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/frasers-property-ltd" target="_blank" data-smartkarma-citation="entities:1670" rel="noopener">Frasers Property Ltd (FPL SP)</a> establishes Frasers Property Capital to focus on finding capital partners for investments</li><li><a href="https://www.smartkarma.com/entities/united-hampshire-us-reit" target="_blank" data-smartkarma-citation="entities:28874" rel="noopener">United Hampshire US REIT (UHU SP)</a> is confident in refinancing its short-term debt maturing in FY23</li><li>Relocation of Paya Lebar Air Base could increase housing supply with more en-bloc sales and SERS</li></ul>

Frasers Property Ltd (FPL SP) establishes Frasers Property Capital to focus on finding capital partners for investmentsUnited Hampshire US REIT (UHU SP) is confident in refinancing its short-term debt maturing in FY23Relocation of Paya Lebar Air Base could increase housing supply with more en-bloc sales and SERS

ASEAN Builder's Scoop (23Aug22) - FPL Establishes FP Capital to Find Capital Partners

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<a href="https://www.smartkarma.com/entities/ec-world-reit" target="_blank" data-smartkarma-citation="entities:22842" rel="noopener">EC World Reit (ECWREIT SP)</a> 2Q22 DPU -9.5% YoY; Hit by the pre-termination compensation, though top-line remains stable</li>
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<a href="https://www.smartkarma.com/entities/sasseur-reit" target="_blank" data-smartkarma-citation="entities:26807" rel="noopener">Sasseur REIT (SASSR SP)</a> 2Q22 DPU -1.6% YoY; Weak performance of variable rental income though occupancy improving</li>
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<a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889" rel="noopener">Cromwell European REIT (CERT SP)</a> 1H22 DPU +2.3% YoY; Weaknesses in I&amp;L reversions, overall portfolio metrics remain stable</li>
</ul>



EC World Reit (ECWREIT SP) 2Q22 DPU -9.5% YoY; Hit by the pre-termination compensation, though top-line remains stable

Sasseur REIT (SASSR SP) 2Q22 DPU -1.6% YoY; Weak performance of variable rental income though occupancy improving

Cromwell European REIT (CERT SP) 1H22 DPU +2.3% YoY; Weaknesses in I&amp;L reversions, overall portfolio metrics remain stable


ASEAN Builder's Scoop (12Aug22) - ECWREIT Steady Top-Line Due to Master Leases

<ul><li>Private home prices +3.5% QoQ in 2Q22; More completions in 2022-23 could help ease price rise</li><li>AMO Residence condo in Ang Mo Kio sold over 98% on its launch day</li><li>Office rents +2.4% QoQ in 2Q22; Limited supply can offset potentially slowing demand for rest of 2022</li></ul>

Private home prices +3.5% QoQ in 2Q22; More completions in 2022-23 could help ease price riseAMO Residence condo in Ang Mo Kio sold over 98% on its launch dayOffice rents +2.4% QoQ in 2Q22; Limited supply can offset potentially slowing demand for rest of 2022

ASEAN Builder's Scoop (25Jul22) - Private Home Prices and Rents Soar in 2Q22

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 Integrated Commercial Trust / Equity Bottom-Up

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 <div class='content-caption'>REIT Watch 27 Jun</div>
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In Q2 2022 to date, the Straits Times Index (STI) has generated an 8 per cent decline in total returns, while the FTSE Developed Index declined 16 per cent. The iEdge S-Reit Index maintained resilience with a 2 per cent decline in total returns, while the FTSE EPRA Nareit Developed Index (a benchmark for global Reits) declined 15 per cent.

For the quarter-to-date, Singapore stocks have seen S$1.05 billion of net institutional outflows, reducing the 2022 year-to-date (YTD) net institutional inflow to S$74 million.

The technology sector has continued to weigh on global stocks, with hospitality and real estate also lagging. Banks, technology, and Reits have now booked the most net institutional outflows across the sectors in 2022 YTD. In the YTD, STI’s total returns have maintained at 1 per cent and iEdge S-Reit Index has declined 0.8 per cent. The FTSE EPRA Nareit Developed Index declined 18 per cent in the YTD.

From an SGX Research market update last week, the 20 stocks among the most actively traded Singapore stocks that booked the highest net institutional inflows in the YTD proportionate to their current market capitalisation included 5 S-Reits. These 20 stocks averaged 22 per cent total returns in the YTD. The 5 S-Reits were Ascott Residence Trust, Suntec Reit, CapitaLand Integrated Commercial Trust, Frasers Hospitality Trust, and Keppel Reit. These 5 S-Reits averaged 18 per cent total returns in the YTD and saw combined net institutional inflows exceeding S$300 million.

Over the past 5 trading sessions through to Jun 23, institutional investors were net buyers of Singapore stocks with S$116 million of net inflows, following S$166 million in net outflows for the preceding 5 sessions. The top 5 stocks with the highest net institutional inflows were DBS, Singtel, CapitaLand Investment, Digital Core Reit and Hongkong Land.

Digital Core Reit in its Q1 2022 business update reported a 2 per cent increase in distributable income versus its IPO forecast. In April 2022, Digital Core Reit’s fifth-largest customer, a privately held IT service provider in Toronto, filed for bankruptcy protection. The Reit manager expects to be able to back-fill this capacity, given the tight market conditions in Toronto and updated that the customer event is not expected to impact distribution per unit.

In terms of director acquisitions over the past week, United Hampshire US Reit (UHReit) Management’s non-independent non-executive director David Tuvia Goss on Jun 20 and 22 acquired 500,000 units of UHReit : ODBU 0% at an average price of 60.9 US cents per unit.

UHReit is the first US grocery-anchored shopping centre and self-storage Reit to list in Singapore, and back in May reported Q1 2022 distributable income of US$8.1 million, 7.9 per cent higher than Q1 2021. UHReit completed its inaugural acquisitions of Colonial Square on Nov 12, 2021 and Penrose Plaza on Nov 24, 2021, with both acquisitions contributing positively to Q1 2022 distributable income.

REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/five-s-reits-drawing-net-institutional-inflows-in-2022-year-to-date">read </a>the original version.
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    REIT Watch 27 Jun


In Q2 2022 to date, the Straits Times Index (STI) has generated an 8 per cent decline in total returns, while the FTSE Developed Index declined 16 per cent. The iEdge S-Reit Index maintained resilience with a 2 per cent decline in total returns, while the FTSE EPRA Nareit Developed Index (a benchmark for global Reits) declined 15 per cent.

For the quarter-to-date, Singapore stocks have seen S$1.05 billion of net institutional outflows, reducing the 2022 year-to-date (YTD) net institutional inflow to S$74 million.

The technology sector has continued to weigh on global stocks, with hospitality and real estate also lagging. Banks, technology, and Reits have now booked the most net institutional outflows across the sectors in 2022 YTD. In the YTD, STI’s total returns have maintained at 1 per cent and iEdge S-Reit Index has declined 0.8 per cent. The FTSE EPRA Nareit Developed Index declined 18 per cent in the YTD.

From an SGX Research market update last week, the 20 stocks among the most actively traded Singapore stocks that booked the highest net institutional inflows in the YTD proportionate to their current market capitalisation included 5 S-Reits. These 20 stocks averaged 22 per cent total returns in the YTD. The 5 S-Reits were Ascott Residence Trust, Suntec Reit, CapitaLand Integrated Commercial Trust, Frasers Hospitality Trust, and Keppel Reit. These 5 S-Reits averaged 18 per cent total returns in the YTD and saw combined net institutional inflows exceeding S$300 million.

Over the past 5 trading sessions through to Jun 23, institutional investors were net buyers of Singapore stocks with S$116 million of net inflows, following S$166 million in net outflows for the preceding 5 sessions. The top 5 stocks with the highest net institutional inflows were DBS, Singtel, CapitaLand Investment, Digital Core Reit and Hongkong Land.

Digital Core Reit in its Q1 2022 business update reported a 2 per cent increase in distributable income versus its IPO forecast. In April 2022, Digital Core Reit’s fifth-largest customer, a privately held IT service provider in Toronto, filed for bankruptcy protection. The Reit manager expects to be able to back-fill this capacity, given the tight market conditions in Toronto and updated that the customer event is not expected to impact distribution per unit.

In terms of director acquisitions over the past week, United Hampshire US Reit (UHReit) Management’s non-independent non-executive director David Tuvia Goss on Jun 20 and 22 acquired 500,000 units of UHReit : ODBU 0% at an average price of 60.9 US cents per unit.

UHReit is the first US grocery-anchored shopping centre and self-storage Reit to list in Singapore, and back in May reported Q1 2022 distributable income of US$8.1 million, 7.9 per cent higher than Q1 2021. UHReit completed its inaugural acquisitions of Colonial Square on Nov 12, 2021 and Penrose Plaza on Nov 24, 2021, with both acquisitions contributing positively to Q1 2022 distributable income.

REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Five S-Reits drawing net institutional inflows in 2022 year to date

<ul><li><a href="https://www.smartkarma.com/entities/aims-amp-capital-industrial" target="_blank" data-smartkarma-citation="entities:933" rel="noopener">AIMS APAC REIT (AAREIT SP)</a> extends target date for 315 Alexandra Road to 1Jul22</li><li><a href="https://www.smartkarma.com/entities/united-hampshire-us-reit" target="_blank" data-smartkarma-citation="entities:28874" rel="noopener">United Hampshire US REIT (UHU SP)</a> acquires US$85.7m grocery-anchored freehold asset; DPU accretive by ~2.1%</li><li><a href="https://www.smartkarma.com/entities/mapletree-industrial-trust" target="_blank" data-smartkarma-citation="entities:40" rel="noopener">Mapletree Industrial Trust (MINT SP)</a> divests Michigan’s Data Centre for US$10m</li></ul>

AIMS APAC REIT (AAREIT SP) extends target date for 315 Alexandra Road to 1Jul22United Hampshire US REIT (UHU SP) acquires US$85.7m grocery-anchored freehold asset; DPU accretive by ~2.1%Mapletree Industrial Trust (MINT SP) divests Michigan’s Data Centre for US$10m

ASEAN Builder's Scoop (10Jun22) - AAREIT Extends 315 Alexandra Target Date to 1Jul22

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.

Sabana Industrial Real Estate Investment Trust is a real estate investment trust. The Trust focuses on investments in income-producing real estate used for industrial purposes in Asia, as well as real estate-related assets, in line with Sabana investment principles.

Oxley Holdings Ltd. develops real estate. The Company develops residential and commercial projects in accessible locations. Oxley also develops light industrial buildings that include swimming pools and other recreational amenities.

Yoma Strategic Holdings Limited develops real estate; sells private residential properties; and designs, constructs and project manages real estate developments in Myanmar and the People's Republic of China.

Bund Center Investment, Ltd. invests in commercial property in China. The Company owns office buildings, hotels, and retail malls.

Hiap Hoe Limited is an integrated property developer. The Company develops luxury and mid-tier residential properties. Hiap Hoe also seeks out civil engineering and construction contracts but its main focus is developing its own residential properties.

IREIT Global is the first Singapore-listed real estate investment trust with the investment strategy of principally investing, directly or indirectly, in a portfolio of income-producing real estate in Europe which is used primarily for office, retail and industrial (including logistics) purposes, as well as real estate-related assets.

IREIT Global’s current portfolio comprises 5 freehold office properties in Germany, 5 freehold office properties in Spain and 27 freehold retail properties in France, with a total lettable area of approximately 384,000 sqm and a portfolio valuation of approximately €974.9 million.

IREIT Global is managed by IREIT Global Group Pte. Ltd., which is jointly owned by Tikehau Capital and City Developments Limited ("CDL"). Tikehau Capital is a global alternative asset management group listed in France, while CDL is a leading global real estate company listed in Singapore.

Tuan Sing Holdings Limited an investment holding company with interest mainly in property development, property investment and hotel ownership.

Elite Commercial REIT (“Elite REIT”) is a Singapore real estate investment trust established with the investment strategy of principally investing, directly or indirectly, in commercial real-estate related assets in the United Kingdom (“UK”). Elite REIT is the only UK REIT listed in Pound sterling on the Singapore Exchange.

Elite REIT’s portfolio (“Portfolio”) comprises predominantly freehold properties strategically located mainly in town centres, and near amenities and transportation nodes. The Portfolio offers a stable government-backed income stream with over 99% of the gross rental income derived from the UK Government, backed by AA-rated sovereign credit strength. The leases are on triple net basis(1) and Elite REIT is one of the largest provider of critical social infrastructure to the Department for Work & Pensions (“DWP”) and other UK Government departments. The DWP is the UK’s largest public service department that is responsible for welfare, pensions and child maintenance, serving over 20 million claimants. The Portfolio is part of the crucial social infrastructure through which the DWP provides services to local communities.

Note:
1.	Known as a full repairing and insuring lease, the responsibility for the repair of the external and internal parts as well as the structure of the property is placed with the tenant for occupied assets.

Immobiliare Grande Distribuzione SIIQ SpA (known as IGD SIIQ) invests in and operates Italian commercial real estate. The Company owns shopping malls and supermarkets.

Dexus Convenience Retail REIT operates as a real estate investment trust. The Company invests in service stations and convenience retail stores. Dexus Convenience serves customers in Australia.

Hektar Real Estate Investment Trust acquires and invests in income producing real estate in Malaysia.

Hektar Real Estate Investment Trust (HEKT MK)

Langham Hospitality Investments and Langham Hospitality Investment Limited is a stapled entity. The Company primarily owns and invests in a portfolio of hotels in Asia.

TOKYO RAKUTENCHI CO., LTD. leases real estate properties mainly in Kinshi-cho, Tokyo.  The Company also operates restaurants, saunas, bowling alleys, game centers, karaoke places, and theaters.

Fubon No 1 Real Estate Investment Trust is a property trust established in Taiwan as a standalone unit trust fund and constituted by a trust deed. Fubon No 1 REIT owns and leases a portfolio of office properties in Taipei.

PT Lippo Karawaci Tbk is a diversified and integrated property group and is involved in townships, residential homes, hospitals, hotels, retail malls and industrial estate development and management.  PT Lippo Karawaci through its subsidiaries is also engaged in property and REIT management.

Beijing North Star Company Limited develops, leases, and invests in properties. The Company operates shopping centers, hotels, restaurants, and recreation businesses.  The Company also provides property management.

Shahe Industry Co., Ltd. develops and markets residential buildings in Shenzhen, China.  The properties under development include the Shiji Village, the Luming Garden, and Baoruixuan.

L.M. Development Co., Ltd. manufactures and markets electronic products. The Company's products include desktop CD-ROM drives, portable CD drives, digital cameras, copy towers, and CD recordable (CD-R) and CD rewritable (CD-RW).

United Hampshire US REIT operates as a real estate investment trust. The Company owns and operates shopping, storage, grocery, and necessity-based retail properties.

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United Hampshire US REIT (UHU SP)

ASEAN Builder's Scoop (23Aug22) - FPL Establishes FP Capital to Find Capital Partners

UHU confident in refinancing short-term debt; More housing supply from PLAB relocation; DMCI Homes reports project updates; Phils BSP sees economy...

SCCM Asia Research

ASEAN Builder's Scoop (12Aug22) - ECWREIT Steady Top-Line Due to Master Leases

SASSR hit by weak variable income; CERT weakness in I&L reversions; IREIT low gearing opportunities; UHU occupancies trending up; PWON reached 44%...

SCCM Asia Research

ASEAN Builder's Scoop (25Jul22) - Private Home Prices and Rents Soar in 2Q22

AMO Residence >98% sold on launch day; Office rents +2.4% QoQ in 2Q22, retail rents remain subdued; Hotel room rates +63% YoY in Jun22; HDB resale...

SCCM Asia Research

REIT Watch - Five S-Reits drawing net institutional inflows in 2022 year to date

In Q2 2022 to date, the Straits Times Index (STI) has generated an 8 per cent decline in total returns, while the FTSE...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (10Jun22) - AAREIT Extends 315 Alexandra Target Date to 1Jul22

UHU buys freehold asset for US$85.7m; MINT divests MI data center for US$10m; TCC seeks loan to privatize FHT; Cape Royale Sentosa up for sale from...

SCCM Asia Research

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