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>The Great Room to open its biggest Co-working space at Afro Asia building in Oct21</h3><p>Hospitality-led co-working space operator, The Great Room, will open its fifth location in Singapore in Oct21. The Great Room will take up 37,000sqft across three floors of the new 19-storey office tower at Afro Asia Building. Jointly developed by the Tan family of Afro-Asia Shopping Co and Japanese giant construction company Shimizu Corp, the building has been conferred the Green Mark Platinum and LEED Platinum ecological certifications. The co-working space will be The Great Room’s largest in Singapore and will span the sixth to eighth floors. The Great Room will also manage the fifth-floor sky garden that can be used as an outdoor event space.</p>

SingaporeThe Great Room to open its biggest Co-working space at Afro Asia building in Oct21Hospitality-led co-working space operator, The Great Room, will open its fifth location in Singapore in Oct21. The Great Room will take up 37,000sqft across three floors of the new 19-storey office tower at Afro Asia Building. Jointly developed by the Tan family of Afro-Asia Shopping Co and Japanese giant construction company Shimizu Corp, the building has been conferred the Green Mark Platinum and LEED Platinum ecological certifications. The co-working space will be The Great Room’s largest in Singapore and will span the sixth to eighth floors. The Great Room will also manage the fifth-floor sky garden that can be used as an outdoor event space.

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

RL Commercial REIT / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/rl-commercial-reit" target="_blank" data-smartkarma-citation="entities:33809:1" rel="noopener">RL Commercial REIT (1888938D PM)</a>/RLC REIT is the REIT platform of <a href="https://www.smartkarma.com/entities/robinsons-land-corp" target="_blank" data-smartkarma-citation="entities:8831:1" rel="noopener">Robinsons Land Co (RLC PM)</a>, one of the leading property developers in the Philippines. RLC REIT has set its final offer price at PHP6.45 per unit, which is 12% below the previous maximum price of PHP7.31 per unit.</p><p>The official subscription period will run from 25 August to 3 September. The listing date is set for 14 September. RLC REIT’s listing will be quickly followed by the IPO of <a href="https://www.smartkarma.com/entities/megaworld-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:33806:1" rel="noopener">Megaworld Real Estate Investment Trust (MREIT PM)</a> – <a href="https://www.smartkarma.com/insights/megaworld-reit-mreit-ipo-at-the-front-of-the-back-office" target="_blank" data-smartkarma-citation="insights:55851" rel="noopener">Megaworld REIT (MREIT) IPO: At the Front of the Back Office</a>.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/rl-commerical-reit-ipo-initiation-a-big-one" target="_blank" data-smartkarma-citation="insights:56158" rel="noopener">RL Commerical REIT IPO Initiation: A Big One</a>, we noted that RLC REIT has attractive characteristics and will be the largest REIT as measured by market cap, asset size, and geographical spread to be listed on the PSE. Our valuation analysis suggests that the final IPO price is reasonable. </p></div>

RL Commercial REIT (1888938D PM)/RLC REIT is the REIT platform of Robinsons Land Co (RLC PM), one of the leading property developers in the Philippines. RLC REIT has set its final offer price at PHP6.45 per unit, which is 12% below the previous maximum price of PHP7.31 per unit.The official subscription period will run from 25 August to 3 September. The listing date is set for 14 September. RLC REIT’s listing will be quickly followed by the IPO of Megaworld Real Estate Investment Trust (MREIT PM) – Megaworld REIT (MREIT) IPO: At the Front of the Back Office.In RL Commerical REIT IPO Initiation: A Big One, we noted that RLC REIT has attractive characteristics and will be the largest REIT as measured by market cap, asset size, and geographical spread to be listed on the PSE. Our valuation analysis suggests that the final IPO price is reasonable. 

RL Commerical REIT IPO: Valuation Insights

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.

<div>
<p>Keppel DC REIT (KDCREIT SP) plans to raise up to US$151m (S$204m) via a mix of a private placement. The company will use the proceeds to fund the recent acquisition of its first China data centre and to pay down debt. </p>
<p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</p>
<p>We have covered the listing and previous placements for KDC in our earlier notes:</p>
</div><div><ul style="list-style-type: disc;">
<li>Sep 2019 placement for US$273m: <a href="https://www.smartkarma.com/insights/keppel-dc-reit-placement-just-in-time-for-the-index-inclusion" target="_blank" rel="noopener">Keppel DC REIT Placement - Just in Time for the Index Inclusion</a>
</li>
<li>May 2018 placement for US$228m: <a href="https://www.smartkarma.com/insights/keppel-dc-reit-placement-accretive-acquisition-and-probably-expected-dilution" target="_blank" rel="noopener">Keppel DC REIT Placement - Accretive Acquisition and Probably Expected Dilution</a>
</li>
<li>IPO: <a href="https://www.smartkarma.com/insights/first-of-its-kind-exposure-to-rapidly-growing-data-centers" target="_blank" rel="noopener">First of its kind exposure to rapidly growing data centers</a>
</li>
</ul></div>


Keppel DC REIT (KDCREIT SP) plans to raise up to US$151m (S$204m) via a mix of a private placement. The company will use the proceeds to fund the recent acquisition of its first China data centre and to pay down debt. 
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
We have covered the listing and previous placements for KDC in our earlier notes:

Sep 2019 placement for US$273m: Keppel DC REIT Placement - Just in Time for the Index Inclusion

May 2018 placement for US$228m: Keppel DC REIT Placement - Accretive Acquisition and Probably Expected Dilution

IPO: First of its kind exposure to rapidly growing data centers



Keppel DC REIT Placement - Most of the past Deals Have Done Well, Though This Won’t Be Accretive

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

<figure>
      <img src='https://api2.sgx.com/sites/default/files/2021-08/Capture_8.PNG' alt='Institutional investors net fund flow in SREITS' />
    </figure>
    <div class='content-caption'>Institutional investors net fund flow in SREITS</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body><p>There are seven S-Reits in the Straits Times Index (STI), making up close to 14 per cent of the benchmark.<br><br>
The seven S-Reits generated an average total return of 5.2 per cent in the third quarter-to-date till Aug 5, outperforming the STI which gained 1.6 per cent over the same period.<br><br>
Keppel DC REIT (+6.8 per cent), Ascendas REIT (+6.8 per cent) and Mapletree Industrial Trust (+6.1 per cent) were the top three S-REITs performers in the STI.<br><br>
The sector's outperformance was not limited to S-Reits within the STI, but also extended to the broader S-Reits and property trusts sector in Singapore. The iEdge S-Reit Index generated a total return of 3.6 per cent since the end of June, which is more than double that of the STI's 1.6 per cent gains.<br><br>
In July 2021, institutional investors were net buyers of the sector with net inflows of S$54.1 million, after being net sellers for six consecutive months in 2021.<br><br>
ARA LOGOS Logistics Trust (+S$46.7 million), Keppel REIT (+S$25.8 million), OUE Commercial REIT (+S$19.1 million), Lendlease Global Commercial REIT (+S$17.2 million) and Starhill Global REIT (+S$14.4 million) were the top five S-REITs that received the highest net institutional inflows in the first seven months of 2021.<br><br>
Starhill Global Reit (SGReit) announced that its full year gross revenue grew 0.3 per cent year on year (yoy) to S$181.3 million in FY20/21. Its net property income (NPI) increased by 2.0 per cent yoy to S$134.7 million in FY20/21. The Reit's FY20/21 distribution per unit (DPU) grew 33.4 per cent yoy to 3.95 cents. SGReit noted that despite the uncertainty of the Covid-19 situation, its retail portfolio occupancy, based on committed leases, remained stable at 97.5 per cent as at June 30, 2021.<br><br>
On Aug 4, Lendlease Global Commercial Reit (LReit) completed the acquisition of 53 per cent interest in Lendlease Jem Partners Fund and will make a further announcement on the status of the acquisition of a 5 per cent interest in Lendlease Asian Retail Investment Fund 3.<br><br>
Upon completion of these acquisitions, LReit will hold an effective indirect interest of up to 31.8 per cent in Jem. LReit is scheduled to report its full year financial results on Aug 10, 2021.<br><br>
OUE Commercial Reit (OUE C-Reit) reported a 3.1 per cent decline in NPI for 2021 due to the completion of divestment of a 50 per cent interest in OUE Bayfront in March 2021.<br><br>
The performance of OUE Bayfront is no longer consolidated and is recognised as share of joint venture results.<br><br>
With lower interest expense and including the share of joint venture results from OUE Bayfront, the amount available for distribution to OUE C-Reit's unitholders in H1 2021 was 3.0 per cent higher yoy, translating to a DPU of 1.23 cents, which is 23.0 per cent higher yoy.<br><br><strong><em>REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/institutional-investors-return-to-s-reits-in-q32021">read </a>the original version.</em></strong></p></body></html>



      
    
    Institutional investors net fund flow in SREITS

There are seven S-Reits in the Straits Times Index (STI), making up close to 14 per cent of the benchmark.  
The seven S-Reits generated an average total return of 5.2 per cent in the third quarter-to-date till Aug 5, outperforming the STI which gained 1.6 per cent over the same period.  
Keppel DC REIT (+6.8 per cent), Ascendas REIT (+6.8 per cent) and Mapletree Industrial Trust (+6.1 per cent) were the top three S-REITs performers in the STI.  
The sector's outperformance was not limited to S-Reits within the STI, but also extended to the broader S-Reits and property trusts sector in Singapore. The iEdge S-Reit Index generated a total return of 3.6 per cent since the end of June, which is more than double that of the STI's 1.6 per cent gains.  
In July 2021, institutional investors were net buyers of the sector with net inflows of S$54.1 million, after being net sellers for six consecutive months in 2021.  
ARA LOGOS Logistics Trust (+S$46.7 million), Keppel REIT (+S$25.8 million), OUE Commercial REIT (+S$19.1 million), Lendlease Global Commercial REIT (+S$17.2 million) and Starhill Global REIT (+S$14.4 million) were the top five S-REITs that received the highest net institutional inflows in the first seven months of 2021.  
Starhill Global Reit (SGReit) announced that its full year gross revenue grew 0.3 per cent year on year (yoy) to S$181.3 million in FY20/21. Its net property income (NPI) increased by 2.0 per cent yoy to S$134.7 million in FY20/21. The Reit's FY20/21 distribution per unit (DPU) grew 33.4 per cent yoy to 3.95 cents. SGReit noted that despite the uncertainty of the Covid-19 situation, its retail portfolio occupancy, based on committed leases, remained stable at 97.5 per cent as at June 30, 2021.  
On Aug 4, Lendlease Global Commercial Reit (LReit) completed the acquisition of 53 per cent interest in Lendlease Jem Partners Fund and will make a further announcement on the status of the acquisition of a 5 per cent interest in Lendlease Asian Retail Investment Fund 3.  
Upon completion of these acquisitions, LReit will hold an effective indirect interest of up to 31.8 per cent in Jem. LReit is scheduled to report its full year financial results on Aug 10, 2021.  
OUE Commercial Reit (OUE C-Reit) reported a 3.1 per cent decline in NPI for 2021 due to the completion of divestment of a 50 per cent interest in OUE Bayfront in March 2021.  
The performance of OUE Bayfront is no longer consolidated and is recognised as share of joint venture results.  
With lower interest expense and including the share of joint venture results from OUE Bayfront, the amount available for distribution to OUE C-Reit's unitholders in H1 2021 was 3.0 per cent higher yoy, translating to a DPU of 1.23 cents, which is 23.0 per cent higher yoy.  REIT Watch is a weekly column on The Business Times, read the original version.


REIT Watch - Institutional investors return to S-Reits in Q32021

Event-Driven

<p><a href="https://www.smartkarma.com/entities/singapore-press-holdings-limited" target="_blank" data-smartkarma-citation="entities:9952:1" rel="noopener">Singapore Press Holdings (SPH SP)</a>/SPH announced a privatisation offer from <a href="https://www.smartkarma.com/entities/keppel-corp-ltd" target="_blank" data-smartkarma-citation="entities:12:1" rel="noopener">Keppel Corp (KEP SP)</a>. Keppel is taking private SPH through via a scheme of arrangement. The transaction involves Keppel offering S$0.668 cash per SPH share and 0.596 Keppel REIT units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT units per SPH share. Based on the last close price of <a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192:1" rel="noopener">Keppel REIT (KREIT SP)</a> and <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994:1" rel="noopener">SPH REIT (SPHREIT SP)</a>, the total consideration is S$2.099 per SPH share, which is a 39.9% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review) and an 11.6% premium to the share price of S$1.88 on 30 July 2021 (last trading day). </p><p>The privatisation proposal is the culmination of the SPH’s strategic review to unlock shareholder value. Keppel's offer was the best offer from several proposals evaluated, according to SPH management. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Post completion of the media business restructuring (requires approval at the EGM in Aug-Sep), SPH would be released from NPPA restrictions including the 5% shareholding cap restriction. Due to the impending lifting of the 5% shareholding cap, the SPH Board's preference was an offer for the whole SPH, to ensure the emergence of a controlling shareholder.</p><div class="content-highlight"><p>The key conditions for the successful privatisation are the completion of the media business restructuring, regulatory approval, SPH and Keppel shareholder approval. The modest premium/discount to historical long-term multiples and share prices is unlikely to excite long-term SPH shareholders. The offer price is largely designed to appeal to SPH shareholders lacking patience for SPH to unlock value through capital recycling (such as a listing of PBSA assets, disposal of investments), a post-COVID-19 recovery particularly in its property businesses and improving earnings quality through diversifying into defensive assets. Overall, while the implied offer price is not a knockout bid, it is ok in the context of our SoTP valuation (post-media business restructuring). </p></div>

Singapore Press Holdings (SPH SP)/SPH announced a privatisation offer from Keppel Corp (KEP SP). Keppel is taking private SPH through via a scheme of arrangement. The transaction involves Keppel offering S$0.668 cash per SPH share and 0.596 Keppel REIT units per SPH share along with SPH distributing-in-specie 0.782 SPH REIT units per SPH share. Based on the last close price of Keppel REIT (KREIT SP) and SPH REIT (SPHREIT SP), the total consideration is S$2.099 per SPH share, which is a 39.9% premium to the share price of S$1.50 on 30 March 2021 (announcement of SPH’s strategic review) and an 11.6% premium to the share price of S$1.88 on 30 July 2021 (last trading day). The privatisation proposal is the culmination of the SPH’s strategic review to unlock shareholder value. Keppel's offer was the best offer from several proposals evaluated, according to SPH management. The strategic review commenced with the announcement of the media business restructuring announced on 6 May. Post completion of the media business restructuring (requires approval at the EGM in Aug-Sep), SPH would be released from NPPA restrictions including the 5% shareholding cap restriction. Due to the impending lifting of the 5% shareholding cap, the SPH Board's preference was an offer for the whole SPH, to ensure the emergence of a controlling shareholder.The key conditions for the successful privatisation are the completion of the media business restructuring, regulatory approval, SPH and Keppel shareholder approval. The modest premium/discount to historical long-term multiples and share prices is unlikely to excite long-term SPH shareholders. The offer price is largely designed to appeal to SPH shareholders lacking patience for SPH to unlock value through capital recycling (such as a listing of PBSA assets, disposal of investments), a post-COVID-19 recovery particularly in its property businesses and improving earnings quality through diversifying into defensive assets. Overall, while the implied offer price is not a knockout bid, it is ok in the context of our SoTP valuation (post-media business restructuring). 

Singapore

Keppel REIT operates as a commercial real estate investment trust. The Trust owns and invests in a portfolio of income-producing office buildings and related real estate assets. Keppel REIT offers its services in Asia and Australia.

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Keppel REIT (KREIT SP)

ASEAN Builder's Scoop (30Aug21)

Co-working The Great Room opens at Afro Asia; Watergardens sold 60% at wkd launch; KREIT CEO steps down; HOUSE on track for PHP20bn sales in FY21

SCCM Asia Research

RL Commerical REIT IPO: Valuation Insights

RLC REIT has set its final offer price at PHP6.45 per unit, which is 12% below the previous maximum price of PHP7.31 per unit. Our valuation...

Arun George

Keppel DC REIT Placement - Most of the past Deals Have Done Well, Though This Won’t Be Accretive

Keppel DC REIT (KDCREIT SP) plans to raise up to US$151m (S$204m) via a mix of a private placement. The company will use the proceeds to fund the...

Sumeet Singh

REIT Watch - Institutional investors return to S-Reits in Q32021

There are seven S-Reits in the Straits Times Index (STI), making up close to 14 per cent of the benchmark. The seven S-Reits...

Singapore Exchange Ltd (SGX)

SPH’s Privatisation by Keppel

SPH announced a privatisation offer from Keppel for a total consideration is S$2.099 per share. While the implied offer price is not a knockout...

Arun George

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