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

SCCM Asia Research

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.

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

Philippines Real estate / Thematic (Sector/Industry)

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/suntec-reit" target="_blank" data-smartkarma-citation="entities:151" rel="noopener">Suntec REIT (SUN SP)</a> divests 30% of 9 Penang Road; Booked 30% development gain</h3><ul><li>SUN has sold its 30% interest in 9 Penang Road, formerly known as Park Mall, to Haiyi Holdings at an agreed property value of S$295.5m or S$2,468psf based on the property’s NLA. Haiyi Holdings, which redeveloped the site together with SUN and SingHaiyi Group (SHG SP), already held a 35% stake in the JV before buying out SUN's interest. The agreed property value represents a 5.7% premium over the latest valuation of S$931.8m and 30.3% higher than the total development cost of S$756.0m</li><li>The ten-storey development consists of two office towers and ancillary retail with a NLA of ~399,000sqft. The committed occupancy was 98.7% as at 31Mar21 with the two office towers fully leased to UBS AG</li><li>After taking into account the divestment related expenses (including the divestment fee payable to the Manager), the net proceeds from the divestment would be ~S$88.2m, resulting in an estimated net gain of ~S$66.5m. This represents a 305% return on investment if calculating net divestment profit as a percentage of cost of investment. The net proceeds of the divestment may be used to pare down bank borrowings and/or fund future acquisitions</li><li>Post divestment, SUN continues to be anchored by resilient office segment, which will contribute more than 80% to the REIT’s total income contribution with Singapore properties constituting ~75% of total AUM</li><li>On a stabilized basis, the NPI yield is 3.3% for this divestment. On a FY20 pro-forma basis, the acquisitions are expected to be +0.15% NAV accretive to unitholders. DPU will remain flattish at S$7.402c. Gearing will decrease to 42.9% from 44.4% as at 31Mar21 on a pro-forma basis. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/213/614/original/image015.png?1623894864" class="editor-image img-responsive" data-smartkarma-image-id="213614"></figure></section></li></ul>

SingaporeSuntec REIT (SUN SP) divests 30% of 9 Penang Road; Booked 30% development gainSUN has sold its 30% interest in 9 Penang Road, formerly known as Park Mall, to Haiyi Holdings at an agreed property value of S$295.5m or S$2,468psf based on the property’s NLA. Haiyi Holdings, which redeveloped the site together with SUN and SingHaiyi Group (SHG SP), already held a 35% stake in the JV before buying out SUN's interest. The agreed property value represents a 5.7% premium over the latest valuation of S$931.8m and 30.3% higher than the total development cost of S$756.0mThe ten-storey development consists of two office towers and ancillary retail with a NLA of ~399,000sqft. The committed occupancy was 98.7% as at 31Mar21 with the two office towers fully leased to UBS AGAfter taking into account the divestment related expenses (including the divestment fee payable to the Manager), the net proceeds from the divestment would be ~S$88.2m, resulting in an estimated net gain of ~S$66.5m. This represents a 305% return on investment if calculating net divestment profit as a percentage of cost of investment. The net proceeds of the divestment may be used to pare down bank borrowings and/or fund future acquisitionsPost divestment, SUN continues to be anchored by resilient office segment, which will contribute more than 80% to the REIT’s total income contribution with Singapore properties constituting ~75% of total AUMOn a stabilized basis, the NPI yield is 3.3% for this divestment. On a FY20 pro-forma basis, the acquisitions are expected to be +0.15% NAV accretive to unitholders. DPU will remain flattish at S$7.402c. Gearing will decrease to 42.9% from 44.4% as at 31Mar21 on a pro-forma basis. 

ASEAN Builder's Scoop (17Jun21) - SUN Booked 30% Devt Gain on 9 Penang Rd Sale