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: 136.65pt; 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

<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

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/ascott-residence-trust" target="_blank" data-smartkarma-citation="entities:6560" rel="noopener">Ascott Residence Trust (ART SP)</a> acquires three Japan rental housings for JPY6.78bn (S$85.2m); DPU accretive by +2.6%</h3><ul><li>ART has entered into agreements to acquire three freehold rental housing properties in central Sapporo for a total of JPY6.78bn (S$85.2m). The three rental housing properties – City Court Kita 1 jo, Big Palace Minami 5 jo, and Alpha Square Kita 15 jo came from unrelated third parties. The average EBITDA yield of the three acquisitions is ~4%. On a FY2020 pro forma basis, this transaction is expected to be DPS accretive by +2.6% with expected completion by end Jun21. This transaction will be funded by debt and part of the net proceeds from recent divestments of Somerset Xu Hui Shanghai. The exit yield was ~2% and ART has received net proceeds of RMB953.9m (~S$196.8m) and realized a net divestment gain of RMB582.6m (~S$120.2m)</li><li>The three rental housing properties with a total of 411 units will increase ART’s portfolio in Japan to over 4,500 units in 22 serviced residences, hotels and rental housing properties in nine cities. ART will have a total of 14 rental housing properties in Japan including four in Sapporo. The three rental housing properties will be managed by a local property manager, Kabushiki Kaisha Big Service, which is also the current property manager for ART’s rental housing property in Sapporo, Big Palace Kita 14 jo.</li></ul>

SingaporeAscott Residence Trust (ART SP) acquires three Japan rental housings for JPY6.78bn (S$85.2m); DPU accretive by +2.6%ART has entered into agreements to acquire three freehold rental housing properties in central Sapporo for a total of JPY6.78bn (S$85.2m). The three rental housing properties – City Court Kita 1 jo, Big Palace Minami 5 jo, and Alpha Square Kita 15 jo came from unrelated third parties. The average EBITDA yield of the three acquisitions is ~4%. On a FY2020 pro forma basis, this transaction is expected to be DPS accretive by +2.6% with expected completion by end Jun21. This transaction will be funded by debt and part of the net proceeds from recent divestments of Somerset Xu Hui Shanghai. The exit yield was ~2% and ART has received net proceeds of RMB953.9m (~S$196.8m) and realized a net divestment gain of RMB582.6m (~S$120.2m)The three rental housing properties with a total of 411 units will increase ART’s portfolio in Japan to over 4,500 units in 22 serviced residences, hotels and rental housing properties in nine cities. ART will have a total of 14 rental housing properties in Japan including four in Sapporo. The three rental housing properties will be managed by a local property manager, Kabushiki Kaisha Big Service, which is also the current property manager for ART’s rental housing property in Sapporo, Big Palace Kita 14 jo.

ASEAN Builder's Scoop (1June21) - ART Acquires 3 JP Rental Housings

<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> issues S$200m in perpetual securities at 4.2% pa</h3>LREIT has issued S$200m in perpetual securities at 4.20% pa, which was oversubscribed based on the initial target size of S$150m. LREIT raised the issuance size to S$200m and tightened the price to 4.20% from the initial guidance of 4.35%. The perpetual securities is issued under its S$1bn multicurrency debt-issuance programme will bear an initial rate of distribution of 4.20% pa. for the first five years. The first reset of the distribution rate will be on 4Jun26; subsequent resets will take place every five years thereafter. The proceeds will be used for the financing of potential acquisition and investment opportunities as well as for general working capital, capital expenditure requirements and refinancing of existing borrowings. Following the issuance, LREIT's aggregate leverage ratio is expected to drop to 31.3% from 35.4% as at 31Mar21.

SingaporeLendlease Global Commercial REIT (LREIT SP) issues S$200m in perpetual securities at 4.2% paLREIT has issued S$200m in perpetual securities at 4.20% pa, which was oversubscribed based on the initial target size of S$150m. LREIT raised the issuance size to S$200m and tightened the price to 4.20% from the initial guidance of 4.35%. The perpetual securities is issued under its S$1bn multicurrency debt-issuance programme will bear an initial rate of distribution of 4.20% pa. for the first five years. The first reset of the distribution rate will be on 4Jun26; subsequent resets will take place every five years thereafter. The proceeds will be used for the financing of potential acquisition and investment opportunities as well as for general working capital, capital expenditure requirements and refinancing of existing borrowings. Following the issuance, LREIT's aggregate leverage ratio is expected to drop to 31.3% from 35.4% as at 31Mar21.

ASEAN Builder's Scoop (28May21) - LREIT issued perps at 4.2%

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934" rel="noopener">ESR-REIT (EREIT SP)</a> expands into AUS, buys SG logistics asset for ~S$180m</h3><ul><li>EREIT is looking to raise about S$150m via a private placement and preferential offering to fund its S$119.2m acquisition of a Tanjong Penjuru logistics facility, as well as asset enhancement initiatives for properties in Tai Seng and Ang Mo Kio. The real estate investment trust has also obtained a S$68.5m unsecured loan to finance the acquisition of a 10% interest in a GIC-majority-owned Australian logistics investment for AUD60.5m (S$62.4m). The investment indirectly holds 33 income-producing properties, two land parcels for future development and two properties, which are currently under development</li><li>GIC holds an 80% stake in the fund, while ESR Queensland Hold Trust, holds the remaining 20%. The private fund is managed by an indirect subsidiary of ESR Cayman, the REIT’s sponsor. The fund's portfolio comprises properties in five Australia states – New South Wales, Victoria, Queensland, South Australia and Western Australia. These have a total land area of about 1.3m sqm, an occupancy rate of 95.9% and a WALE of 4.87 years as at 31Mar. The Australian acquisition will cost an estimated AUD64.9m, comprising the AUD60.5m purchase price and S$2.5m in fees to be incurred in connection with the deal. This whole amount will be financed fully through debt. The Australia acquisition is expected to be completed in May21</li><li>The Singapore acquisition, meanwhile, saw EREIT's trustee entering into a put and call option agreement with seller Montview Investments for 46A Tanjong Penjuru, a five-storey modern ramp-up logistics facility within the Jurong Industrial Estate. The proposed acquisition will cost EREIT about S$124.7m, comprising a S$112m purchase consideration, an estimated S$7.6m upfront land premium payable to JTC for the balance of the first 30-year lease term, S$3.6m in stamp duties, and S$1.5m in other transaction costs</li><li>EREIT is proposing a private placement of between 195.3-201.6m units to institutional investors and other investors at an issue price of between S$37.2-38.4c, to raise at least S$75m. The private placement is subject to an upsize option which brings the amount raised to a maximum of S$100m. EREIT's also plans to undertake a non-renounceable preferential offering of new units to raise no more than S$50m. The preferential offering will not be underwritten. Details of the offering have not been determined as at the date of the announcement but the manager stated the issue price of the offering may differ from the private placement's issue price</li><li>About S$71.8m, or nearly half, of the gross proceeds from the fundraising exercise will partially finance the Tanjong Penjuru acquisition. Some S$43.5m will be used to partially finance the asset enhancement initiatives (AEIs) of two industrial buildings at 16 Tai Seng Street and 7000 Ang Mo Kio Avenue 5, which will cost about S$25.9-53.3m, respectively. EREIT will use around S$31m of gross proceeds to repay existing indebtedness, while S$3.8m will be used to pay for estimated fees and expenses incurred in connection with the equity fundraising.</li></ul>Comments: While the overall investments and debt repayment offers a low single-digit 1.0-2.3% accretion to FY20 DPU and -1.5% dilution to FY20 NAV, we are positive on the two investments given their complementary potential upside from AEI/development. The SG asset, 46A Tanjong Penjuru, will enhance EREIT’s exposure in the resilient and highly sought-after quality logistics assets, while the strategic investment on the AU Fund demonstrates EREIT’s ability to access Sponsor’s pipeline of assets. The acquisition at a Fund NAV cap rate of 5.5% (vs. the current market range of 4+%) signals Sponsor’s commitment and support to grow EREIT. Despite having only a minor stake, it allows EREIT to be privy to the portfolio performance, thus offering an edge in acquisition opportunities. On the other hand, the continuous AEI/development efforts with 7% yield to cost would provide EREIT a stable organic growth. We have a BUY rating and TP of S$0.47/unit.

SingaporeESR-REIT (EREIT SP) expands into AUS, buys SG logistics asset for ~S$180mEREIT is looking to raise about S$150m via a private placement and preferential offering to fund its S$119.2m acquisition of a Tanjong Penjuru logistics facility, as well as asset enhancement initiatives for properties in Tai Seng and Ang Mo Kio. The real estate investment trust has also obtained a S$68.5m unsecured loan to finance the acquisition of a 10% interest in a GIC-majority-owned Australian logistics investment for AUD60.5m (S$62.4m). The investment indirectly holds 33 income-producing properties, two land parcels for future development and two properties, which are currently under developmentGIC holds an 80% stake in the fund, while ESR Queensland Hold Trust, holds the remaining 20%. The private fund is managed by an indirect subsidiary of ESR Cayman, the REIT’s sponsor. The fund's portfolio comprises properties in five Australia states – New South Wales, Victoria, Queensland, South Australia and Western Australia. These have a total land area of about 1.3m sqm, an occupancy rate of 95.9% and a WALE of 4.87 years as at 31Mar. The Australian acquisition will cost an estimated AUD64.9m, comprising the AUD60.5m purchase price and S$2.5m in fees to be incurred in connection with the deal. This whole amount will be financed fully through debt. The Australia acquisition is expected to be completed in May21The Singapore acquisition, meanwhile, saw EREIT's trustee entering into a put and call option agreement with seller Montview Investments for 46A Tanjong Penjuru, a five-storey modern ramp-up logistics facility within the Jurong Industrial Estate. The proposed acquisition will cost EREIT about S$124.7m, comprising a S$112m purchase consideration, an estimated S$7.6m upfront land premium payable to JTC for the balance of the first 30-year lease term, S$3.6m in stamp duties, and S$1.5m in other transaction costsEREIT is proposing a private placement of between 195.3-201.6m units to institutional investors and other investors at an issue price of between S$37.2-38.4c, to raise at least S$75m. The private placement is subject to an upsize option which brings the amount raised to a maximum of S$100m. EREIT's also plans to undertake a non-renounceable preferential offering of new units to raise no more than S$50m. The preferential offering will not be underwritten. Details of the offering have not been determined as at the date of the announcement but the manager stated the issue price of the offering may differ from the private placement's issue priceAbout S$71.8m, or nearly half, of the gross proceeds from the fundraising exercise will partially finance the Tanjong Penjuru acquisition. Some S$43.5m will be used to partially finance the asset enhancement initiatives (AEIs) of two industrial buildings at 16 Tai Seng Street and 7000 Ang Mo Kio Avenue 5, which will cost about S$25.9-53.3m, respectively. EREIT will use around S$31m of gross proceeds to repay existing indebtedness, while S$3.8m will be used to pay for estimated fees and expenses incurred in connection with the equity fundraising.Comments: While the overall investments and debt repayment offers a low single-digit 1.0-2.3% accretion to FY20 DPU and -1.5% dilution to FY20 NAV, we are positive on the two investments given their complementary potential upside from AEI/development. The SG asset, 46A Tanjong Penjuru, will enhance EREIT’s exposure in the resilient and highly sought-after quality logistics assets, while the strategic investment on the AU Fund demonstrates EREIT’s ability to access Sponsor’s pipeline of assets. The acquisition at a Fund NAV cap rate of 5.5% (vs. the current market range of 4+%) signals Sponsor’s commitment and support to grow EREIT. Despite having only a minor stake, it allows EREIT to be privy to the portfolio performance, thus offering an edge in acquisition opportunities. On the other hand, the continuous AEI/development efforts with 7% yield to cost would provide EREIT a stable organic growth. We have a BUY rating and TP of S$0.47/unit.

ASEAN Builder's Scoop (7May21) - EREIT Maiden Expansion into AUS

Singapore

Lendlease Global Commercial REIT operates as a real estate investment trust. The Company invests in diversified portfolio of real estate assets. Lendlease Global Commercial REIT serves customers worldwide.

Lendlease Global Commercial REIT (LREIT SP)

Price Gauge
52-week Range	0.00 - 0.00
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Lendlease Global Commercial REIT (LREIT SP)

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

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

ASEAN Builder's Scoop (1June21) - ART Acquires 3 JP Rental Housings

ART acquires 3 JP rental housings; MAGIC inaugural 3.5% perps; PropertyGuru expands further in MY, TH; MSGB on-track to meet FY21 sales target

SCCM Asia Research

ASEAN Builder's Scoop (28May21) - LREIT issued perps at 4.2%

LREIT issued perps at 4.2%; More GLS sites launched post highly contested bids; BOCS ~7.5% proposed divvy yield; SDPR 1Q21 earnings skyrocketed;...

SCCM Asia Research

ASEAN Builder's Scoop (7May21) - EREIT Maiden Expansion into AUS

EREIT maiden expansion into AUS; LREIT robust occupancy with limited expiry; SHG acquires Maxwell House; Business Parks +ve outlook; MEG sets 2021...

SCCM Asia Research

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