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>Feb22 retail sales down 3.4% YoY due to Feb21 CNY Spending; F&amp;B sales falls 0.6% YoY</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> extends divestment due-diligence period for a third time</li><li>Prime logistics properties displays continued strong growth in 1Q22, increasing 3% QoQ in 1Q22</li></ul>

Feb22 retail sales down 3.4% YoY due to Feb21 CNY Spending; F&amp;B sales falls 0.6% YoYUnited Hampshire US REIT (UHU SP) extends divestment due-diligence period for a third timePrime logistics properties displays continued strong growth in 1Q22, increasing 3% QoQ in 1Q22

ASEAN Builder's Scoop (6Apr22) - Feb22 Retail Sales Down 1.2% MoM

<ul><li><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> 4Q21 DPU +7.7% YoY; Driven largely by absence of DI retention and strengthening RMB</li><li><a href="https://www.smartkarma.com/entities/ara-us-hospitality-trust" target="_blank" data-smartkarma-citation="entities:28048" rel="noopener">ARA US Hospitality Trust (ARAUS SP)</a> 2H21 DPU of US$0.36c declared; Road to recovery continues</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> 2H21 DPU +0.7% YoY; Portfolio valuation rose 3.7% YoY, divesting of 2 Self Storage properties</li></ul>

EC World Reit (ECWREIT SP) 4Q21 DPU +7.7% YoY; Driven largely by absence of DI retention and strengthening RMBARA US Hospitality Trust (ARAUS SP) 2H21 DPU of US$0.36c declared; Road to recovery continuesUnited Hampshire US REIT (UHU SP) 2H21 DPU +0.7% YoY; Portfolio valuation rose 3.7% YoY, divesting of 2 Self Storage properties

ASEAN Builder's Scoop (24Feb22) - ECWREIT Driven by Absence of DI Retention

<ul><li>Frasers Logistics &amp; Commercial Trust (FLT SP) 2H21 DPU +6.3% YoY; Weak reversions though occupancy remains steady</li><li>IREIT Global (IREIT SP) 3Q21 Business Updates – Leasing improvements reduce risk, dual currency trading and EUR distribution +ve</li><li>United Hampshire US REIT (UHU SP) 3Q21 Business Updates – Lower rental rates despite occupancy holding up</li></ul>

Frasers Logistics &amp; Commercial Trust (FLT SP) 2H21 DPU +6.3% YoY; Weak reversions though occupancy remains steadyIREIT Global (IREIT SP) 3Q21 Business Updates – Leasing improvements reduce risk, dual currency trading and EUR distribution +veUnited Hampshire US REIT (UHU SP) 3Q21 Business Updates – Lower rental rates despite occupancy holding up

ASEAN Builder's Scoop (11Nov21) - FLT Weak Reversions

<h2>Singapore</h2><h3><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> to acquire two grocery-anchored assets in the US for US$78.3m</h3><ul><li>UHU has proposed to acquire two grocery-anchored freehold assets in Pennsylvania and Virginia, US, for US$78.3m. The acquisition is the REIT's first after its IPO in Mar20 and is also its first entry into Pennsylvania and Virginia. The purchase price comprises US$52m for Penrose Plaza in Philadelphia, Pennsylvania and US$26.3m for Colonial Square Shopping Center, Colonial Heights in Richmond, Virginia. The NPI yield for the two properties are ~6.5%</li><li>Post-acquisition, UHU expects its portfolio value will grow 13.3% to US$665.4m, while its market capitalisation will increase 9.9% to US$365.2m. The enlarged portfolio's WALE will also increase to 8.1 years, with 0.9% of leases due in 2021 and less than 10% of leases due for renewal each year from 2022-25. The total acquisition cost will be financed with a combination of loans and proceeds from a private placement. The manager proposed a private placement to raise gross proceeds of no less than US$30m.</li></ul>

SingaporeUnited Hampshire US REIT (UHU SP) to acquire two grocery-anchored assets in the US for US$78.3mUHU has proposed to acquire two grocery-anchored freehold assets in Pennsylvania and Virginia, US, for US$78.3m. The acquisition is the REIT's first after its IPO in Mar20 and is also its first entry into Pennsylvania and Virginia. The purchase price comprises US$52m for Penrose Plaza in Philadelphia, Pennsylvania and US$26.3m for Colonial Square Shopping Center, Colonial Heights in Richmond, Virginia. The NPI yield for the two properties are ~6.5%Post-acquisition, UHU expects its portfolio value will grow 13.3% to US$665.4m, while its market capitalisation will increase 9.9% to US$365.2m. The enlarged portfolio's WALE will also increase to 8.1 years, with 0.9% of leases due in 2021 and less than 10% of leases due for renewal each year from 2022-25. The total acquisition cost will be financed with a combination of loans and proceeds from a private placement. The manager proposed a private placement to raise gross proceeds of no less than US$30m.

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55" rel="noopener">Capitaland (CAPL SP)</a> 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot</h3><ul><li>1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H20</li><li>1H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)</li><li>Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21</li><li>Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectively</li><li>Lodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management</li><li>1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and China</li><li>CAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.</li></ul>

SingaporeCapitaland (CAPL SP) 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H201H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectivelyLodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and ChinaCAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

Singapore

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 (6Apr22) - Feb22 Retail Sales Down 1.2% MoM

UHU extends divestment due-diligence for third time; Prime logistics rentals up 3% QoQ in 1Q22; Reebonz building up for sale

SCCM Asia Research

ASEAN Builder's Scoop (24Feb22) - ECWREIT Driven by Absence of DI Retention

ARAUS back to declaring dividend; UHU portfolio valuation rising; LHN another Co-living expansion; RGE buys Tangling SC; HOBEE buys London office;...

SCCM Asia Research

ASEAN Builder's Scoop (11Nov21) - FLT Weak Reversions

FLT weak reversions; IREIT leasing improvements; UHU lower rental rates; Daiwa House Logistics new IPO listing; Cairnhill 16 launching soon; MEG...

SCCM Asia Research

ASEAN Builder's Scoop (6Oct21)

UHU expands with US$78m acquisitions; Retail sales fell in Aug21, F&B remains a drag; Chuan Park condo enbloc for S$938m; MY resi rental demand...

SCCM Asia Research

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

CAPL residential and FM bright spots; UOL turnaround story intact; SASSR sustained recovery momentum; CERT strong reversions, VLL muted land...

SCCM Asia Research

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