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)

<h2>Singapore</h2><p>SREITs results in a glance (see detailed spreadsheet and calendar attached)</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/629/original/image_32975221321635260585172.png?1635260588" class="editor-image img-responsive" data-smartkarma-image-id="237629"></figure><h3><a href="https://www.smartkarma.com/entities/keppel-reit" target="_blank" data-smartkarma-citation="entities:192" rel="noopener">Keppel REIT (KREIT SP)</a> 3Q21 Business Updates – Robust growth from acquisitions, healthy occupancy and collections</h3><ul><li>9M21 revenue and NPI increased by 34.8% and 36.8% YoY to S$162.2m (74.8% of BB est.) and S$129.4m (75.0% of BB est.), respectively. 9M21 DI was up 20.8% YoY to S$159.9m (83.3% of BB est.), mainly due to contributions from Victoria Police Centre, Pinnacle Office Park and Keppel Bay Tower. The increase in DI was partially offset by the impact of the divestment of 275 George Street in Jul21</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Keppel REIT (KREIT SP) 3Q21 Business Updates – Robust growth from acquisitions, healthy occupancy and collections9M21 revenue and NPI increased by 34.8% and 36.8% YoY to S$162.2m (74.8% of BB est.) and S$129.4m (75.0% of BB est.), respectively. 9M21 DI was up 20.8% YoY to S$159.9m (83.3% of BB est.), mainly due to contributions from Victoria Police Centre, Pinnacle Office Park and Keppel Bay Tower. The increase in DI was partially offset by the impact of the divestment of 275 George Street in Jul21

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> acquires logistics facility in South Korea at 4.2% NPI yield; Accretive to DPU</h3><ul><li>MLT has proposed an acquisition of Yeoju Logistics Centre in South Korea for KRW135bn (S$153.8m). The property spans over 70,400sqm in total GFA on ~56,200sqm of freehold land, with two blocks of 3-storey dry warehouses that were completed in 2019. The property is equipped with high quality building specifications, including strong floor loading of over 20kg newton psm, high floor-to-ceiling height of 10-17m, large contiguous floor plates of up to 14,200sqm and a full sprinkler system. The Property was independently valued at KRW139.6bn as at 2Sep21</li><li>The Property is strategically located in northern Yeoju, a newly established logistics hub situated northeast of the Yongin-Icheon market, which is the traditional logistics cluster in the Seoul Metropolitan Area. It is fully leased to one of South Korea’s largest online fashion platforms and a domestic third-party logistics service provider. The acquisition will raise MLT’s e-commerce revenue exposure in South Korea from 24% to 31%. It comes with a WALE (by NLA) of ~3.1yrs and built-in annual rent escalations</li><li>The acquisition is estimated to generate a NPI yield of 4.2% based on the property purchase price and is expected to be DPU accretive. Assuming the acquisition is 100% debt funded, MLT’s aggregate gearing ratio will be ~40.3%. The acquisition is expected to be completed by 4Q21. Upon completion, MLT’s total portfolio will comprise 167 properties with AUM of S$11.1bn.</li></ul>

SingaporeMapletree Logistics Trust (MLT SP) acquires logistics facility in South Korea at 4.2% NPI yield; Accretive to DPUMLT has proposed an acquisition of Yeoju Logistics Centre in South Korea for KRW135bn (S$153.8m). The property spans over 70,400sqm in total GFA on ~56,200sqm of freehold land, with two blocks of 3-storey dry warehouses that were completed in 2019. The property is equipped with high quality building specifications, including strong floor loading of over 20kg newton psm, high floor-to-ceiling height of 10-17m, large contiguous floor plates of up to 14,200sqm and a full sprinkler system. The Property was independently valued at KRW139.6bn as at 2Sep21The Property is strategically located in northern Yeoju, a newly established logistics hub situated northeast of the Yongin-Icheon market, which is the traditional logistics cluster in the Seoul Metropolitan Area. It is fully leased to one of South Korea’s largest online fashion platforms and a domestic third-party logistics service provider. The acquisition will raise MLT’s e-commerce revenue exposure in South Korea from 24% to 31%. It comes with a WALE (by NLA) of ~3.1yrs and built-in annual rent escalationsThe acquisition is estimated to generate a NPI yield of 4.2% based on the property purchase price and is expected to be DPU accretive. Assuming the acquisition is 100% debt funded, MLT’s aggregate gearing ratio will be ~40.3%. The acquisition is expected to be completed by 4Q21. Upon completion, MLT’s total portfolio will comprise 167 properties with AUM of S$11.1bn.

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> to acquire logistics facility in Malaysia with 5.4% NPI yield; Accretive to both NAV and DPU</h3><ul><li>MLT has proposed to acquire Mapletree Logistics Hub Shah Alam, Malaysia at a purchase price of RM404.8m (S$130.2m), 0.05% discount to an independent valuation of RM405m. The total transaction costs will be S$132.2m, comprising the acquisition price of ~RM404.8m (S$130.2), acquisition fee of ~S$0.7m and other fees and expenses of ~S$1.3m</li><li>The freehold property is s located in the free trade zone of the Port of Tanjung Pelepas, Southern Johor. Spanning a total NLA of c.131,986sqm, the property is comprised a block of single-storey warehouse with mezzanine floor offices and two blocks of double-storey ramp-up warehouses with mezzanine floor offices and other ancillary buildings. The property has a diversified tenant base comprising end-users as well as 3PLs leasing the premises as their Southeast Asian distribution hub for predominantly consumer goods, including subsidiaries of Decathlon and Maersk. The occupancy rate stands at 95% as at 30Jun21 with a WALE of ~3.5 years with built in rental escalation</li><li>The acquisition is expected to generate an initial NPI yield of 5.4% (based on purchase price) and will be accretive on NAV and distribution level. It will funded through a combination of the proceeds from the Equity Fund Raising, a drawdown of debt facilities and the issuance of the Senior ABS MTNs. Upon completion, MLT’s aggregate leverage ratio is estimated to be c.39.0%.</li></ul>

SingaporeMapletree Logistics Trust (MLT SP) to acquire logistics facility in Malaysia with 5.4% NPI yield; Accretive to both NAV and DPUMLT has proposed to acquire Mapletree Logistics Hub Shah Alam, Malaysia at a purchase price of RM404.8m (S$130.2m), 0.05% discount to an independent valuation of RM405m. The total transaction costs will be S$132.2m, comprising the acquisition price of ~RM404.8m (S$130.2), acquisition fee of ~S$0.7m and other fees and expenses of ~S$1.3mThe freehold property is s located in the free trade zone of the Port of Tanjung Pelepas, Southern Johor. Spanning a total NLA of c.131,986sqm, the property is comprised a block of single-storey warehouse with mezzanine floor offices and two blocks of double-storey ramp-up warehouses with mezzanine floor offices and other ancillary buildings. The property has a diversified tenant base comprising end-users as well as 3PLs leasing the premises as their Southeast Asian distribution hub for predominantly consumer goods, including subsidiaries of Decathlon and Maersk. The occupancy rate stands at 95% as at 30Jun21 with a WALE of ~3.5 years with built in rental escalationThe acquisition is expected to generate an initial NPI yield of 5.4% (based on purchase price) and will be accretive on NAV and distribution level. It will funded through a combination of the proceeds from the Equity Fund Raising, a drawdown of debt facilities and the issuance of the Senior ABS MTNs. Upon completion, MLT’s aggregate leverage ratio is estimated to be c.39.0%.

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-logistics-trust" target="_blank" data-smartkarma-citation="entities:16035" rel="noopener">Mapletree Logistics Trust (MLT SP)</a> to acquire Australian cold storage facility at 4.3% yield; Fully-funded by debt, DPU accretive</h3><ul><li>MLT proposed an acquisition of a cold storage facility at 5-17 Leslie Road and 6-10 Pipe Road in Melbourne, Victoria, Australia for A$42.8m (S$42.8m) vs. independent valuation of A$43.0m as at 21Jun21. Including A$3.1m transaction-related costs, the total transaction costs will be A$45.9m</li><li>The freehold property is located within the inner west precinct of Melbourne, an established industrial and logistics region in the vicinity of MLT’s existing four properties. Spanning a total NLA of 14,747sqm, the property is comprised of five blocks of cold and freezer warehouse (77% of NLA), ambient warehouse, office and other amenities. The property is 100% leased to Austco Polar Cold Storage, a wholly-owned subsidiary of ASX-listed Wingara AG Limited, for the next 13 years with annual rent escalations</li><li>The asset is expected to generate an initial NPI yield of 4.3% (based on purchase price) and will be accretive at the distribution level. The acquisition will be 100% funded by debt and is expected to be completed by 3Q22. Upon completion and including the proposed acquisition of 9 Changi South Street 2 (announced on 9Jul21), MLT’s aggregate leverage ratio is estimated to rise to 38.7%</li><li>Following this Acquisition, MLT will have five logistics assets in Melbourne and a total of 13 assets in AUS with over A$870m in AUM (8.5% of AUM from 8.0%) and 352,400sqm of leasable space. Contribution from AUS will increase from 7.4% of GRI to 8.5%</li><li>MLT is currently trading at 4.2% FY22E yield and 1.6x P/B.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/223/820/original/image_45736139921629083801234.png?1629083809" class="editor-image img-responsive" data-smartkarma-image-id="223820"></figure>

SingaporeMapletree Logistics Trust (MLT SP) to acquire Australian cold storage facility at 4.3% yield; Fully-funded by debt, DPU accretiveMLT proposed an acquisition of a cold storage facility at 5-17 Leslie Road and 6-10 Pipe Road in Melbourne, Victoria, Australia for A$42.8m (S$42.8m) vs. independent valuation of A$43.0m as at 21Jun21. Including A$3.1m transaction-related costs, the total transaction costs will be A$45.9mThe freehold property is located within the inner west precinct of Melbourne, an established industrial and logistics region in the vicinity of MLT’s existing four properties. Spanning a total NLA of 14,747sqm, the property is comprised of five blocks of cold and freezer warehouse (77% of NLA), ambient warehouse, office and other amenities. The property is 100% leased to Austco Polar Cold Storage, a wholly-owned subsidiary of ASX-listed Wingara AG Limited, for the next 13 years with annual rent escalationsThe asset is expected to generate an initial NPI yield of 4.3% (based on purchase price) and will be accretive at the distribution level. The acquisition will be 100% funded by debt and is expected to be completed by 3Q22. Upon completion and including the proposed acquisition of 9 Changi South Street 2 (announced on 9Jul21), MLT’s aggregate leverage ratio is estimated to rise to 38.7%Following this Acquisition, MLT will have five logistics assets in Melbourne and a total of 13 assets in AUS with over A$870m in AUM (8.5% of AUM from 8.0%) and 352,400sqm of leasable space. Contribution from AUS will increase from 7.4% of GRI to 8.5%MLT is currently trading at 4.2% FY22E yield and 1.6x P/B.

<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: 363.047px;"><p> </p></td><td style="width: 362.953px;"><p>MLT</p></td></tr><tr><td style="width: 363.047px;"><p>Period</p></td><td style="width: 362.953px;"><p>1Q22</p></td></tr><tr><td style="width: 363.047px;"><p>Gross Revenue (S$ m)</p></td><td style="width: 362.953px;"><p>163.7 (+23.7% YoY)</p></td></tr><tr><td style="width: 363.047px;"><p>NPI (S$ m)</p></td><td style="width: 362.953px;"><p>144.2 (+21.3% YoY)</p></td></tr><tr><td style="width: 363.047px;"><p>DPU (S$ c)</p></td><td style="width: 362.953px;"><p>2.161 (+5.7% YoY)</p></td></tr><tr><td style="width: 363.047px;"><p>NAV per Unit (S$)</p></td><td style="width: 362.953px;"><p>1.32</p></td></tr><tr><td style="width: 363.047px;"><p>P/B (x)</p></td><td style="width: 362.953px;"><p>1.59</p></td></tr><tr><td style="width: 363.047px;"><p>Occupancy (%)</p></td><td style="width: 362.953px;"><p>97.8</p></td></tr><tr><td style="width: 363.047px;"><p>Reversion (%)</p></td><td style="width: 362.953px;"><p>2.2</p></td></tr><tr><td style="width: 363.047px;"><p>Gearing (%)</p></td><td style="width: 362.953px;"><p>38.2</p></td></tr><tr><td style="width: 363.047px;"><p>Cost of Debt (%)</p></td><td style="width: 362.953px;"><p>2.2</p></td></tr><tr><td style="width: 363.047px;"><p>1 Yr Fwd Yield (%)</p></td><td style="width: 362.953px;"><p>4.14</p></td></tr><tr><td style="width: 363.047px;"><p>Debt Hedged (%)</p></td><td style="width: 362.953px;"><p>75%</p></td></tr><tr><td style="width: 363.047px;"><p>Target Price</p></td><td style="width: 362.953px;"><p>NA</p></td></tr><tr><td style="width: 363.047px;"><p>Rating</p></td><td style="width: 362.953px;"><p>NA</p></td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) MLTPeriod1Q22Gross Revenue (S$ m)163.7 (+23.7% YoY)NPI (S$ m)144.2 (+21.3% YoY)DPU (S$ c)2.161 (+5.7% YoY)NAV per Unit (S$)1.32P/B (x)1.59Occupancy (%)97.8Reversion (%)2.2Gearing (%)38.2Cost of Debt (%)2.21 Yr Fwd Yield (%)4.14Debt Hedged (%)75%Target PriceNARatingNA

ASEAN Builder's Scoop (21Jul21) - MLT Steady Occ and Reversions Support 1.6x P/B

Singapore

Mapletree Industrial Trust is a Singapore-focused real estate investment trust with a large and diversified portfolio of industrial properties. The Trust invests in a diverse portfolio of industrial properties with the primary objective of achieving an attractive level of return from rental income and for long-term capital growth.

Mapletree Pan Asia Commercial Trust is a Singapore-focused real estate investment trust. The Trust invests on a long-term basis, directly or indirectly, in a diversified portfolio of income-producing real estate used primarily for office and/or retail purposes, whether wholly or partially, as well as real estate-related assets.

Mapletree Pan Asia Commercial Trust (MCT SP)

Frasers Centrepoint Trust is a retail real estate investment trust focused on growing unitholder value through asset management, financial management and strategic investments.  The trust invests in retail properties in Singapore and overseas.

FLT offers investors an opportunity to invest in logistics and industrial real estate assets strategically located within major logistics and industrial markets of Australia, Germany and the Netherlands.

Frasers Logistics & Commercial Trust (FLT SP)

Keppel DC REIT is Asia's first pure-play data centre REIT listed on the Singapore Exchange. Keppel DC REIT's investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate related assets.

Suntec Real Estate Investment Trust is a commercial real estate investment trust. The Trust invests in income-producing real estate that is primarily used for retail and/or office purposes.

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.

SPH REIT is a Singapore-based REIT established principally to invest, directly or indirectly, in a portfolio of income-producing real estate which is used primarily for retail purposes in Asia-Pacific, as well as real estate-related assets.

ESR-LOGOS Real Estate Investment Trust (“ESR-LOGOS REIT”) is a leading New Economy and future-ready Asia Pacific S-REIT. Listed on the Singapore Exchange Securities Trading Limited since 25 July 2006, ESR-LOGOS REIT invests in quality income-producing industrial properties in key gateway markets.

As at 28 April 2022, ESR-LOGOS REIT holds interests in a diversified portfolio of logistics properties, high-specifications industrial properties, business parks and general industrial properties with total assets of approximately S$5.5 billion. Its portfolio comprises 84 properties located across the developed markets of Singapore (63 assets) and Australia (21 assets), with a total gross floor area of approximately 2.4 million sqm, as well as investments in three property funds in Australia. ESR-LOGOS REIT is also a constituent of the FTSE EPRA Nareit Global Real Estate Index. 

ESR-LOGOS REIT is managed by ESR-LOGOS Funds Management (S) Limited (the “Manager”) and sponsored by the ESR Group (“ESR”). The Manager is owned by ESR (67.3%), Shanghai Summit Pte. Ltd. (25.0%), and Mitsui & Co., Ltd (7.7%), respectively.

For further information on ESR-LOGOS REIT, please visit www.esr-logosreit.com.sg.

Parkway Life Real Estate Investment Trust (Parkway Life REIT) invests primarily in income producing real estate and real estate related assets in the Asia Pacific region. The trust's real estate is used primarily for healthcare and healthcare-related purposes.

GPT Group is an active owner and manager of a diversified portfolio of Australian retail, office and industrial property assets. The Group's property portfolio include the MLC Centre, Australia Square, Rouse Hill Town Centre and Melbourne Central.

Vicinity Centres retails asset and property management services. The Company offers a retail property investment and services organization involved in the ownership, management, and development of retail properties. The Company operates shopping centers across Australia.

Dexus provides real estate services. The Company manages and invests in a portfolio of diversified properties, including office and industrial buildings, retail shopping centers, and car parks. Dexus serves customers in Australia and New Zealand.

Japan Metropolitan Fund Investment Corporation operates real estate investment trust. The Company provides securitized real estate investment, real estate leasing, shopping centers investment, and other services. Japan Metropolitan Fund Investment provides its services throughout Japan.

Japan Metropolitan Fund Investment Corporation (8953 JP)

Japan Metropolitan Fund Investment Corporation

Ryman Hospitality Properties, Inc. is a real estate investment trust specializing in group-oriented, destination hotel assets in urban and resort markets.

Sabra Health Care REIT, Inc. is a real estate investment trust.  The trust owns nursing homes, rehabilitation centers, assisted living facilities, and independent living centers.

Nippon Building Fund Inc. is a real estate investment trust (REIT) which mainly invests in real estate and securitized real estate products. Properties are mainly Business offices and are located in Tokyo Major 5 wards and Kanto area.

Independence Realty Trust, Inc. is an externally managed and advised apartment REIT focused on acquiring and owning well-located garden-style and mid-rise apartment properties throughout the United States.

Kite Realty Group Trust is a full-service, vertically integrated real estate company focused primarily on the development, construction, acquisition, ownership and operation of neighborhood and community shopping centers.  The company own properties in Indiana, Florida, Texas, Washington, Oregon, New Jersey, Illinois and Georgia.

Charter Hall Group invests in and develops real estate.  The Company manages real estate investment funds and develops commercial, residential, and industrial properties.

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 (26Oct21)

KREIT healthy collections; KDCREIT boosted by acquisitions; MLT steady as she goes; CLCT record high NPI; ALLT EFR effect dilutes DPU; MEG raises...

SCCM Asia Research

ASEAN Builder's Scoop (21Oct21)

MLT acquires South Korean logistics at 4.2% yield; AIT completes stage 1 of Mumbai DC; OHL provides loan to Pindan Group; MY-SG RTS may revive...

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ASEAN Builder's Scoop (23Aug21)

MLT acquires MY logistics @ 5.4% yield; The Executive Centre new Co-working space at ORQ; JFC injects P3.7bn into DD industrial subs; RCR IPO...

SCCM Asia Research

ASEAN Builder's Scoop (16Aug21)

MLT buys Aus cold storage facility; CIT readies ~2,000 resi launch pipeline; Jul21 new home sales surged 77% MoM; RCR gets IPO listing nod;...

SCCM Asia Research

ASEAN Builder's Scoop (21Jul21) - MLT Steady Occ and Reversions Support 1.6x P/B

MLT steady occ and reversions support 1.6x P/B; DASIN extends credit facilities for 5mo; FIRT exits South Korean market; LMRT extends malls...

SCCM Asia Research

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