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)

Indonesia Real estate / Thematic (Sector/Industry)

<h2>Singapore</h2>
<h3>
<a href="https://www.smartkarma.com/entities/city-developments-ltd" target="_blank" data-smartkarma-citation="entities:57" rel="noopener">City Developments (CIT SP)</a> 1Q21 Business Updates – SG / AUS residential the bright spot; Gradual reopening of hotels should lift sentiment</h3>
<ul>
<li>Property Development: In Singapore, CIT sold 319 units with total sales value of S$513.6m in 1Q21, +72% YoY in units sold and +84.7% YoY in total sales value. Amber Park performed strongly with sales of around 100 units</li>
<li>In Feb, The Tapestry obtained its TOP (all 861 units are fully sold). Meanwhile, construction activities have resumed at all ongoing development projects. However, due to labour shortage which has affected the entire industry, activities have not returned to pre-COVID levels. CIT does not have any projects due for completion in 2021. To date, 324 units (60%) of Irwell Hill Residences have been sold. Acquisition of site at Northumberland Road will also be developed into a mixed-use project with 408 residential apartments of up to 23 storeys and commercial retail space on the ground floor</li>
<li>Meanwhile in Australia, fuelled by domestic demand, sales increased across CIT’s launched project. The Marker in Melbourne has pre-sold 80% of its 198 units and construction is on track to complete in 2022, while Brickworks Park in Brisbane has achieved pre-sales for 44% of the 132 released units. Waterbrook Bowral, a luxury retirement project in New South Wales that the Group has collaborated with Waterbrook Lifestyle Resorts on, has pre-sold 92% of the 77 townhouses launched and construction is in progress</li>
<li>Investment Properties: 1Q21 committed occupancy for SG office remains resilient at 91.4%, above island-wide occupancy of 88.1%, with positive rental reversion. SG retail portfolio continues to face headwinds. Footfall in the malls for the quarter has been relatively stable, though it is still lower than pre COVID-19 levels. Despite lower footfall, gross turnover sales (GTO) of CIT malls remain strong with 1Q21 GTO registering an increase of over 5% YoY compared to 1Q20 levels. As of 31Mar21, committed occupancy for retail space remains strong at 92.1%, above island-wide occupancy of 91.5%. In Thailand, since Mar21, part of Jungceylon, the Group’s major retail mall in Phuket has been temporarily closed to reduce operational cost. In China, while tenants remain cautious and slow to commit, office leasing demand is gradually returning. In Suzhou, Hong Leong City Center’s Grade-A office tower is now 85% occupied. In Japan, residential rental apartment portfolio within Osaka and Yokohama continues to show stable occupancy and healthy leasing demand</li>
<li>Hotel Operations: 1Q21 global occupancy dropped to 36.8% (1Q20: 52.5%) and global RevPAR decreased by 51.7% YoY to S$44.6 (1Q2020: S$92.4). Singapore continues to face challenges in 2021 until border restrictions are lifted. The UK was severely impacted, particularly in London. The US saw the country gradually reopening with the vaccine roll-out. New York and regional hotels achieved stronger occupancies in 1Q21 particularly with the weekend business. CIT’s M Social New York property in Times Square is expected to open in 2Q21. A community outbreak in Feb21 in Auckland led to lockdowns in New Zealand, which disrupted business and leisure travel in NZ over most of Feb and the early part of Mar</li>
<li>In Feb21, CIT acquired a 55% effective interest in Shenzhen Longgang Tusincere Tech Park in China’s high-growth Silicon Valley from its China JV, Sincere Property Group, and two entities of China Ping An for RMB850m (~S$174m). CIT now holds an 84.6% equity interest in the holding company, Shenzhen Tusincere Technology Park Development, which holds a 65% interest in the project. The remaining 35% interest in the project is held by the Shenzhen Longgang District state-owned enterprise</li>
<li>Net gearing ratio (factoring in revaluation surplus from investment properties) stands at 65% with interest cover at 1.7 times. Cash reserves stands at S$3.4bn with cash and available undrawn committed bank facilities amounts to a total S$5.5bn</li>
<li>CIT currently trades at 19.8x FY21E P/E and 0.8x P/B.  </li>
</ul>

Singapore

City Developments (CIT SP) 1Q21 Business Updates – SG / AUS residential the bright spot; Gradual reopening of hotels should lift sentiment

Property Development: In Singapore, CIT sold 319 units with total sales value of S$513.6m in 1Q21, +72% YoY in units sold and +84.7% YoY in total sales value. Amber Park performed strongly with sales of around 100 units
In Feb, The Tapestry obtained its TOP (all 861 units are fully sold). Meanwhile, construction activities have resumed at all ongoing development projects. However, due to labour shortage which has affected the entire industry, activities have not returned to pre-COVID levels. CIT does not have any projects due for completion in 2021. To date, 324 units (60%) of Irwell Hill Residences have been sold. Acquisition of site at Northumberland Road will also be developed into a mixed-use project with 408 residential apartments of up to 23 storeys and commercial retail space on the ground floor
Meanwhile in Australia, fuelled by domestic demand, sales increased across CIT’s launched project. The Marker in Melbourne has pre-sold 80% of its 198 units and construction is on track to complete in 2022, while Brickworks Park in Brisbane has achieved pre-sales for 44% of the 132 released units. Waterbrook Bowral, a luxury retirement project in New South Wales that the Group has collaborated with Waterbrook Lifestyle Resorts on, has pre-sold 92% of the 77 townhouses launched and construction is in progress
Investment Properties: 1Q21 committed occupancy for SG office remains resilient at 91.4%, above island-wide occupancy of 88.1%, with positive rental reversion. SG retail portfolio continues to face headwinds. Footfall in the malls for the quarter has been relatively stable, though it is still lower than pre COVID-19 levels. Despite lower footfall, gross turnover sales (GTO) of CIT malls remain strong with 1Q21 GTO registering an increase of over 5% YoY compared to 1Q20 levels. As of 31Mar21, committed occupancy for retail space remains strong at 92.1%, above island-wide occupancy of 91.5%. In Thailand, since Mar21, part of Jungceylon, the Group’s major retail mall in Phuket has been temporarily closed to reduce operational cost. In China, while tenants remain cautious and slow to commit, office leasing demand is gradually returning. In Suzhou, Hong Leong City Center’s Grade-A office tower is now 85% occupied. In Japan, residential rental apartment portfolio within Osaka and Yokohama continues to show stable occupancy and healthy leasing demand
Hotel Operations: 1Q21 global occupancy dropped to 36.8% (1Q20: 52.5%) and global RevPAR decreased by 51.7% YoY to S$44.6 (1Q2020: S$92.4). Singapore continues to face challenges in 2021 until border restrictions are lifted. The UK was severely impacted, particularly in London. The US saw the country gradually reopening with the vaccine roll-out. New York and regional hotels achieved stronger occupancies in 1Q21 particularly with the weekend business. CIT’s M Social New York property in Times Square is expected to open in 2Q21. A community outbreak in Feb21 in Auckland led to lockdowns in New Zealand, which disrupted business and leisure travel in NZ over most of Feb and the early part of Mar
In Feb21, CIT acquired a 55% effective interest in Shenzhen Longgang Tusincere Tech Park in China’s high-growth Silicon Valley from its China JV, Sincere Property Group, and two entities of China Ping An for RMB850m (~S$174m). CIT now holds an 84.6% equity interest in the holding company, Shenzhen Tusincere Technology Park Development, which holds a 65% interest in the project. The remaining 35% interest in the project is held by the Shenzhen Longgang District state-owned enterprise
Net gearing ratio (factoring in revaluation surplus from investment properties) stands at 65% with interest cover at 1.7 times. Cash reserves stands at S$3.4bn with cash and available undrawn committed bank facilities amounts to a total S$5.5bn
CIT currently trades at 19.8x FY21E P/E and 0.8x P/B.  


Sunway Real Estate Investment Trust (SREIT MK)

ASEAN Builder's Scoop (20May21) - CIT resi the bright spot