pt;">
1Q21
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Gross Revenue (S$ m)
</td>
<td style="width: 136.55pt;">
Not Disclosed in SGD terms; RMB127.3m (+87.4% YoY); or RMB101.6m if w/o Shunde Metro Mall and Tanbei Metro Mall (+51.0% YoY)
</td>
<td style="width: 136.55pt;">
EMA Rental Income: 34.1 (+23.4% YoY)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
NPI (S$ m)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
264.2 (RMB)
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
DPU (S$ c)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
1.759 (+31.9% YoY)
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
NAV per Unit (S$)
</td>
<td style="width: 136.55pt;">
1.41 (Based on 4Q20)
</td>
<td style="width: 136.55pt;">
0.922
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
P/B (x)
</td>
<td style="width: 136.55pt;">
0.510
</td>
<td style="width: 136.55pt;">
1.00
</td>
<td style="width: 136.55pt;">
0.64 (Based on 4Q20 NAV)
</td>
<td style="width: 136.55pt;">
0.94 (Based on 4Q20 NAV)
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Occupancy (%)
</td>
<td style="width: 136.55pt;">
96.1
</td>
<td style="width: 136.55pt;">
93.5
</td>
<td style="width: 136.55pt;">
92.1
</td>
<td style="width: 136.55pt;">
Retail: 94.4 Business Parks: 92.1
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Reversion (%)
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Gearing (%)
</td>
<td style="width: 136.55pt;">
37.2
</td>
<td style="width: 136.55pt;">
27.6
</td>
<td style="width: 136.55pt;">
35.6
</td>
<td style="width: 136.55pt;">
35.1
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Cost of Debt (%)
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
3.3
</td>
<td style="width: 136.55pt;">
3.8
</td>
<td style="width: 136.55pt;">
2.51
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
1 Yr Fwd Yield (%)
</td>
<td style="width: 136.55pt;">
6.99
</td>
<td style="width: 136.55pt;">
7.46
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
6.21
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Debt Hedged (%)
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
Not Disclosed
</td>
<td style="width: 136.55pt;">
60% of offshore loans
</td>
<td style="width: 136.55pt;">
~70
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Target Price
</td>
<td style="width: 136.55pt;">
S$0.81
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.6pt;">
Rating
</td>
<td style="width: 136.55pt;">
BUY
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
<td style="width: 136.55pt;">
NA
</td>
</tr>
</tbody>
</table>
<h3>
<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> 1Q21 Business Updates – Revenue recovered to 94% of pre-Covid level; ARA’s strategic stake underscores GBA’s potential</h3>
<ul>
<li>1Q21 revenue (in RMB terms; on same-mall basis) increased 51.0% YoY to ~RMB101.6m. Total revenues of the four malls (IPO portfolio), namely Shiqi Metro Mall, Xiaolan Metro Mall, Ocean Metro Mall and Dasin E-Colour, has recovered to 94% of 1Q19 (pre-pandemic)’s level. Including Shunde Metro Mall and Tanbei Metro Mall (8Jul20), 1Q21 revenue (in RMB terms) increased 87.4% YoY to ~RMB127.3m</li>
<li>Overall portfolio committed occupancy stabilized at 96.1% (vs. 96.5% in 4Q20 and 96.1% in 3Q20). ~9,085sqm (12.7% of total Ocean Metro Mall NLA) of “furniture and finishing” space at the mall has been reconfigured in 4Q20 into a children’s education area, which brought a positive rental reversion of ~46%. Portfolio WALE stood at 5.9 years by NLA and 3.6 years by GRI. ~31.1% of GRI will be due for renewal in FY21E</li>
<li>Portfolio gearing stands at 37.2% (vs. 37.8% in 4Q20 and 38.5% in 3Q20). DASIN is currently negotiating with banks for extension of loans amounting to S$235.2m, which are due on 18Jul21</li>
<li>Mr. Zhang Zhencheng, Chairman and controlling shareholder of the Trustee-Manager, as well as Aqua Wealth Holdings Limited (a controlling unitholder of the Trust), had entered into a sale and purchase agreement with ARA DSRT (Holdings) and ARA Real Estate Investors 22 in pursuance of a strategic partnership with ARA Asset Management. ARA will acquire 50% of interest in the Trustee-Manager from Mr. Zhang Zhencheng, as well as ~5.0% of interest in DASIN from Aqua Wealth Holdings Limited in two separate tranches. The sale of 50% stake in Trustee-Manager and first tranche of DASIN’s units (2.5% stake) is expected to complete by May21</li>
<li>DASIN currently trades at 7.0% FY21E yield and 0.51x P/B.</li>
</ul>
Comments: 1Q21 Revenue forms 23.6% of our full-year FY21E revenue (based on avg. 1Q21 RMB/SGD of 4.8727). We are encouraged by Dasin E-Colour’s strong revenue recovery (to near pre-Covid level) despite a challenging occupancy profile of 86.5% (vs. portfolio average of 96.1% and 1Q20’s 91.9%), thus translating to a robust passing rent at ~RMB125.6psm pm with +107% YoY reversions. Meanwhile, its 2 mature assets, namely Shiqi Metro Mall and Xiaolan Metro Mall (contributed to ~45.6% of 1Q21 revenue), appear to be on track for a sustained recovery – upticks in both occupancy rates and passing rents. The two newly acquired Shunde Metro Mall and Tanbei Metro Mall should provide inorganic boost to with its full-year contributions (vs. 6 mths contributions in FY20). Notwithstanding a challenging leasing market (portfolio occupancy remains below pre-Covid level of 97-98%), DASIN’s lease structure with high fixed components (fixed rent and fixed rent with built-in escalation) at 82.8%% of Mar21 GRI, offer income stability somewhat. We have a BUY rating with TP of S$0.81/Unit for DASIN.
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/207/030/original/image021.png?1621332221" class="editor-image img-responsive" data-smartkarma-image-id="207030"></figure>
</section>

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




 


DASIN


SASSR


BHGREIT


CLCT




Period


1Q21


1Q21


1Q21


1Q21




Gross Revenue (S$ m)


Not Disclosed in SGD terms; RMB127.3m (+87.4% YoY); or RMB101.6m if w/o Shunde Metro Mall and Tanbei Metro Mall (+51.0% YoY)


EMA Rental Income: 34.1 (+23.4% YoY)


Not Disclosed


Not Disclosed




NPI (S$ m)


Not Disclosed


EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)


Not Disclosed


264.2 (RMB)




DPU (S$ c)


Not Disclosed


1.759 (+31.9% YoY)


Not Disclosed


Not Disclosed




NAV per Unit (S$)


1.41 (Based on 4Q20)


0.922


Not Disclosed


Not Disclosed




P/B (x)


0.510


1.00


0.64 (Based on 4Q20 NAV)


0.94 (Based on 4Q20 NAV)




Occupancy (%)


96.1


93.5


92.1


Retail: 94.4 Business Parks: 92.1




Reversion (%)


NA


Not Disclosed


Not Disclosed


Not Disclosed




Gearing (%)


37.2


27.6


35.6


35.1




Cost of Debt (%)


NA


3.3


3.8


2.51




1 Yr Fwd Yield (%)


6.99


7.46


NA


6.21




Debt Hedged (%)


NA


Not Disclosed


60% of offshore loans


~70




Target Price


S$0.81


NA


NA


NA




Rating


BUY


NA


NA


NA





Dasin Retail Trust (DASIN SP) 1Q21 Business Updates – Revenue recovered to 94% of pre-Covid level; ARA’s strategic stake underscores GBA’s potential

1Q21 revenue (in RMB terms; on same-mall basis) increased 51.0% YoY to ~RMB101.6m. Total revenues of the four malls (IPO portfolio), namely Shiqi Metro Mall, Xiaolan Metro Mall, Ocean Metro Mall and Dasin E-Colour, has recovered to 94% of 1Q19 (pre-pandemic)’s level. Including Shunde Metro Mall and Tanbei Metro Mall (8Jul20), 1Q21 revenue (in RMB terms) increased 87.4% YoY to ~RMB127.3m
Overall portfolio committed occupancy stabilized at 96.1% (vs. 96.5% in 4Q20 and 96.1% in 3Q20). ~9,085sqm (12.7% of total Ocean Metro Mall NLA) of “furniture and finishing” space at the mall has been reconfigured in 4Q20 into a children’s education area, which brought a positive rental reversion of ~46%. Portfolio WALE stood at 5.9 years by NLA and 3.6 years by GRI. ~31.1% of GRI will be due for renewal in FY21E
Portfolio gearing stands at 37.2% (vs. 37.8% in 4Q20 and 38.5% in 3Q20). DASIN is currently negotiating with banks for extension of loans amounting to S$235.2m, which are due on 18Jul21
Mr. Zhang Zhencheng, Chairman and controlling shareholder of the Trustee-Manager, as well as Aqua Wealth Holdings Limited (a controlling unitholder of the Trust), had entered into a sale and purchase agreement with ARA DSRT (Holdings) and ARA Real Estate Investors 22 in pursuance of a strategic partnership with ARA Asset Management. ARA will acquire 50% of interest in the Trustee-Manager from Mr. Zhang Zhencheng, as well as ~5.0% of interest in DASIN from Aqua Wealth Holdings Limited in two separate tranches. The sale of 50% stake in Trustee-Manager and first tranche of DASIN’s units (2.5% stake) is expected to complete by May21
DASIN currently trades at 7.0% FY21E yield and 0.51x P/B.

Comments: 1Q21 Revenue forms 23.6% of our full-year FY21E revenue (based on avg. 1Q21 RMB/SGD of 4.8727). We are encouraged by Dasin E-Colour’s strong revenue recovery (to near pre-Covid level) despite a challenging occupancy profile of 86.5% (vs. portfolio average of 96.1% and 1Q20’s 91.9%), thus translating to a robust passing rent at ~RMB125.6psm pm with +107% YoY reversions. Meanwhile, its 2 mature assets, namely Shiqi Metro Mall and Xiaolan Metro Mall (contributed to ~45.6% of 1Q21 revenue), appear to be on track for a sustained recovery – upticks in both occupancy rates and passing rents. The two newly acquired Shunde Metro Mall and Tanbei Metro Mall should provide inorganic boost to with its full-year contributions (vs. 6 mths contributions in FY20). Notwithstanding a challenging leasing market (portfolio occupancy remains below pre-Covid level of 97-98%), DASIN’s lease structure with high fixed components (fixed rent and fixed rent with built-in escalation) at 82.8%% of Mar21 GRI, offer income stability somewhat. We have a BUY rating with TP of S$0.81/Unit for DASIN.




ASEAN Builder's Scoop (18May21) - DASIN strategic investment from ARA

<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: 162.6pt;"> </td><td style="width: 162.5pt;">ECWREIT</td><td style="width: 162.5pt;">SASSR</td><td style="width: 162.5pt;">BHGREIT</td></tr><tr><td style="width: 162.6pt;">Period</td><td style="width: 162.5pt;">1Q21</td><td style="width: 162.5pt;">1Q21</td><td style="width: 162.5pt;">1Q21</td></tr><tr><td style="width: 162.6pt;">Gross Revenue (S$ m)</td><td style="width: 162.5pt;">30.8 (+30.9% YoY)</td><td style="width: 162.5pt;">EMA Rental Income: 34.1 (+23.4% YoY)</td><td style="width: 162.5pt;">Not Disclosed</td></tr><tr><td style="width: 162.6pt;">NPI (S$ m)</td><td style="width: 162.5pt;">27.7 (+30.9% YoY)</td><td style="width: 162.5pt;">EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)</td><td style="width: 162.5pt;">Not Disclosed</td></tr><tr><td style="width: 162.6pt;">DPU (S$ c)</td><td style="width: 162.5pt;">1.53</td><td style="width: 162.5pt;">1.759 (+31.9% YoY)</td><td style="width: 162.5pt;">Not Disclosed</td></tr><tr><td style="width: 162.6pt;">NAV per Unit (S$)</td><td style="width: 162.5pt;">0.91</td><td style="width: 162.5pt;">0.922</td><td style="width: 162.5pt;">Not Disclosed</td></tr><tr><td style="width: 162.6pt;">P/B (x)</td><td style="width: 162.5pt;">0.81</td><td style="width: 162.5pt;">1.00</td><td style="width: 162.5pt;">0.64(Based on 4Q20 NAV)</td></tr><tr><td style="width: 162.6pt;">Occupancy (%)</td><td style="width: 162.5pt;"> 99.1</td><td style="width: 162.5pt;">93.5</td><td style="width: 162.5pt;">92.1</td></tr><tr><td style="width: 162.6pt;">Reversion (%)</td><td style="width: 162.5pt;"> NA</td><td style="width: 162.5pt;">Not Disclosed</td><td style="width: 162.5pt;">Not Disclosed</td></tr><tr><td style="width: 162.6pt;">Gearing (%)</td><td style="width: 162.5pt;">38.3</td><td style="width: 162.5pt;">27.6</td><td style="width: 162.5pt;">35.6</td></tr><tr><td style="width: 162.6pt;">Cost of Debt (%)</td><td style="width: 162.5pt;">4.1</td><td style="width: 162.5pt;">3.3</td><td style="width: 162.5pt;">3.8</td></tr><tr><td style="width: 162.6pt;">1 Yr Fwd Yield (%)</td><td style="width: 162.5pt;">7.76</td><td style="width: 162.5pt;">7.46</td><td style="width: 162.5pt;">NA</td></tr><tr><td style="width: 162.6pt;">Debt Hedged (%)</td><td style="width: 162.5pt;">100% of offshore facilities</td><td style="width: 162.5pt;">Not Disclosed</td><td style="width: 162.5pt;">60% of offshore loans</td></tr><tr><td style="width: 162.6pt;">Target Price</td><td style="width: 162.5pt;">Under Review</td><td style="width: 162.5pt;">NA</td><td style="width: 162.5pt;">NA</td></tr><tr><td style="width: 162.6pt;">Rating</td><td style="width: 162.5pt;">Under Review</td><td style="width: 162.5pt;">NA</td><td style="width: 162.5pt;">NA</td></tr></tbody></table><h3><a href="https://www.smartkarma.com/entities/ec-world-reit" target="_blank" data-smartkarma-citation="entities:22842" rel="noopener">EC World Reit (ECWREIT SP)</a> 1Q21 DPU +32.3% YoY; Robust growth but DI retention persist with retained DI snowballing to S$5.49m</h3><ul><li>Both revenue and NPI grew by 30.9% YoY in 1Q21 to S$30.8m (26.9% BB est.) and S$27.7m (28.1% BB est.), respectively, mainly due to absence of rental rebates in 1Q20 and strengthening of RMB. In RMB terms, gross revenue and NPI were 26.0% and 26.1% YoY higher, respectively</li><li>1Q21 DPU increased 32.3% YoY or 7.4% QoQ to S$1.532c (26.9% BB est.), mainly due to absence of rental rebates given. ECWREIT continued to retain 10% of DI in 1Q21 (vs. 10% in 4Q20 and 5% in 1Q20) on a conservative view of uncertainties arising from prolonged COVID-19 pandemic globally and for general working capital purpose</li><li>ECWREIT has secured renewal of major lease at Hengde Logistics, extending WALE to 3.2 years (by GRI) from 3.1 years as at 31Mar21. ~11.8% of GRI will be due for renewal for the remaining of FY21E</li><li>Portfolio occupancy remains robust at 99.1% (vs. 99.3% in 4Q20 and 96.7% in 3Q20)</li><li>On 30Apr, ECWREIT announced an incident of a displacement and collapse of a berth at Chongxian Port Investment that resulted in the damage of two gantry cranes located within the vicinity of the berth. Due to the location of the damaged area, the operations at the damaged berth and the 2 adjacent berths have been suspended. The rest of the port operation is not affected. The cause of the incident is still being investigated. ECWREIT is working closely with the insurer to assess the quantum of revenue loss and property damage recoverable by insurance claims</li><li>Portfolio gearing stands at 38.3% (vs. 38.1% in 4Q20 and 38.6% in 1Q20) with average cost of debt of 4.1% pa. (vs. 4.2% in 4Q20 and 4.3% in 1Q20) and 100% of offshore facilities hedged</li><li>ECWREIT currently trades at 7.76% FY21E yield and 0.81x P/B.</li></ul>Comments: 1Q21 revenue and NPI came in at 26.5% and 26.0% of our full-year FY21E estimates, respectively. Meanwhile, 1Q21 DPU came in at 27.5% of FY21E estimates. Note that we have assumed a 10% DI retention for FY21E, the higher than expected 1Q21 DPU was due to a lower 1Q21 tax rate at 24.7% (vs. our projected 38.0%). Including 1Q21’s S$1.38m, total retained DI since 1Q20 has amounted to S$5.49m (or S$0.681c per Unit). Port Logistics had done well in 1Q21, with revenue increasing 40.4% YoY to S$12.7m, and NPI increasing 41.8% YoY to S$11.9m (NPI margin +0.9pp. YoY to 93.5%). E-commerce Logistics has also recorded a strong 1Q21 growth, with revenue and NPI rising 32.4% and 30.9% YoY to S$14.7m and S$12.7m, respectively (NPI margin -1.0% to 86.5%). On the other hand, Specialised Logistics was muted in 1Q21, with Revenue and NPI flattish YoY at S$3.4m and S$3.1m, respectively (NPI margin +0.7pp. to 90.7%). While insurance claims could offset the revenue loss and restoration costs somewhat, we are cognizant that Chongxian Port Investment contributed to ~27% and ~28% of FY20 Revenue and NPI, respectively. We are currently reviewing our recommendations for ECWREIT.

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) ECWREITSASSRBHGREITPeriod1Q211Q211Q21Gross Revenue (S$ m)30.8 (+30.9% YoY)EMA Rental Income: 34.1 (+23.4% YoY)Not DisclosedNPI (S$ m)27.7 (+30.9% YoY)EMA Rental Income (Excluding straight-line adjustments): 32.3 (+27.8% YoY)Not DisclosedDPU (S$ c)1.531.759 (+31.9% YoY)Not DisclosedNAV per Unit (S$)0.910.922Not DisclosedP/B (x)0.811.000.64(Based on 4Q20 NAV)Occupancy (%) 99.193.592.1Reversion (%) NANot DisclosedNot DisclosedGearing (%)38.327.635.6Cost of Debt (%)4.13.33.81 Yr Fwd Yield (%)7.767.46NADebt Hedged (%)100% of offshore facilitiesNot Disclosed60% of offshore loansTarget PriceUnder ReviewNANARatingUnder ReviewNANAEC World Reit (ECWREIT SP) 1Q21 DPU +32.3% YoY; Robust growth but DI retention persist with retained DI snowballing to S$5.49mBoth revenue and NPI grew by 30.9% YoY in 1Q21 to S$30.8m (26.9% BB est.) and S$27.7m (28.1% BB est.), respectively, mainly due to absence of rental rebates in 1Q20 and strengthening of RMB. In RMB terms, gross revenue and NPI were 26.0% and 26.1% YoY higher, respectively1Q21 DPU increased 32.3% YoY or 7.4% QoQ to S$1.532c (26.9% BB est.), mainly due to absence of rental rebates given. ECWREIT continued to retain 10% of DI in 1Q21 (vs. 10% in 4Q20 and 5% in 1Q20) on a conservative view of uncertainties arising from prolonged COVID-19 pandemic globally and for general working capital purposeECWREIT has secured renewal of major lease at Hengde Logistics, extending WALE to 3.2 years (by GRI) from 3.1 years as at 31Mar21. ~11.8% of GRI will be due for renewal for the remaining of FY21EPortfolio occupancy remains robust at 99.1% (vs. 99.3% in 4Q20 and 96.7% in 3Q20)On 30Apr, ECWREIT announced an incident of a displacement and collapse of a berth at Chongxian Port Investment that resulted in the damage of two gantry cranes located within the vicinity of the berth. Due to the location of the damaged area, the operations at the damaged berth and the 2 adjacent berths have been suspended. The rest of the port operation is not affected. The cause of the incident is still being investigated. ECWREIT is working closely with the insurer to assess the quantum of revenue loss and property damage recoverable by insurance claimsPortfolio gearing stands at 38.3% (vs. 38.1% in 4Q20 and 38.6% in 1Q20) with average cost of debt of 4.1% pa. (vs. 4.2% in 4Q20 and 4.3% in 1Q20) and 100% of offshore facilities hedgedECWREIT currently trades at 7.76% FY21E yield and 0.81x P/B.Comments: 1Q21 revenue and NPI came in at 26.5% and 26.0% of our full-year FY21E estimates, respectively. Meanwhile, 1Q21 DPU came in at 27.5% of FY21E estimates. Note that we have assumed a 10% DI retention for FY21E, the higher than expected 1Q21 DPU was due to a lower 1Q21 tax rate at 24.7% (vs. our projected 38.0%). Including 1Q21’s S$1.38m, total retained DI since 1Q20 has amounted to S$5.49m (or S$0.681c per Unit). Port Logistics had done well in 1Q21, with revenue increasing 40.4% YoY to S$12.7m, and NPI increasing 41.8% YoY to S$11.9m (NPI margin +0.9pp. YoY to 93.5%). E-commerce Logistics has also recorded a strong 1Q21 growth, with revenue and NPI rising 32.4% and 30.9% YoY to S$14.7m and S$12.7m, respectively (NPI margin -1.0% to 86.5%). On the other hand, Specialised Logistics was muted in 1Q21, with Revenue and NPI flattish YoY at S$3.4m and S$3.1m, respectively (NPI margin +0.7pp. to 90.7%). While insurance claims could offset the revenue loss and restoration costs somewhat, we are cognizant that Chongxian Port Investment contributed to ~27% and ~28% of FY20 Revenue and NPI, respectively. We are currently reviewing our recommendations for ECWREIT.

ASEAN Builder's Scoop (12May21) - ECWREIT strong growth despite retention

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/ec-world-reit" target="_blank" data-smartkarma-citation="entities:22842" rel="noopener">EC World Reit (ECWREIT SP)</a> renews second major lease in Hengde Logistics (BUY; TP S$0.80/unit)</h3>ECWREIT has renewed a second major lease of some 74,057sqm in relation to Hengde Logistics with China Tobacco Zhejiang Industrial. The second major lease (Phase 2 renewal) came after a successful renewal of 152,752sqm of space in Oct20 (Phase 1 renewal). During the Phase 2 renewal, China Tobacco committed to a lease term of 2.65 years to coincide with the expiry of the Phase 1 renewal. Both leases with China Tobacco will expire on 31Dec23. Although the renewal rental rate contracted for the Phase 2 renewal is 8.8% lower than the existing rental rate, the effective blended rental rate of Phase 1 renewal and Phase 2 renewal is 2.2% lower than the effective blended rental rate of the expiring China Tobacco leases at Hengde Logistics Phase 1 and Phase 2. Similar to the Phase 1 Renewal, China Tobacco informed that they will no longer require the warehouse management services for the Phase 2 Renewal due to their internal restructuring. ECWREIT expects the Phase 2 Renewal to reduce ECWREIT’s revenue by 0.8%.Comments: The Phase 2 renewal rate at -8.8% came as a surprise with a high single-digit negative reversion, compared the positive reversion of +1.1% in its Phase 1 renewal. This also deviates from mgmt.’s earlier guidance of “similar renewal terms as Phase 1”, which we expect should be “flattish”. While pending further information on the rationale behind such renewal, on a “all-in” basis, we expect a ~3% decrease from FY20 Gross Revenue following its two renewals. We currently have a BUY rating and TP of S$0.80/unit, and will review our recommendations upon results release tomorrow.<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> Dallas hotel sale falls through after missed deposit deadline</h3>EAGLEHT will not be going ahead with the planned sale of its property in Texas, as the buyer missed the deadline for a deposit. The sale and purchase agreement for Crowne Plaza Dallas Near Galleria-Addison (CPDG) was thus terminated on 4May. EAGLEHT’s wholly-owned subsidiary will hold on to initial deposits of US$1.45m in the aborted US$18.5m deal with buyer Lockwood Development Partners. Numerous EHT entities had filed for Chapter 11 bankruptcy in a Delaware court in 2021. But CPDG is not directly owned by a Chapter 11 entity, so it does not enjoy bankruptcy protection under Section 363 of the United States Bankruptcy Code. Amid the Chapter 11 entities’ limited ability to support CPDG, the decision was made to sell off CPDG, in the face of potential difficulty fetching a higher price in an auction, and the risk that a lender would foreclose on the property after mortgage loan defaults. But the EAGLEHT unit involved in the sale axed the agreement as the buyer did not meet the 3May deadline for an extra deposit of US$1.05m.<h3>One Bernam records 80 units sales (23% take-up rate) on its opening weekend</h3>MCC Group and Hao Yuan Investment said that over 80 units or 80% of the first phase of 100 units released at their JV project, One Bernam, were sold. This means ~23% out of a total of the 351units in the 99-year leasehold, mixed-use development, has been sold at ~S$2,650psf ASP. More than 90% of the units that were taken up were one- and two-bedroom units sized from 441-872sqft, priced upwards of S$1.017m. Most of the buyers are said to be Singapore citizens and Permanent Residents. In addition to the 351 residential units, One Bernam contains a two-storey retail podium of 15,726sqft, and one floor of serviced apartments with 13 keys. While one- and two-bedroom units make up 91% of the residences in the project, there are 29 three-bedroom apartments of 1,421sqft. There are also two units of three-bedroom penthouses with sizes of 1,744-1,948sqft, while the largest penthouse is 4,306sqft in size and contains five bedrooms. <h3>Biggest penthouse at Park Nova sold at S$5,838psf, a record for Orchard Boulevard area</h3>Park Nova, Shun Tak Holdings’ luxury condo in Singapore’s Orchard Boulevard-Tomlinson area, has recorded five units sales for well over $100m. The two biggest five-bedroom penthouses in the 54-unit luxury condo at 18 Tomlinson Road fetched S$34.438m and S$26.026m, respectively. The biggest penthouse of 5,899sqft garnered interest from more than one party and almost had to be sold via balloting. However, one party prevailed and emerged the eventual buyer at S$34.438m or S$5,838psf. The transaction price of S$26.026m for the second biggest penthouse of 4,499sqft, worked out to S$5,785psf. The third and smallest penthouse of 3,229sqft is also believed to have been sold for above S$17m.

SingaporeEC World Reit (ECWREIT SP) renews second major lease in Hengde Logistics (BUY; TP S$0.80/unit)ECWREIT has renewed a second major lease of some 74,057sqm in relation to Hengde Logistics with China Tobacco Zhejiang Industrial. The second major lease (Phase 2 renewal) came after a successful renewal of 152,752sqm of space in Oct20 (Phase 1 renewal). During the Phase 2 renewal, China Tobacco committed to a lease term of 2.65 years to coincide with the expiry of the Phase 1 renewal. Both leases with China Tobacco will expire on 31Dec23. Although the renewal rental rate contracted for the Phase 2 renewal is 8.8% lower than the existing rental rate, the effective blended rental rate of Phase 1 renewal and Phase 2 renewal is 2.2% lower than the effective blended rental rate of the expiring China Tobacco leases at Hengde Logistics Phase 1 and Phase 2. Similar to the Phase 1 Renewal, China Tobacco informed that they will no longer require the warehouse management services for the Phase 2 Renewal due to their internal restructuring. ECWREIT expects the Phase 2 Renewal to reduce ECWREIT’s revenue by 0.8%.Comments: The Phase 2 renewal rate at -8.8% came as a surprise with a high single-digit negative reversion, compared the positive reversion of +1.1% in its Phase 1 renewal. This also deviates from mgmt.’s earlier guidance of “similar renewal terms as Phase 1”, which we expect should be “flattish”. While pending further information on the rationale behind such renewal, on a “all-in” basis, we expect a ~3% decrease from FY20 Gross Revenue following its two renewals. We currently have a BUY rating and TP of S$0.80/unit, and will review our recommendations upon results release tomorrow.Eagle Hospitality Trust (EAGLEHT SP) Dallas hotel sale falls through after missed deposit deadlineEAGLEHT will not be going ahead with the planned sale of its property in Texas, as the buyer missed the deadline for a deposit. The sale and purchase agreement for Crowne Plaza Dallas Near Galleria-Addison (CPDG) was thus terminated on 4May. EAGLEHT’s wholly-owned subsidiary will hold on to initial deposits of US$1.45m in the aborted US$18.5m deal with buyer Lockwood Development Partners. Numerous EHT entities had filed for Chapter 11 bankruptcy in a Delaware court in 2021. But CPDG is not directly owned by a Chapter 11 entity, so it does not enjoy bankruptcy protection under Section 363 of the United States Bankruptcy Code. Amid the Chapter 11 entities’ limited ability to support CPDG, the decision was made to sell off CPDG, in the face of potential difficulty fetching a higher price in an auction, and the risk that a lender would foreclose on the property after mortgage loan defaults. But the EAGLEHT unit involved in the sale axed the agreement as the buyer did not meet the 3May deadline for an extra deposit of US$1.05m.One Bernam records 80 units sales (23% take-up rate) on its opening weekendMCC Group and Hao Yuan Investment said that over 80 units or 80% of the first phase of 100 units released at their JV project, One Bernam, were sold. This means ~23% out of a total of the 351units in the 99-year leasehold, mixed-use development, has been sold at ~S$2,650psf ASP. More than 90% of the units that were taken up were one- and two-bedroom units sized from 441-872sqft, priced upwards of S$1.017m. Most of the buyers are said to be Singapore citizens and Permanent Residents. In addition to the 351 residential units, One Bernam contains a two-storey retail podium of 15,726sqft, and one floor of serviced apartments with 13 keys. While one- and two-bedroom units make up 91% of the residences in the project, there are 29 three-bedroom apartments of 1,421sqft. There are also two units of three-bedroom penthouses with sizes of 1,744-1,948sqft, while the largest penthouse is 4,306sqft in size and contains five bedrooms. Biggest penthouse at Park Nova sold at S$5,838psf, a record for Orchard Boulevard areaPark Nova, Shun Tak Holdings’ luxury condo in Singapore’s Orchard Boulevard-Tomlinson area, has recorded five units sales for well over $100m. The two biggest five-bedroom penthouses in the 54-unit luxury condo at 18 Tomlinson Road fetched S$34.438m and S$26.026m, respectively. The biggest penthouse of 5,899sqft garnered interest from more than one party and almost had to be sold via balloting. However, one party prevailed and emerged the eventual buyer at S$34.438m or S$5,838psf. The transaction price of S$26.026m for the second biggest penthouse of 4,499sqft, worked out to S$5,785psf. The third and smallest penthouse of 3,229sqft is also believed to have been sold for above S$17m.

ASEAN Builder's Scoop (10May21) - ECWREIT renews major Hengde logistics lease

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)

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Equity Bottom-Up

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IT has been over a year since China lifted Wuhan's lockdown. The world's second largest economy announced an 18.3 per cent expansion in gross domestic product (GDP) for the first quarter of 2021 from a year ago. Growth was driven by strong domestic retail sales and exports.

China's retail sales rose 34.2 per cent year on year (yoy) in March, higher than the 33.8 per cent increase in the first two months of 2021. Exports data announced last Friday showed 32.3 per cent yoy growth in April, exceeding analysts' forecasts. With effective Covid-19 containment measures, the International Monetary Fund (IMF) forecasts China's 2021 GDP to expand 8.4 per cent.

The FTSE ST China Index is up 15.2 per cent in the year to May 6.

Among Singapore's listed Reits and property trusts are 10 with exposure to properties in China across various sub-sectors. Of the 10, five have 100 per cent of their assets located in China: CapitaLand China Trust (CLCT), Sasseur Reith, EC World Reit, BHG Retail Reit, and Dasin Retail Trust. The five have an average gearing ratio of 35 per cent, lower than the average of S-Reits (38 per cent); trade at a price-to-book ratio of 0.8 time; and have an average distribution yield of 5.6 per cent. 
CLCT, the largest China-focused S-Reit, has expanded its investment mandate to include office and industrial assets including business parks, logistics facilities, data centres and integrated developments. With the recent acquisition of business parks and balance 49 per cent interest in Rock Square, CLCT's portfolio consists of 11 retail malls and five business park properties across 10 cities. 
CLCT noted in its Q1 business updates that its retail portfolio has seen encouraging recovery in shopper traffic and tenant sales, with yoy increases at 52.1 per cent and 47.2 per cent, respectively. It has an above-market occupancy rate of 94.4 per cent. At its business parks, the percentage of workforce reporting to work returned to pre-Covid-19 levels by mid Q2 2020 and this segment achieved strong rental reversion. Most new tenants in CLCT's business parks portfolio are from high-growth sectors such as electronics (52 per cent of new tenants), information and communications (28 per cent) and e-commerce (17 per cent).

Sasseur Reit, Asia's first outlet mall Reit, has four outlet malls located in Chongqing, Bishan, Hefei and Kunming. In FY2020, it recorded a one per cent increase in distributable income and maintained its distribution per unit despite having to close its outlets for 45 days last year. Sasseur Reit has a gearing ratio of 27.9 per cent, one of the lowest among S-Reits. Its sponsor has three new projects, bringing the number of pipeline projects to 12. There were three pipeline properties at its listing in 2018. Sasseur Reit will announce its Q1 numbers on May 12.

EC World Reit is the first specialised e-commerce, supply-chain management and logistics focused S-Reit. It has eight properties in the e-commerce clusters of Hangzhou and Wuhan. It recorded resilient 10.7 per cent and 11.8 per cent yoy increases in gross revenue and net property income, respectively, in FY2020, attributed to its Fuzhou E-Commerce acquisition in August 2019. The Reit has a gearing ratio of 38.1 per cent and a 99.3 per cent occupancy rate. EC World Reit will announce Q1 numbers on May 11.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/china-poised-to-drive-economic-growth"> read</a><a href="https://www.businesstimes.com.sg/companies-markets/bulk-of-s-reits-in-key-global-real-estate-indices"> </a>the original version.
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    S-REITs & Property Trusts with assets in China


IT has been over a year since China lifted Wuhan's lockdown. The world's second largest economy announced an 18.3 per cent expansion in gross domestic product (GDP) for the first quarter of 2021 from a year ago. Growth was driven by strong domestic retail sales and exports.

China's retail sales rose 34.2 per cent year on year (yoy) in March, higher than the 33.8 per cent increase in the first two months of 2021. Exports data announced last Friday showed 32.3 per cent yoy growth in April, exceeding analysts' forecasts. With effective Covid-19 containment measures, the International Monetary Fund (IMF) forecasts China's 2021 GDP to expand 8.4 per cent.

The FTSE ST China Index is up 15.2 per cent in the year to May 6.

Among Singapore's listed Reits and property trusts are 10 with exposure to properties in China across various sub-sectors. Of the 10, five have 100 per cent of their assets located in China: CapitaLand China Trust (CLCT), Sasseur Reith, EC World Reit, BHG Retail Reit, and Dasin Retail Trust. The five have an average gearing ratio of 35 per cent, lower than the average of S-Reits (38 per cent); trade at a price-to-book ratio of 0.8 time; and have an average distribution yield of 5.6 per cent.  
CLCT, the largest China-focused S-Reit, has expanded its investment mandate to include office and industrial assets including business parks, logistics facilities, data centres and integrated developments. With the recent acquisition of business parks and balance 49 per cent interest in Rock Square, CLCT's portfolio consists of 11 retail malls and five business park properties across 10 cities.  
CLCT noted in its Q1 business updates that its retail portfolio has seen encouraging recovery in shopper traffic and tenant sales, with yoy increases at 52.1 per cent and 47.2 per cent, respectively. It has an above-market occupancy rate of 94.4 per cent. At its business parks, the percentage of workforce reporting to work returned to pre-Covid-19 levels by mid Q2 2020 and this segment achieved strong rental reversion. Most new tenants in CLCT's business parks portfolio are from high-growth sectors such as electronics (52 per cent of new tenants), information and communications (28 per cent) and e-commerce (17 per cent).

Sasseur Reit, Asia's first outlet mall Reit, has four outlet malls located in Chongqing, Bishan, Hefei and Kunming. In FY2020, it recorded a one per cent increase in distributable income and maintained its distribution per unit despite having to close its outlets for 45 days last year. Sasseur Reit has a gearing ratio of 27.9 per cent, one of the lowest among S-Reits. Its sponsor has three new projects, bringing the number of pipeline projects to 12. There were three pipeline properties at its listing in 2018. Sasseur Reit will announce its Q1 numbers on May 12.

EC World Reit is the first specialised e-commerce, supply-chain management and logistics focused S-Reit. It has eight properties in the e-commerce clusters of Hangzhou and Wuhan. It recorded resilient 10.7 per cent and 11.8 per cent yoy increases in gross revenue and net property income, respectively, in FY2020, attributed to its Fuzhou E-Commerce acquisition in August 2019. The Reit has a gearing ratio of 38.1 per cent and a 99.3 per cent occupancy rate. EC World Reit will announce Q1 numbers on May 11.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - China poised to drive economic growth

CapitaLand China Trust / Equity Bottom-Up

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The FTSE ST China Index is comprised of the 15 constituents of the FTSE ST All-Share Index that either report more than 50% of revenue or more than 50% of assets to China. The FTSE ST China Index has seen net institutional and net proprietary inflows of S$181 million in the 2021 YTD. 
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The FTSE ST China Index has also continued its gains in April, bringing the 2021 YTD total return to 18.8%, with all 15 constituents generating gains. This brings the five year total return of the FTSE ST China Index to 49.8%, which compares to 45.0% for the HSCEI in SGD terms, and 32.8% for the FTSE ST All Share Index. 
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	<li>In the April MTD, Hong Leong Asia, Sunpower and Yangzijiang led the Index, with the trio averaging 16.5% gains with industries spanning engine manufacturing and building materials, green investments and shipbuilding. Yangzijiang and Hong Leong Asia have also been the strongest of the 15 constituents in the 2021 YTD. </li>
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The FTSE ST China Index is comprised of the 15 constituents of the FTSE ST All-Share Index that either report more than 50% of revenue or more than 50% of assets to China. The FTSE ST China Index has seen net institutional and net proprietary inflows of S$181 million in the 2021 YTD.  
	 
	
The FTSE ST China Index has also continued its gains in April, bringing the 2021 YTD total return to 18.8%, with all 15 constituents generating gains. This brings the five year total return of the FTSE ST China Index to 49.8%, which compares to 45.0% for the HSCEI in SGD terms, and 32.8% for the FTSE ST All Share Index.  
	 
	In the April MTD, Hong Leong Asia, Sunpower and Yangzijiang led the Index, with the trio averaging 16.5% gains with industries spanning engine manufacturing and building materials, green investments and shipbuilding. Yangzijiang and Hong Leong Asia have also been the strongest of the 15 constituents in the 2021 YTD. 



SG China Index Soars 19% YTD, led by HLA, Sunpower & YZJ in April

Singapore

EC World Real Estate Investment Trust (EC World REIT) is the first Chinese specialised logistics and e-commerce logistics REIT listed on SGX-ST. 

It has a portfolio of quality properties located predominantly in one of the largest e-commerce clusters in the Yangtze River Delta which offers investors unique exposure to the logistics and e-commerce sectors in Hangzhou and Wuhan, China.
  
EC World REIT’s investment strategy is to invest principally, directly or indirectly, in a diversified portfolio of income-producing real estate which is used primarily for e-commerce, supply-chain management and logistics purposes, as well as real estate-related assets, with an initial geographical focus on the PRC. 

EC World REIT is listed in several indices. These include the FTSE ASEAN All-Share Index, FTSE ST All-Share Index, FTSE ST China Index and FTSE ST Singapore Shariah Index. For more information, please visit: http://www.ecwreit.com/ 

EC World REIT is managed by EC World Asset Management Pte. Ltd., which is an indirect wholly-owned subsidiary of the Sponsor – Forchn Holdings Group Co., Ltd.

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EC World Reit (ECWREIT SP)

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REIT Watch - China poised to drive economic growth

IT has been over a year since China lifted Wuhan's lockdown. The world's second largest economy announced an 18.3 per cent...

Singapore Exchange Ltd (SGX)

SG China Index Soars 19% YTD, led by HLA, Sunpower & YZJ in April

The FTSE ST China Index is comprised of the 15 constituents of the FTSE ST All-Share Index that either report more than 50% of revenue or more...

Singapore Exchange Ltd (SGX)

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