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.

Event-Driven

Mapletree North Asia Commercial Trust / Event-Driven

<ul>
<li>Quarz Capital’s <a href="https://www.bettermnact.com/_files/ugd/517105_02ef42e240d344b9a13b20fce5b8c5d1.pdf" target="_blank" rel="noopener">open letter</a> urges <a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127:1" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a>’s (MNACT) board to protect unitholders’ interest and negotiate for a higher offer from <a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106:1" rel="noopener">Mapletree Commercial Trust (MCT SP)</a>.</li>
<li>MCT has three options – keep the terms unchanged, improve the terms or support MNACT's board benchmarking the merger vs alternative transactions.   </li>
<li>MCT’s likely move is to keep terms unchanged and seek shareholder approval. MNACT's board can appease unitholders by exploring alternative transactions.   </li>
</ul>


Quarz Capital’s open letter urges Mapletree North Asia Commercial Trust (MAGIC SP)’s (MNACT) board to protect unitholders’ interest and negotiate for a higher offer from Mapletree Commercial Trust (MCT SP).
MCT has three options – keep the terms unchanged, improve the terms or support MNACT's board benchmarking the merger vs alternative transactions.   
MCT’s likely move is to keep terms unchanged and seek shareholder approval. MNACT's board can appease unitholders by exploring alternative transactions.   


MCT and MNACT’s Options for Dealing with Quarz’s Campaign

<ul>
<li>Each <a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127:1" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a>/MNACT unitholder will receive either a scrip-only or the cash-and-scrip offer worth S$1.1949 per MNACT unit, a 7.6% premium to the last close price.</li>
<li>The proposed merger provides <a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106:1" rel="noopener">Mapletree Commercial Trust (MCT SP)</a> unitholders with meaningful geographic diversification through a DPU and NAV accretive transaction.   </li>
<li>MNACT unitholders will receive an attractive consideration in terms of P/NAV and gross exchange ratio. Both unitholders will benefit from the enlarged REIT’s higher free float and growth potential. </li>
</ul>


Each Mapletree North Asia Commercial Trust (MAGIC SP)/MNACT unitholder will receive either a scrip-only or the cash-and-scrip offer worth S$1.1949 per MNACT unit, a 7.6% premium to the last close price.
The proposed merger provides Mapletree Commercial Trust (MCT SP) unitholders with meaningful geographic diversification through a DPU and NAV accretive transaction.   
MNACT unitholders will receive an attractive consideration in terms of P/NAV and gross exchange ratio. Both unitholders will benefit from the enlarged REIT’s higher free float and growth potential. 


Mapletree Commercial Trust’s Proposed Merger with Mapletree North Asia Commercial Trust

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

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 <div class='content-caption'>Top 10 performing SREITs since Nov 1, 2021</div>
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Global Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron variant.

Similarly, the 3 sessions saw the iEdge S-Reit Index shave off 3.8 per cent in total returns, ending November with a 2.4 per cent decline. 
The top five performers over the month of November were firstly, S-REITs with healthcare assets – First REIT (12.2 per cent in total returns) and ParkwayLife REIT (6.6 per cent) – and secondly, S-REITs with assets located in China – Sasseur REIT (4.7 per cent), EC World REIT (3.1 per cent) and BHG Retail REIT (2.9 per cent). 
As uncertainty over the Omicron variant eased gradually, the iEdge S-Reit Index regained 1.2 per cent over the first 7 sessions of December, bringing its total returns since the start of November to a decline of 1.2 per cent.

S-Reits with healthcare and China-based assets continued to be the top performers over the extended period from the start of November to Dec 9, 2021. 
These S-REITs were: First REIT (18.0 per cent in total returns), BHG Retail REIT (15.4 per cent), ParkwayLife REIT (8.9 per cent), Sasseur REIT (4.7 per cent) and Mapletree North Asia Commercial Trust (4.5 per cent). 
First Reit, in its third quarter business update ended Sep 30, 2021, noted that it continued to see performance stabilising, following the restructuring of the master lease agreements for 14 Indonesia hospitals in January 2021 and its recapitalisation efforts in Q12021.

Last week, the trust also unveiled its 2.0 Growth Strategy, which includes diversifying into developed markets, strengthening of capital structure, reshaping of portfolio for capital-efficient growth as well as a pivoting to ride megatrends like ESG (environmental, social and governance). 
In line with its 2.0 Growth Strategy, First REIT announced the proposed acquisition of 12 nursing homes in Japan from its sponsor, OUE Lippo Healthcare for JPY 24.2 billion. 
Post-acquisition, First Reit will increase its exposure to developed markets, from 3.6 per cent of its asset value as at H12021, to 27.1 per cent on a pro forma basis.

Sasseur Reit declared distribution per unit (DPU) of 1.831 Singapore cents for Q32021, an increase of 13.4 per cent year on year.

The Reit manager noted that despite strict government regulations, the Reit's outlet sales grew 12.0 per cent quarter on quarter to 996.6 million yuan.

For the 9-month period ended Sep 30, 2021, Sasseur Reit's four outlets registered total sales of 3.02 billion yuan, representing an increase of 21.8 per cent compared to a year ago.

Similarly, EC World Reit announced higher DPU of 1.662 Singapore cents for Q32021, an increase of 19.7 per cent year on year.

Four out of EC World Reit's portfolio of 8 properties cater to the e-commerce logistics sector. The occupancy rate of its Wuhan Meiluote property increased from 79.4 per cent to 84.5 per cent, as it secured a 3-month lease starting Oct 1, 2021, in anticipation of the annual Singles Day sales.

As at Oct 31, 2021, EC World Reit's portfolio occupancy is 99.2 per cent.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/pure-play-data-centre-digital-core-reit-to-start-trading-on-monday"> </a><a href="https://www.businesstimes.com.sg/companies-markets/s-reits-with-healthcare-and-china-assets-outshine-in-november">read </a>the original version.
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    Top 10 performing SREITs since Nov 1, 2021


Global Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron variant.

Similarly, the 3 sessions saw the iEdge S-Reit Index shave off 3.8 per cent in total returns, ending November with a 2.4 per cent decline.  
The top five performers over the month of November were firstly, S-REITs with healthcare assets – First REIT (12.2 per cent in total returns) and ParkwayLife REIT (6.6 per cent) – and secondly, S-REITs with assets located in China – Sasseur REIT (4.7 per cent), EC World REIT (3.1 per cent) and BHG Retail REIT (2.9 per cent).  
As uncertainty over the Omicron variant eased gradually, the iEdge S-Reit Index regained 1.2 per cent over the first 7 sessions of December, bringing its total returns since the start of November to a decline of 1.2 per cent.

S-Reits with healthcare and China-based assets continued to be the top performers over the extended period from the start of November to Dec 9, 2021.  
These S-REITs were: First REIT (18.0 per cent in total returns), BHG Retail REIT (15.4 per cent), ParkwayLife REIT (8.9 per cent), Sasseur REIT (4.7 per cent) and Mapletree North Asia Commercial Trust (4.5 per cent).  
First Reit, in its third quarter business update ended Sep 30, 2021, noted that it continued to see performance stabilising, following the restructuring of the master lease agreements for 14 Indonesia hospitals in January 2021 and its recapitalisation efforts in Q12021.

Last week, the trust also unveiled its 2.0 Growth Strategy, which includes diversifying into developed markets, strengthening of capital structure, reshaping of portfolio for capital-efficient growth as well as a pivoting to ride megatrends like ESG (environmental, social and governance).  
In line with its 2.0 Growth Strategy, First REIT announced the proposed acquisition of 12 nursing homes in Japan from its sponsor, OUE Lippo Healthcare for JPY 24.2 billion.  
Post-acquisition, First Reit will increase its exposure to developed markets, from 3.6 per cent of its asset value as at H12021, to 27.1 per cent on a pro forma basis.

Sasseur Reit declared distribution per unit (DPU) of 1.831 Singapore cents for Q32021, an increase of 13.4 per cent year on year.

The Reit manager noted that despite strict government regulations, the Reit's outlet sales grew 12.0 per cent quarter on quarter to 996.6 million yuan.

For the 9-month period ended Sep 30, 2021, Sasseur Reit's four outlets registered total sales of 3.02 billion yuan, representing an increase of 21.8 per cent compared to a year ago.

Similarly, EC World Reit announced higher DPU of 1.662 Singapore cents for Q32021, an increase of 19.7 per cent year on year.

Four out of EC World Reit's portfolio of 8 properties cater to the e-commerce logistics sector. The occupancy rate of its Wuhan Meiluote property increased from 79.4 per cent to 84.5 per cent, as it secured a 3-month lease starting Oct 1, 2021, in anticipation of the annual Singles Day sales.

As at Oct 31, 2021, EC World Reit's portfolio occupancy is 99.2 per cent.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits with healthcare and China assets outshine in November

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><a href="https://www.smartkarma.com/entities/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> FY21 results boosted by facilities management and logistics services; Maintains S$0.01 DPS</li><li><a href="https://www.smartkarma.com/entities/ireit-global" target="_blank" data-smartkarma-citation="entities:10596" rel="noopener">IREIT Global (IREIT SP)</a> to achieve 100% occupancy rate for Münster Campus by Sep22 onwards</li><li><a href="https://www.smartkarma.com/entities/daiwa-house-logistics-trust" target="_blank" data-smartkarma-citation="entities:35020" rel="noopener">Daiwa House Logistics Trust (DHLT SP)</a> IPO sees healthy demand; Listing on 3Dec</li></ul>

LHN Ltd (LHN SP) FY21 results boosted by facilities management and logistics services; Maintains S$0.01 DPSIREIT Global (IREIT SP) to achieve 100% occupancy rate for Münster Campus by Sep22 onwardsDaiwa House Logistics Trust (DHLT SP) IPO sees healthy demand; Listing on 3Dec

ASEAN Builder's Scoop (29Nov21) - LHN Boosted by Facilities and Logistics Services

Equity Capital Markets

Digital Core REIT / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/digital-core-reit" target="_blank" data-smartkarma-citation="entities:35145:1" rel="noopener">Digital Core REIT (DCREIT SP)</a> is the exclusive S-REIT sponsored by <a href="https://www.smartkarma.com/entities/digital-realty-trust-inc" target="_blank" data-smartkarma-citation="entities:13149:1" rel="noopener">Digital Realty Trust (DLR US)</a>. It is seeking to raise US$600 million at US$0.88 per unit. </li>
<li>In <a href="https://www.smartkarma.com/insights/digital-core-reit-ipo-reaching-for-the-clouds" target="_blank" data-smartkarma-citation="insights:61737" rel="noopener">Digital Core REIT IPO: Reaching for the Clouds</a>, we outlined its attractive value proposition.    </li>
<li>Cornerstones such as Blackrock, Fidelity, JP Morgan AM account for 61% of the offer. Our valuation analysis suggests that the IPO price of $0.88 per unit is reasonable.</li>
</ul>



Digital Core REIT (DCREIT SP) is the exclusive S-REIT sponsored by Digital Realty Trust (DLR US). It is seeking to raise US$600 million at US$0.88 per unit. 
In Digital Core REIT IPO: Reaching for the Clouds, we outlined its attractive value proposition.    
Cornerstones such as Blackrock, Fidelity, JP Morgan AM account for 61% of the offer. Our valuation analysis suggests that the IPO price of $0.88 per unit is reasonable.


Digital Core REIT IPO: Valuation Insights

Singapore

Sasseur Real Estate Investment Trust (“Sasseur REIT”) is the first outlet REIT listed in Asia. Sasseur REIT’s property portfolio comprises four outlets with an estimated appraised value of RMB 8.5 billion and net lettable area of 310,241 square metres. The outlets are strategically located in the high-growth cities of Chongqing, Hefei and Kunming in China and well-positioned to ride on the growth of the rising spending power of the Chinese middle class.

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Sasseur REIT (SASSR SP)

MCT and MNACT’s Options for Dealing with Quarz’s Campaign

MCT has three options – keep the terms unchanged, improve the terms or support MNACT's board benchmarking the merger vs alternative transactions.

Arun George

Mapletree Commercial Trust’s Proposed Merger with Mapletree North Asia Commercial Trust

The deal terms are attractive for MNACT unitholders. The deal is DPU/NAV accretive for MCT unitholders. The merger is likely to get approval from...

Arun George

REIT Watch - S-Reits with healthcare and China assets outshine in November

Global Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (29Nov21) - LHN Boosted by Facilities and Logistics Services

LHN boosted by Facilities and Logistics services; IREIT secures new leases at Munster Campus; DHLT IPO debuts on 3Dec; The Commodore sold 70% on...

SCCM Asia Research

Digital Core REIT IPO: Valuation Insights

Digital Core REIT is seeking to raise US$600 million at US$0.88 per unit. Our valuation analysis suggests that the IPO price of $0.88 per unit is...

Arun George

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