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

10 in 10 with Cromwell European REIT - Gateway Into Pan-Europe

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 <div class='content-caption'>SingHaiyi Group Celine Tang </div>
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For entrepreneur and property veteran Celine Tang, the backbone of any piece of real estate doesn't lie in its brick and mortar structure - instead, the human connections created and nurtured within its walls are what constitutes the foundation. 
"For me, property is all about constructing something that will span generations," said Guangdong, China-born Tang, the Managing Director of SGX-listed real estate developer SingHaiyi Group Ltd. 
"It's about families living in their homes. It's about building experiences and memories, and the joy that comes from that." 
Tang, who graduated with a Bachelor's Degree in Literature from China People's University for Police Officers - now known as People's Public Security University of China - has lived in Singapore for the last 25 years and is a permanent resident. 
  
She serves as Executive Director of trading and investment firm Tang Dynasty Pte Ltd, which she founded together with spouse Gordon Tang in 1995, as well as Managing Director of real estate and investment holding firm, Haiyi Holdings Pte Ltd, which the couple established in 2003. 
Thus, it's not surprising she subscribes to the "not just Chinese, but very Asian" mentality of wanting to own property. "It's everyone's dream to own his or her own home - this is something tangible that lasts. For some it marks a coming-of-age milestone, and creates a sense of belonging. This is why property ownership is a long-term trend that will never die out." 
Venturing into property development and investments in the city-state was also a no-brainer. "We're no strangers to the real estate business. Investing in and developing properties - both in China and the US - has very much been a part of our family tradition," she added. 
"In terms of socio-economic and political stability, as well as standards of living such as healthcare and education, Singapore remains a gem within the Asia-Pacific region. Property values here will definitely appreciate - it's just a matter of how quickly, and in what time frame." 
So when the opportunity presented itself, the Tangs used Haiyi Holdings -whose Chinese characters mean "smooth sailing at sea" - to take over listed vehicle SingXpress Land in 2012, by subscribing for the latter's cumulative convertible perpetual preference shares. The following year, the company was renamed SingHaiyi Group, and four years later, it was transferred to SGX Mainboard from the Catalist board.

 Diversity and Stability 
SingHaiyi has a current market capitalisation of about S$380 million. In the year-to date, the stock has generated a total return of 9.9%, compared with total returns of 8.9% and 10.6% for the benchmark Straits Times Index and the broader FTSE ST All-Share Index respectively.  
Haiyi Holdings owns a controlling 63.06% stake in SingHaiyi, in which Neil Bush - Tang's business partner and brother of former US President George W. Bush - serves as Non-Executive Chairman. Tang, who was appointed Group Managing Director of SingHaiyi in December 2013, also holds Non-Executive Chairman roles in SGX-listed OKH Global Ltd and Chip Eng Seng Corporation. 
Apart from an established track record in residential property development, SingHaiyi also owns a diversified portfolio of income-generating assets in the commercial and retail sectors, spanning the US, Australia and Asia. The Group's presence in different real estate segments across multiple markets provides a stable earnings profile, as well as maximises shareholder value. 
  
It is building a portfolio of quality projects, having completed six development properties since 2013, including the Building and Construction Authority's Conquas Star-rated City Suites and award-winning The Vales, as well as the Pasir Ris One "Design, Build and Sell Scheme" project that has since been fully sold. The Group has a pipeline of another five developments in Singapore and the US scheduled for completion by 2024.  
It optimises its portfolio through yield-accretive acquisitions and divestments, having made seven development project acquisitions since 2013. It divested its stake in Singapore's TripleOne Somerset building with a return of more than 60% within three years.  
The Group also diversifies its income through strategic investments, including a 2.59% stake in Cromwell Property Group, and a 25.0% stake in Malaysian malls via the limited partner of ARA Harmony Fund III, through which it receives quarterly dividends. 
"Such indirect stakes provide us with the avenue to study and understand the dynamics of different markets, as well as assess the potential of future investments should those opportunities arise," Tang said.

 

Buck Stops Here 
Singapore remains the Group's core market. The current pipeline of projects in the city-state include the 9 Penang Road commercial and retail development, which has obtained Temporary Occupation Permit, and secured UBS Singapore as its sole office tenant.  
It also has three residential projects - The Lilium and The Gazania, both unveiled in May this year, and Parc Clematis, which launched in August and is the Group's largest development to-date.  
Apart from bottom-lines, Tang is equally, if not more, uncompromising about SingHaiyi's reputation in the industry. "For any company, especially a publicly listed one, generating a profit is important," she said. 
"Beyond that, the nature of the real estate business demands not only quality, but also integrity. For example, when the market is in a slump, developers may be tempted to cut corners and use fixtures or parts that are inferior in quality, so as to reduce cost and boost margins. That's a no-no for us." 
The Group's philosophy of 精诚存信, 佳业传承 (jing cheng cun xin, jia ye chuan cheng) underpins its efforts to build a trustworthy and reliable brand for enduring growth, and a legacy that will span generations, she added. 
Her touchstone can be found in the Confucian Analects - 己所不欲, 勿施于人 (ji suo bu yu, wu shi yu ren), which means "Do not impose on others what you yourself do not desire". 
"Your word must always be your bond. What is paramount is upholding the trust that customers place in you, and keeping our promises with our products," she noted. 
The main challenge is making sure all levels of the organisation adhere to this principle. "There are many moving parts - from the main contractor to engineers, architects and suppliers. The alignment of the Group's objectives across each stage - from design and execution to submission and sale of the project - is critical," she added. 
Ultimately, the buck starts and stops with SingHaiyi. "If something goes wrong, the customer doesn't care who made the mistake. It starts with us, and ends with us, because we built it." 
In October 2018, Tang was the first female recipient of the "Singapore Real Estate Personality of the Year" Award, conferred by Southeast Asian real estate portal PropertyGuru.

 Price and Location 
In Singapore, private home prices continued to climb in the third quarter of 2019, after hitting their highest levels in at least five years in the previous quarter, according to data from the Urban Redevelopment Authority. 
Demand for private homes in Singapore will likely pick up in the medium term, DBS Research said in a report published in September. This is expected to be driven by government measures to boost affordability in the public housing market, such as the Enhanced CPF House Grant, as well as higher household income ceilings for purchase of new HDB homes. 
Last month, a report jointly published by the Urban Land Institute and PricewaterhouseCoopers ranked Singapore pole position for real estate investment prospects in 2020, vs second-to-last in a list of 22 centres back in 2017. The city-state was also one of the few markets regionally to see a surge in transaction values in the first half of 2019, with most of the activity driven by cross-border capital.  
Despite a relatively optimistic longer term outlook for the domestic market, challenges remain.  
"Property prices have not moved in tandem with the increase in construction costs, and coupled with slower demand over the past few years, developers have not had an easy time," Tang said. 
"Land prices in Singapore are also extremely high due to the scarcity factor, and as a result, we've been more prudent in choosing our projects as well as purchasing land bank - the site must have the right price and the right location." 
The regulation that imposes a levy on developers who don't complete construction and sell all units in the project within a period of five years from acquiring the land is another stumbling block, she added. In particular, it takes a substantial amount of time for collective acquisition projects to be approved, which has to be accounted for within the five-year period.

 

Wait and See 
A supply overhang also continues to plague the local market. The number of unsold units from new projects doubled to 4,377 in the third quarter, the Monetary Authority of Singapore (MAS) said in its annual Financial Stability Review last month. This increase could be exacerbated in the medium term, as developers redevelop and launch projects following the slew of en bloc sites sold between 2017 and 2018, the MAS noted. 
On the demand side, many buyers are adopting a wait-and-see approach after the government's latest round of cooling measures last July, which included higher buyer stamp duties and tighter loan limits.  
"This is one challenge we cannot overcome, and every developer faces the same obstacle. We have huge turnouts at our launches and showrooms, but it's difficult to get buyers to commit," Tang said. 
No matter how savvy a developer's marketing strategy may be, broader buying sentiment still plays an overriding role. 
"The stiffer buyer's stamp duty is a major psychological barrier, and the question in every buyer's mind is: 'Are these duties temporary or permanent? What happens if I make the purchase now, and some or all of the cooling measures are relaxed or rolled back months later?" she added. 
While market dynamics and project sales are never far from her thoughts, Tang also frets about cultivating the right values in her two sons and a daughter, aged 19 to 25. 
"Usually, first-generation entrepreneurs are the ones who worked hard and got by with very little during the early years. The second generation - their children - are the ones who grow up in a privileged background, and are likely to develop a sense of entitlement," she pointed out. 
"I want my children to know that we work very hard to provide them with a foundation, and this foundation is for them to build on - to create something of their own - and not an excuse for them to be lazy and ask for handouts." 
The 52-year-old also finds herself grappling with the phenomenon of FOMO, or the fear of missing out, common amongst millennials and Gen Z. "I tell my kids that life is a long journey - don't be impatient to succeed or in a hurry to prove yourself. If you miss out now, you could get another chance later," she said. 
"But in the case of uncertain investments, it's better to deal with a lost opportunity rather than a mistake."

 

SingHaiyi Group Ltd

SingHaiyi is a fast-growing, diversified company focused on property development, investment and management services. With strategic support from its major shareholders, the Group is led by a board and management team with deep insights and strong connections that enables access to unique and rare investment opportunities. Apart from an established track record in residential property development, the Group also holds a diversified portfolio of income-generating assets in the commercial and retail sectors, with geographical reach into the US and widening exposure in Asia. The Group's exposure to various segments of the real estate sector in multiple countries stands as a testament to its calculated diversification strategy, designed to provide stable and visible earnings and deliver value to shareholders.

 
The company website is: <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link7">singhaiyi.com</a>. 
Click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link8">here</a> for the company's StockFacts page. 
For the three months ended 30 Sept 2019 financial results, click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link9">here</a>.

 

About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="http://edm.sgx.com/a/hBd-CspB86%24MfB90noBAABR54ZH/link10">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="mailto:jennifer.tan@sgx.com">jennifer.tan@sgx.com</a>.
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    SingHaiyi Group Celine Tang 


For entrepreneur and property veteran Celine Tang, the backbone of any piece of real estate doesn't lie in its brick and mortar structure - instead, the human connections created and nurtured within its walls are what constitutes the foundation.  
"For me, property is all about constructing something that will span generations," said Guangdong, China-born Tang, the Managing Director of SGX-listed real estate developer SingHaiyi Group Ltd.  
"It's about families living in their homes. It's about building experiences and memories, and the joy that comes from that."  
Tang, who graduated with a Bachelor's Degree in Literature from China People's University for Police Officers - now known as People's Public Security University of China - has lived in Singapore for the last 25 years and is a permanent resident. 
  
She serves as Executive Director of trading and investment firm Tang Dynasty Pte Ltd, which she founded together with spouse Gordon Tang in 1995, as well as Managing Director of real estate and investment holding firm, Haiyi Holdings Pte Ltd, which the couple established in 2003.  
Thus, it's not surprising she subscribes to the "not just Chinese, but very Asian" mentality of wanting to own property. "It's everyone's dream to own his or her own home - this is something tangible that lasts. For some it marks a coming-of-age milestone, and creates a sense of belonging. This is why property ownership is a long-term trend that will never die out."  
Venturing into property development and investments in the city-state was also a no-brainer. "We're no strangers to the real estate business. Investing in and developing properties - both in China and the US - has very much been a part of our family tradition," she added.  
"In terms of socio-economic and political stability, as well as standards of living such as healthcare and education, Singapore remains a gem within the Asia-Pacific region. Property values here will definitely appreciate - it's just a matter of how quickly, and in what time frame."  
So when the opportunity presented itself, the Tangs used Haiyi Holdings -whose Chinese characters mean "smooth sailing at sea" - to take over listed vehicle SingXpress Land in 2012, by subscribing for the latter's cumulative convertible perpetual preference shares. The following year, the company was renamed SingHaiyi Group, and four years later, it was transferred to SGX Mainboard from the Catalist board.

  Diversity and Stability  
SingHaiyi has a current market capitalisation of about S$380 million. In the year-to date, the stock has generated a total return of 9.9%, compared with total returns of 8.9% and 10.6% for the benchmark Straits Times Index and the broader FTSE ST All-Share Index respectively.   
Haiyi Holdings owns a controlling 63.06% stake in SingHaiyi, in which Neil Bush - Tang's business partner and brother of former US President George W. Bush - serves as Non-Executive Chairman. Tang, who was appointed Group Managing Director of SingHaiyi in December 2013, also holds Non-Executive Chairman roles in SGX-listed OKH Global Ltd and Chip Eng Seng Corporation.  
Apart from an established track record in residential property development, SingHaiyi also owns a diversified portfolio of income-generating assets in the commercial and retail sectors, spanning the US, Australia and Asia. The Group's presence in different real estate segments across multiple markets provides a stable earnings profile, as well as maximises shareholder value. 
  
It is building a portfolio of quality projects, having completed six development properties since 2013, including the Building and Construction Authority's Conquas Star-rated City Suites and award-winning The Vales, as well as the Pasir Ris One "Design, Build and Sell Scheme" project that has since been fully sold. The Group has a pipeline of another five developments in Singapore and the US scheduled for completion by 2024.   
It optimises its portfolio through yield-accretive acquisitions and divestments, having made seven development project acquisitions since 2013. It divested its stake in Singapore's TripleOne Somerset building with a return of more than 60% within three years.   
The Group also diversifies its income through strategic investments, including a 2.59% stake in Cromwell Property Group, and a 25.0% stake in Malaysian malls via the limited partner of ARA Harmony Fund III, through which it receives quarterly dividends.  
"Such indirect stakes provide us with the avenue to study and understand the dynamics of different markets, as well as assess the potential of future investments should those opportunities arise," Tang said.

 

Buck Stops Here  
Singapore remains the Group's core market. The current pipeline of projects in the city-state include the 9 Penang Road commercial and retail development, which has obtained Temporary Occupation Permit, and secured UBS Singapore as its sole office tenant.   
It also has three residential projects - The Lilium and The Gazania, both unveiled in May this year, and Parc Clematis, which launched in August and is the Group's largest development to-date.   
Apart from bottom-lines, Tang is equally, if not more, uncompromising about SingHaiyi's reputation in the industry. "For any company, especially a publicly listed one, generating a profit is important," she said.  
"Beyond that, the nature of the real estate business demands not only quality, but also integrity. For example, when the market is in a slump, developers may be tempted to cut corners and use fixtures or parts that are inferior in quality, so as to reduce cost and boost margins. That's a no-no for us."  
The Group's philosophy of 精诚存信, 佳业传承 (jing cheng cun xin, jia ye chuan cheng) underpins its efforts to build a trustworthy and reliable brand for enduring growth, and a legacy that will span generations, she added.  
Her touchstone can be found in the Confucian Analects - 己所不欲, 勿施于人 (ji suo bu yu, wu shi yu ren), which means "Do not impose on others what you yourself do not desire".  
"Your word must always be your bond. What is paramount is upholding the trust that customers place in you, and keeping our promises with our products," she noted.  
The main challenge is making sure all levels of the organisation adhere to this principle. "There are many moving parts - from the main contractor to engineers, architects and suppliers. The alignment of the Group's objectives across each stage - from design and execution to submission and sale of the project - is critical," she added.  
Ultimately, the buck starts and stops with SingHaiyi. "If something goes wrong, the customer doesn't care who made the mistake. It starts with us, and ends with us, because we built it."  
In October 2018, Tang was the first female recipient of the "Singapore Real Estate Personality of the Year" Award, conferred by Southeast Asian real estate portal PropertyGuru.

  Price and Location  
In Singapore, private home prices continued to climb in the third quarter of 2019, after hitting their highest levels in at least five years in the previous quarter, according to data from the Urban Redevelopment Authority.  
Demand for private homes in Singapore will likely pick up in the medium term, DBS Research said in a report published in September. This is expected to be driven by government measures to boost affordability in the public housing market, such as the Enhanced CPF House Grant, as well as higher household income ceilings for purchase of new HDB homes.  
Last month, a report jointly published by the Urban Land Institute and PricewaterhouseCoopers ranked Singapore pole position for real estate investment prospects in 2020, vs second-to-last in a list of 22 centres back in 2017. The city-state was also one of the few markets regionally to see a surge in transaction values in the first half of 2019, with most of the activity driven by cross-border capital.   
Despite a relatively optimistic longer term outlook for the domestic market, challenges remain.   
"Property prices have not moved in tandem with the increase in construction costs, and coupled with slower demand over the past few years, developers have not had an easy time," Tang said.  
"Land prices in Singapore are also extremely high due to the scarcity factor, and as a result, we've been more prudent in choosing our projects as well as purchasing land bank - the site must have the right price and the right location."  
The regulation that imposes a levy on developers who don't complete construction and sell all units in the project within a period of five years from acquiring the land is another stumbling block, she added. In particular, it takes a substantial amount of time for collective acquisition projects to be approved, which has to be accounted for within the five-year period.

 

Wait and See  
A supply overhang also continues to plague the local market. The number of unsold units from new projects doubled to 4,377 in the third quarter, the Monetary Authority of Singapore (MAS) said in its annual Financial Stability Review last month. This increase could be exacerbated in the medium term, as developers redevelop and launch projects following the slew of en bloc sites sold between 2017 and 2018, the MAS noted.  
On the demand side, many buyers are adopting a wait-and-see approach after the government's latest round of cooling measures last July, which included higher buyer stamp duties and tighter loan limits.   
"This is one challenge we cannot overcome, and every developer faces the same obstacle. We have huge turnouts at our launches and showrooms, but it's difficult to get buyers to commit," Tang said.  
No matter how savvy a developer's marketing strategy may be, broader buying sentiment still plays an overriding role.  
"The stiffer buyer's stamp duty is a major psychological barrier, and the question in every buyer's mind is: 'Are these duties temporary or permanent? What happens if I make the purchase now, and some or all of the cooling measures are relaxed or rolled back months later?" she added.  
While market dynamics and project sales are never far from her thoughts, Tang also frets about cultivating the right values in her two sons and a daughter, aged 19 to 25.  
"Usually, first-generation entrepreneurs are the ones who worked hard and got by with very little during the early years. The second generation - their children - are the ones who grow up in a privileged background, and are likely to develop a sense of entitlement," she pointed out.  
"I want my children to know that we work very hard to provide them with a foundation, and this foundation is for them to build on - to create something of their own - and not an excuse for them to be lazy and ask for handouts."  
The 52-year-old also finds herself grappling with the phenomenon of FOMO, or the fear of missing out, common amongst millennials and Gen Z. "I tell my kids that life is a long journey - don't be impatient to succeed or in a hurry to prove yourself. If you miss out now, you could get another chance later," she said.  
"But in the case of uncertain investments, it's better to deal with a lost opportunity rather than a mistake."

 

SingHaiyi Group Ltd

SingHaiyi is a fast-growing, diversified company focused on property development, investment and management services. With strategic support from its major shareholders, the Group is led by a board and management team with deep insights and strong connections that enables access to unique and rare investment opportunities. Apart from an established track record in residential property development, the Group also holds a diversified portfolio of income-generating assets in the commercial and retail sectors, with geographical reach into the US and widening exposure in Asia. The Group's exposure to various segments of the real estate sector in multiple countries stands as a testament to its calculated diversification strategy, designed to provide stable and visible earnings and deliver value to shareholders.

 
The company website is: singhaiyi.com.  
Click here for the company's StockFacts page.  
For the three months ended 30 Sept 2019 financial results, click here.

 

About kopi-C: the Company brew

Text: Jennifer LH Tan Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.tan@sgx.com.



SingHaiyi Group: Building an Enduring Legacy

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Lendlease Global Commercial REIT / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/lendlease-global-commercial-reit" target="_blank" data-smartkarma-citation="entities:28292:1" rel="noopener">Lendlease Global REIT (1745226D SP)</a> (LGR) is looking to raise about US$540m in its upcoming Singapore IPO. We covered the overview of the REIT in:
<ul>
<li>
<a href="https://www.smartkarma.com/insights/lendlease-reit-ipo-early-thoughts-looking-forward-without-historical-data" target="_blank" data-smartkarma-citation="insights:32461" rel="noopener">Lendlease REIT IPO Early Thoughts - Looking Forward Without Historical Data</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/lendlease-reit-ipo-review-orchard-malls-comparison-cheaper-but-not-necessarily-better" target="_blank" data-smartkarma-citation="insights:32484" rel="noopener">Lendlease REIT IPO Review - Orchard Malls Comparison - Cheaper but Not Necessarily Better</a> </li>
</ul>
In this insight, we will compare the valuation of LGR with Singapore-listed REITs and look at the valuation of LGR from a different perspective as well.

Lendlease Global REIT (1745226D SP) (LGR) is looking to raise about US$540m in its upcoming Singapore IPO. We covered the overview of the REIT in:


Lendlease REIT IPO Early Thoughts - Looking Forward Without Historical Data 

Lendlease REIT IPO Review - Orchard Malls Comparison - Cheaper but Not Necessarily Better 

In this insight, we will compare the valuation of LGR with Singapore-listed REITs and look at the valuation of LGR from a different perspective as well.

Lendlease REIT IPO Review - Risk Reward Positively Skewed

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Cromwell Property / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/cromwell-property-group" target="_blank" data-smartkarma-citation="entities:2780:1" rel="noopener">Cromwell Property (CMW AU)</a> plans to raise US$260m (A$375m) in order to pursue over A$1bn of identified acquisition opportunities across Australia and Europe, as per the company. As per our back of the envelope calculations, given the large dilution, the company would have to announce acquisiton of at least A$1.1bn+ in order to just mantain its earnings.This is the third fund raising by an Australian property group that we have covered since May 2019. The other two deals did reasonably ok. However, both were done to part fund acquisitions which were announced along with the placement. Hence, this deal is not exactly comparable. The deal scores well on our framework owing to its track record, although performance of the stock in its past deals has been mixed.

Cromwell Property (CMW AU) plans to raise US$260m (A$375m) in order to pursue over A$1bn of identified acquisition opportunities across Australia and Europe, as per the company. As per our back of the envelope calculations, given the large dilution, the company would have to announce acquisiton of at least A$1.1bn+ in order to just mantain its earnings.This is the third fund raising by an Australian property group that we have covered since May 2019. The other two deals did reasonably ok. However, both were done to part fund acquisitions which were announced along with the placement. Hence, this deal is not exactly comparable. The deal scores well on our framework owing to its track record, although performance of the stock in its past deals has been mixed. 

Cromwell Property Placement - Trickier than Others - Past Deals Have Been Mixed

Partner, River Valley Asset Management

River Valley Asset Management

Partner

Singapore-based boutique asset management firm

River Valley Asset Management is a Singapore-based boutique asset management firm. Our team at RVAM strongly believes in being a trusted steward of our clients' wealth across generations.

Each of our fund managers has years of rich portfolio management experience over multiple market cycles at world-class investment houses. We bring our clients the combined strength of our investment team to manage their financial portfolios and to provide bespoke guidance on all aspects of their financial health.

We offer multi-asset class expert investment advice to accredited investors who are family offices, high net worth individuals and institutional investors to preserve and grow our clients' wealth.

The fund management team of the company includes Homiyar Vasania, Anand Ramachandran and Jamshed Desai.

Cromwell European REIT / Equity Bottom-Up

As we close an eventful 2018, fear and uncertainty seem to rule markets, leaving behind in their wake attractive opportunities for investors to pick and choose. Crystal ball gazers are finding it hard to come up with a cogent narrative for the times ahead as a plethora of unknowns from trade wars to Brexit to slowdown worries present the proverbial Sword of Damocles hanging over many investment decisions. In an environment like this we go back to our core Investment philosophy and look for cashflows that are predictable, with visible cash return to investors and trading at an attractive price. We find many such ideas but some have outlook uncertainty embedded in the price, others have become prisoners of policy uncertainty, but then we found a company that is trading attractively mainly because most investors have not heard of it - <a href="http://www.rivervalleyasset.com/newsletters" target="_blank">River Valley Asset Management's</a> undiscovered Gem of the month. <a href="https://www.smartkarma.com/entities/25889" target="_blank" data-smartkarma-citation="entities:25889:1">Cromwell European Reit (CERT SP)</a> (CERT), listed in Singapore just about a year back, is one such name. The company is an owner of developed market properties across a diversified group of European countries, delivering a stable and growing pool of cashflows most of which flow into the hands of investors, thus providing high visibility to returns. We seem to be in an environment where the market should reward such stability and predictability ,but given that most investors are not aware of its existence, we are getting the stock at a valuation which provides significant downside protection with reasonable likelihood of capital appreciation as market awareness develops. For a company with a market capitalization north of a billion Singapore dollars, with potential for double digit returns, we think this is a stock waiting to be discovered by the yield-chasing Singapore market.

As we close an eventful 2018, fear and uncertainty seem to rule markets, leaving behind in their wake attractive opportunities for investors to pick and choose. Crystal ball gazers are finding it hard to come up with a cogent narrative for the times ahead as a plethora of unknowns from trade wars to Brexit to slowdown worries present the proverbial Sword of Damocles hanging over many investment decisions. In an environment like this we go back to our core Investment philosophy and look for cashflows that are predictable, with visible cash return to investors and trading at an attractive price. We find many such ideas but some have outlook uncertainty embedded in the price, others have become prisoners of policy uncertainty, but then we found a company that is trading attractively mainly because most investors have not heard of it - River Valley Asset Management's undiscovered Gem of the month. Cromwell European Reit (CERT SP) (CERT), listed in Singapore just about a year back, is one such name. The company is an owner of developed market properties across a diversified group of European countries, delivering a stable and growing pool of cashflows most of which flow into the hands of investors, thus providing high visibility to returns. We seem to be in an environment where the market should reward such stability and predictability ,but given that most investors are not aware of its existence, we are getting the stock at a valuation which provides significant downside protection with reasonable likelihood of capital appreciation as market awareness develops. For a company with a market capitalization north of a billion Singapore dollars, with potential for double digit returns, we think this is a stock waiting to be discovered by the yield-chasing Singapore market.

Australia

Cromwell Property Group is a property and funds manager. The Company, through its subsidiary, provides funds management, property transactions, property and facilities management, finance, compliance, debenture issues, and debt management.

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