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/lendlease-global-commercial-reit" target="_blank" data-smartkarma-citation="entities:28292" rel="noopener">Lendlease Global Commercial REIT (LREIT SP)</a> to increase stake in JEM mall; DPU accretive to be funded by debt and perps</h3><ul><li>LREIT has entered into sale and purchase agreements to increase its stake in Jem. Upon completion of the proposed acquisition, LREIT will hold an effective indirect interest of up to 31.8% interest in JEM. The proposed acquisition includes 1) an acquisition of a 53.0% interest in Lendlease Jem Partners Fund Limited (LLJP) from third party vendors for S$159.1m; and 2) an acquisition of a 5.0% interest in Lendlease Asian Retail Investment Fund 3 Limited (ARIF3) from Lendlease International Pty Limited for S$45.0m. LREIT may also acquire up to 19.8% interest in ARIF3 from other third-party investors for S$178.2m. LLJP/ARIF3 holds a 25%/75% indirect interest, respectively, in JEM mall</li><li>As of 31Mar21, JEM was independently valued at S$2,085m and S$2,061m by JLL and CBRE, respectively. It sits on a 99yr lease land site with total NLA of 892,148sqft and 99.7% occupied. The proposed transaction values JEM at S$2,077m (S$2,238psf on NLA – 4.5% retail cap rate, 3.5% office cap rate) – NPI yield of 3.9%</li><li>Following the acquisition, the enlarged portfolio size of S$1.8bn will have a diversified asset base and an increased exposure to more resilient suburban retail and decentralised office segments. The single largest asset by aggregate value of the enlarged portfolio would also decrease from 67.6% to 55.1% (WALE of 6.5 years by GRI)</li><li>On a 1H21 pro-forma basis, the acquisitions are expected to be DPU accretive to unitholders, with an accretive change of +3.0% (assuming 19.8% of ARIF3 is acquired) and +1.3% if only 5% of ARIF3 is acquired. On the other hand, NAV per unit (31Dec20 pro-forma) will slightly decline to S$0.84 and gearing will improve to 34.1% after the acquisition of 19.8% stake in ARIF3. NAV per unit will remain flat at S$0.85 if only 5% of ARIF3 is acquired and gearing will improve to 32.4%</li><li>LREIT will leverage its strong balance sheet to fund this acquisition through debt or a combination of debt and proceeds from the issuance of perpetual securities. The acquisition, which is conditional upon LREIT unitholders’ approval, is expected to complete by 30Sep21. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/211/591/original/image003.png?1623030785" class="editor-image img-responsive" data-smartkarma-image-id="211591"></figure></section></li></ul>

SingaporeLendlease Global Commercial REIT (LREIT SP) to increase stake in JEM mall; DPU accretive to be funded by debt and perpsLREIT has entered into sale and purchase agreements to increase its stake in Jem. Upon completion of the proposed acquisition, LREIT will hold an effective indirect interest of up to 31.8% interest in JEM. The proposed acquisition includes 1) an acquisition of a 53.0% interest in Lendlease Jem Partners Fund Limited (LLJP) from third party vendors for S$159.1m; and 2) an acquisition of a 5.0% interest in Lendlease Asian Retail Investment Fund 3 Limited (ARIF3) from Lendlease International Pty Limited for S$45.0m. LREIT may also acquire up to 19.8% interest in ARIF3 from other third-party investors for S$178.2m. LLJP/ARIF3 holds a 25%/75% indirect interest, respectively, in JEM mallAs of 31Mar21, JEM was independently valued at S$2,085m and S$2,061m by JLL and CBRE, respectively. It sits on a 99yr lease land site with total NLA of 892,148sqft and 99.7% occupied. The proposed transaction values JEM at S$2,077m (S$2,238psf on NLA – 4.5% retail cap rate, 3.5% office cap rate) – NPI yield of 3.9%Following the acquisition, the enlarged portfolio size of S$1.8bn will have a diversified asset base and an increased exposure to more resilient suburban retail and decentralised office segments. The single largest asset by aggregate value of the enlarged portfolio would also decrease from 67.6% to 55.1% (WALE of 6.5 years by GRI)On a 1H21 pro-forma basis, the acquisitions are expected to be DPU accretive to unitholders, with an accretive change of +3.0% (assuming 19.8% of ARIF3 is acquired) and +1.3% if only 5% of ARIF3 is acquired. On the other hand, NAV per unit (31Dec20 pro-forma) will slightly decline to S$0.84 and gearing will improve to 34.1% after the acquisition of 19.8% stake in ARIF3. NAV per unit will remain flat at S$0.85 if only 5% of ARIF3 is acquired and gearing will improve to 32.4%LREIT will leverage its strong balance sheet to fund this acquisition through debt or a combination of debt and proceeds from the issuance of perpetual securities. The acquisition, which is conditional upon LREIT unitholders’ approval, is expected to complete by 30Sep21. 

ASEAN Builder's Scoop (7Jun21) - LREIT Increases Stake in JEM Mall

Malaysia

Ekovest Berhad is an investment holding company. Through its subsidiaries, the Company provides civil engineering and building works, construction services, and project management designs.

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Ekovest Bhd (EKO MK)

ASEAN Builder's Scoop (7Jun21) - LREIT Increases Stake in JEM Mall

LREIT increases stake in JEM Mall; CERT expands further into Czech logistics; ELITE applies for TISE listing; Phils May inflation steady; UEMS...

SCCM Asia Research

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