Research from SooChow CSSD Capital Markets (Asia), SCCM Asia Research

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Headquartered in Singapore, SooChow CSSD Capital Markets (Asia) is an investment bank focusing on emerging growth companies across Asia, providing a full suite of investment banking services, including corporate finance, mergers and acquisitions advisory, equity capital markets, institutional equities sales and trading and equities research.

SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<ul><li>Mapletree Logistics Trust (MLT SP) to purchase 17 properties in China, Vietnam and Japan for ~S$1.4bn; DPU accretive by +2.2%</li><li>Ascendas India Trust (AIT SP) completes acquisition of Building Q1 in Aurum Q Parc at Navi Mumbai</li><li>Digital Realty seeks to list data centre-focused Digital Core REIT; FY22-23 dividend yield forecasts of 4.75-5%</li></ul>

Mapletree Logistics Trust (MLT SP) to purchase 17 properties in China, Vietnam and Japan for ~S$1.4bn; DPU accretive by +2.2%Ascendas India Trust (AIT SP) completes acquisition of Building Q1 in Aurum Q Parc at Navi MumbaiDigital Realty seeks to list data centre-focused Digital Core REIT; FY22-23 dividend yield forecasts of 4.75-5%

ASEAN Builder's Scoop (23Nov21) - MLT Acquires CN, VN, JPN Logistics for ~S$1.4bn

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.

Equity Capital Markets

Mapletree Logistics Trust / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035:1" rel="noopener">Mapletree Logistics Trust (MLT SP)</a>  plans to raise around US$530 (S$723m) to partially fund the acquisition of logistics properties in China, Vietnam and Japan. </li>
<li>Most of the past deals have done well except for the October 2020 one. </li>
<li>This deal is similar to the October placement in terms of the size of the private placement and its relatively small accretion. </li>
</ul>



Mapletree Logistics Trust (MLT SP)  plans to raise around US$530 (S$723m) to partially fund the acquisition of logistics properties in China, Vietnam and Japan. 
Most of the past deals have done well except for the October 2020 one. 
This deal is similar to the October placement in terms of the size of the private placement and its relatively small accretion. 


MLT Placement - Similar to Its October 2020 Deal Which Struggled to Perform

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

CapitaLand Ascendas REIT / Equity Bottom-Up

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S-REITs have announced asset acquisitions exceeding S$9 billion in total purchase consideration over the past 10 months of 2021.

In the month of October, most acquisitions were in logistics and grocery-anchored retail assets and include several maiden acquisitions or forays into new market segments. 
Acquisitions in the month of October totalled S$765 million in purchase consideration and were by CapitaLand China Trust, Ascendas REIT, Mapletree Logistics Trust, and United Hampshire US REIT. 
CapitaLand China Trust (CLCT) made its first foray into China's logistics sector with the acquisition of 4 logistics properties in Shanghai, Kunshan, Wuhan and Chengdu worth 1.7 billion yuan (S$350.7 million).

This increases CLCT's exposure to new economy asset classes following its maiden purchase of a portfolio of 5 business park properties as part of its portfolio reconstitution strategy announced in 2020 to cover multi-assets used primarily for retail, office and industrial use.

The 4 properties have a committed portfolio occupancy of 96.3 per cent and a weighted average lease to expiry of 2.1 years as at Aug 31, 2021. Post-acquisition, CLCT's proportion of new economy assets by asset value will increase from 15.3 per cent to 21.4 per cent. 
CLCT has a 5-year acquisition growth roadmap and plans to achieve a balanced portfolio mix by 2026 comprising 40 per cent in commercial developments, 30 per cent in retail properties and 30 per cent in new economy assets such as business parks, logistics and data centres.

Ascendas Reit in October acquired 11 last mile logistics properties in Kansas City, in the United States for S$207.8 million, marking its first venture into the US logistics market.

Ascendas Reit notes that the Kansas City's logistics sector is well-supported by its central location within the US and its myriad businesses and sectors including transportation and distribution, e-commerce, manufacturing, animal health, technology and the financial industry.

The properties are 92.6 per cent occupied by 27 customers from diverse industries including third-party logistics, wholesale distribution, manufacturing and healthcare and no single customer makes up over 10 per cent of the portfolio's total rental income, lowering portfolio concentration risk.

Mapletree Logistics Trust (MLT) announced the proposed acquisition of the Yeoju Logistics Centre in South Korea for 135 billion won (S$153.8 million), expanding MLT's presence in the Seoul Metropolitan Area to a total of 19 assets.

The property is fully leased to one of South Korea's largest online fashion platforms and a domestic third-party logistics service provider.

It is located in northern Yeoju, which is a newly established logistics hub situated near two major expressways providing enhanced accessibility to and from Seoul.

The acquisition raises MLT's e-commerce revenue exposure in South Korea to 31 per cent, from its previous 24 per cent.

United Hampshire US Reit (UHReit) made its maiden acquisition since listing, acquiring two dominant grocery-anchored retail assets for US$78.25 million (approximately S$105.7 million) in Pennsylvania and Virginia, and extending UHReit's focus on the Eastern seaboard.

The Pennsylvania property is 94.1 per cent occupied while the Virginia property has a 99.1 per cent occupancy rate.

Both properties are anchored by tenants including Publix, one of the largest US grocery chains, and ShopRite, which is a leading supermarket brand in the region, among other home improvement and variety stores.

UHReit notes that both assets fit well with their investment criteria given the locations with limited competition, densely populated communities and backed by cycle agnostic tenants providing essential services. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/s-reits-make-maiden-forays-into-new-segments"> read </a>the original version.
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    SREIT asset


S-REITs have announced asset acquisitions exceeding S$9 billion in total purchase consideration over the past 10 months of 2021.

In the month of October, most acquisitions were in logistics and grocery-anchored retail assets and include several maiden acquisitions or forays into new market segments.  
Acquisitions in the month of October totalled S$765 million in purchase consideration and were by CapitaLand China Trust, Ascendas REIT, Mapletree Logistics Trust, and United Hampshire US REIT.  
CapitaLand China Trust (CLCT) made its first foray into China's logistics sector with the acquisition of 4 logistics properties in Shanghai, Kunshan, Wuhan and Chengdu worth 1.7 billion yuan (S$350.7 million).

This increases CLCT's exposure to new economy asset classes following its maiden purchase of a portfolio of 5 business park properties as part of its portfolio reconstitution strategy announced in 2020 to cover multi-assets used primarily for retail, office and industrial use.

The 4 properties have a committed portfolio occupancy of 96.3 per cent and a weighted average lease to expiry of 2.1 years as at Aug 31, 2021. Post-acquisition, CLCT's proportion of new economy assets by asset value will increase from 15.3 per cent to 21.4 per cent.  
CLCT has a 5-year acquisition growth roadmap and plans to achieve a balanced portfolio mix by 2026 comprising 40 per cent in commercial developments, 30 per cent in retail properties and 30 per cent in new economy assets such as business parks, logistics and data centres.

Ascendas Reit in October acquired 11 last mile logistics properties in Kansas City, in the United States for S$207.8 million, marking its first venture into the US logistics market.

Ascendas Reit notes that the Kansas City's logistics sector is well-supported by its central location within the US and its myriad businesses and sectors including transportation and distribution, e-commerce, manufacturing, animal health, technology and the financial industry.

The properties are 92.6 per cent occupied by 27 customers from diverse industries including third-party logistics, wholesale distribution, manufacturing and healthcare and no single customer makes up over 10 per cent of the portfolio's total rental income, lowering portfolio concentration risk.

Mapletree Logistics Trust (MLT) announced the proposed acquisition of the Yeoju Logistics Centre in South Korea for 135 billion won (S$153.8 million), expanding MLT's presence in the Seoul Metropolitan Area to a total of 19 assets.

The property is fully leased to one of South Korea's largest online fashion platforms and a domestic third-party logistics service provider.

It is located in northern Yeoju, which is a newly established logistics hub situated near two major expressways providing enhanced accessibility to and from Seoul.

The acquisition raises MLT's e-commerce revenue exposure in South Korea to 31 per cent, from its previous 24 per cent.

United Hampshire US Reit (UHReit) made its maiden acquisition since listing, acquiring two dominant grocery-anchored retail assets for US$78.25 million (approximately S$105.7 million) in Pennsylvania and Virginia, and extending UHReit's focus on the Eastern seaboard.

The Pennsylvania property is 94.1 per cent occupied while the Virginia property has a 99.1 per cent occupancy rate.

Both properties are anchored by tenants including Publix, one of the largest US grocery chains, and ShopRite, which is a leading supermarket brand in the region, among other home improvement and variety stores.

UHReit notes that both assets fit well with their investment criteria given the locations with limited competition, densely populated communities and backed by cycle agnostic tenants providing essential services.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits make maiden forays into new segments

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

Daiwa House Logistics Trust / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020:1" rel="noopener">Daiwa House Logistics Trust (DHLT SP),</a> a Japan pure-play logistics REIT, is looking to raise US$343m in its Singapore IPO.</li>
<li>As of Jun 2021, its assets had an aggregate net lettable area (NLA) of 423,920 sqm and had an appraised valuation of approximately JPY80,570m (S$952.9m).</li>
<li>No compelling reason to buy as other SG-listed industrial/logistics REITs offer similar yields while having a much larger and diversified portfolio.</li>
</ul>



Daiwa House Logistics Trust (DHLT SP), a Japan pure-play logistics REIT, is looking to raise US$343m in its Singapore IPO.
As of Jun 2021, its assets had an aggregate net lettable area (NLA) of 423,920 sqm and had an appraised valuation of approximately JPY80,570m (S$952.9m).
No compelling reason to buy as other SG-listed industrial/logistics REITs offer similar yields while having a much larger and diversified portfolio.


Daiwa House Logistics Trust IPO - Valuation Appears Ok, but There Is No Compelling Reason to Buy

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020:1" rel="noopener">Daiwa House Logistics Trust (DHLT SP)</a> has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. </li>
<li>In <a href="https://www.smartkarma.com/insights/daiwa-house-logistics-trust-ipo-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:60978" rel="noopener">Daiwa House Logistics Trust IPO: The Flow of Things</a>, we outlined its attractive value proposition.  </li>
<li>Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable.</li>
</ul>



Daiwa House Logistics Trust (DHLT SP) has launched an SGX IPO to raise gross proceeds of S$464 million ($343 million) at an IPO price of S$0.80 per unit. 
In Daiwa House Logistics Trust IPO: The Flow of Things, we outlined its attractive value proposition.  
Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable.


Daiwa House Logistics Trust IPO: Valuation Insights

Singapore

Mapletree Logistics Trust is an Asia-focused logistics real estate investment trust. The Company invests in a diversified portfolio of income-producing real estate which is used for logistics purposes.

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Mapletree Logistics Trust (MLT SP)

ASEAN Builder's Scoop (23Nov21) - MLT Acquires CN, VN, JPN Logistics for ~S$1.4bn

MLT acquires CN, VN, JPN logistics for ~S$1.4bn; AIT completes Navi Mumbai acq; Digital Core REIT offers 4.75-5% yield; FLI resi buoys 3Q21...

SCCM Asia Research

MLT Placement - Similar to Its October 2020 Deal Which Struggled to Perform

Mapletree Logistics Trust (MLT SP) plans to raise around US$530 (S$723m) to partially fund the acquisition of logistics properties in China,...

Sumeet Singh

REIT Watch - S-Reits make maiden forays into new segments

S-REITs have announced asset acquisitions exceeding S$9 billion in total purchase consideration over the past 10 months of...

Singapore Exchange Ltd (SGX)

Daiwa House Logistics Trust IPO - Valuation Appears Ok, but There Is No Compelling Reason to Buy

Daiwa House Logistics Trust (DHLT SP), a Japan pure-play logistics REIT, is looking to raise US$343m in its Singapore IPO.

Clarence Chu

Daiwa House Logistics Trust IPO: Valuation Insights

Our valuation analysis suggests that the IPO price of S$0.80 per unit is reasonable. Bookbuilding will end on 18 Nov, with an expected listing date...

Arun George

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