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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

Thematic (Sector/Industry)

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/ascott-residence-trust" target="_blank" data-smartkarma-citation="entities:6560" rel="noopener">Ascott Residence Trust (ART SP)</a> acquires student accommodation property in Texas for US$70m; 5.1% EBITDA yield</h3><ul><li>ART has entered into a conditional sale and purchase agreement to acquire a student accommodation property located in Texas, USA for US$70m (~S$93.8m). Based on the independent valuation, the property is valued at US$72.0m (~S$96.5m). The property is a freehold, off-campus facility with 1,005 beds and serves Texas Tech University and is 100% leased for the 2021 academic year. Texas Tech University has over 40,000 students</li><li>On a pro forma basis, the acquisition is expected to contribute additional EBITDA of US$3.6m (~S$4.8m), translating to an expected EBITDA yield of 5.1%, and increase distributable income by S$3.3m for FY20, translating to an increase in pro forma distribution per stapled security of ~1.5%</li><li>Completion is subject to and conditional upon, the fulfilment of the conditions precedent in the Sale and Purchase Agreement and is expected to take place on or around 21Sep. ART proposes to finance the total acquisition costs from the private placement to raise gross proceeds of ~S$150.0m and debt financing. Following completion of the acquisition, ART’s aggregate leverage would remain at 35.9%.</li></ul>

SingaporeAscott Residence Trust (ART SP) acquires student accommodation property in Texas for US$70m; 5.1% EBITDA yieldART has entered into a conditional sale and purchase agreement to acquire a student accommodation property located in Texas, USA for US$70m (~S$93.8m). Based on the independent valuation, the property is valued at US$72.0m (~S$96.5m). The property is a freehold, off-campus facility with 1,005 beds and serves Texas Tech University and is 100% leased for the 2021 academic year. Texas Tech University has over 40,000 studentsOn a pro forma basis, the acquisition is expected to contribute additional EBITDA of US$3.6m (~S$4.8m), translating to an expected EBITDA yield of 5.1%, and increase distributable income by S$3.3m for FY20, translating to an increase in pro forma distribution per stapled security of ~1.5%Completion is subject to and conditional upon, the fulfilment of the conditions precedent in the Sale and Purchase Agreement and is expected to take place on or around 21Sep. ART proposes to finance the total acquisition costs from the private placement to raise gross proceeds of ~S$150.0m and debt financing. Following completion of the acquisition, ART’s aggregate leverage would remain at 35.9%.

<h2>Singapore</h2><h3>Park Hotel Farrer Park relaunches under Holiday Inn brand</h3><p>The 300-room Park Hotel Farrer Park, owned by RB Capital and previously managed by Park Hotel Group, has been renamed Holiday Inn Singapore Little India. Its new manager, IHG Hotels &amp; Resorts, now manages three of RB Capital's Singapore hotels, totalling nearly 1,000 keys. The other two are Holiday Inn Express Clarke Quay, opened in 2014, and InterContinental Singapore Robertson Quay, opened in 2017. IHG operates 11 hotels in Singapore across a range of brands including Regent, InterContinental, Crowne Plaza, Hotel Indigo and Holiday Inn. There had been a few more years remaining on the management contract for Park Hotel Farrer Park, but due to the current situation with Park Hotel Management, RB Capital decided to sign on IHG to manage the property on a long-term basis.</p>

SingaporePark Hotel Farrer Park relaunches under Holiday Inn brandThe 300-room Park Hotel Farrer Park, owned by RB Capital and previously managed by Park Hotel Group, has been renamed Holiday Inn Singapore Little India. Its new manager, IHG Hotels &amp; Resorts, now manages three of RB Capital's Singapore hotels, totalling nearly 1,000 keys. The other two are Holiday Inn Express Clarke Quay, opened in 2014, and InterContinental Singapore Robertson Quay, opened in 2017. IHG operates 11 hotels in Singapore across a range of brands including Regent, InterContinental, Crowne Plaza, Hotel Indigo and Holiday Inn. There had been a few more years remaining on the management contract for Park Hotel Farrer Park, but due to the current situation with Park Hotel Management, RB Capital decided to sign on IHG to manage the property on a long-term basis.

<h2>Singapore</h2><h3><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> issues S$250m 5.375% perpetual securities</h3><p>AAREIT has priced the S$250m perpetual securities at 5.375%. The Series 003 Perpetual Securities will be issued under the S$750m Multicurrency Debt Issuance programme, expected to be issued on 1Sep21. The net proceeds will be used for the general corporate purposes, finance general working capital, capital expenditure and investments and the partial or full refinancing of existing borrowings. AAREIT has an existing S$125m 5.65% perpetual securities issued in Aug20, bringing its total perps exposure to S$375m (a look-through debt+perps/asset to ~46%).</p><h3>Residential property volume, prices could continue rising for the rest of 2021</h3><p>Residential property demand and prices are expected to tick higher. OrangeTee noted that demand for public and private properties has been rising and listings for both new launches and resale flats are being snapped up on the same day. Buyers are more willing to spend on bigger but older flats due to work-from-home requirements. According to OrangeTee, more than 14,000 resale HDB flats changed hands in 1H21. Prices increased 6% over that period and are just 2% below the peak in 2Q13. Total HDB resales could hit 27,000-29,000 units this year (vs. 24,748 units in 2020 and 23,714 in 2019), while prices of resale flats may rise by 9-11% for the whole of 2021. Meanwhile, a total of 8,449 private homes, including new launches and resale units, were sold in 2Q21, up 4.3% QoQ. Overall home prices may rise by 6-9% this year, possibly driven by resale volumes.</p>

SingaporeAIMS APAC REIT (AAREIT SP) issues S$250m 5.375% perpetual securitiesAAREIT has priced the S$250m perpetual securities at 5.375%. The Series 003 Perpetual Securities will be issued under the S$750m Multicurrency Debt Issuance programme, expected to be issued on 1Sep21. The net proceeds will be used for the general corporate purposes, finance general working capital, capital expenditure and investments and the partial or full refinancing of existing borrowings. AAREIT has an existing S$125m 5.65% perpetual securities issued in Aug20, bringing its total perps exposure to S$375m (a look-through debt+perps/asset to ~46%).Residential property volume, prices could continue rising for the rest of 2021Residential property demand and prices are expected to tick higher. OrangeTee noted that demand for public and private properties has been rising and listings for both new launches and resale flats are being snapped up on the same day. Buyers are more willing to spend on bigger but older flats due to work-from-home requirements. According to OrangeTee, more than 14,000 resale HDB flats changed hands in 1H21. Prices increased 6% over that period and are just 2% below the peak in 2Q13. Total HDB resales could hit 27,000-29,000 units this year (vs. 24,748 units in 2020 and 23,714 in 2019), while prices of resale flats may rise by 9-11% for the whole of 2021. Meanwhile, a total of 8,449 private homes, including new launches and resale units, were sold in 2Q21, up 4.3% QoQ. Overall home prices may rise by 6-9% this year, possibly driven by resale volumes.

<h2>Singapore</h2>
<h3>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 147.562px;">
<p> </p>
</td>
<td style="width: 144.797px;">
<p>AAREIT</p>
</td>
<td style="width: 144.328px;">
<p>CICT</p>
</td>
<td style="width: 142.125px;">
<p>KREIT</p>
</td>
<td style="width: 147.188px;">
<p>MINT</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Period</p>
</td>
<td style="width: 144.797px;">
<p>1Q22</p>
</td>
<td style="width: 144.328px;">
<p>1H21</p>
</td>
<td style="width: 142.125px;">
<p>1H21</p>
</td>
<td style="width: 147.188px;">
<p>1Q22</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Gross Revenue (S$ m)</p>
</td>
<td style="width: 144.797px;">
<p>31.8 (+16.8% YoY)</p>
</td>
<td style="width: 144.328px;">
<p>645.7 (+102.8% YoY)</p>
</td>
<td style="width: 142.125px;">
<p>105.8 (+40.2% YoY)</p>
</td>
<td style="width: 147.188px;">
<p>128.1 (29.2% YoY)</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>NPI (S$ m)</p>
</td>
<td style="width: 144.797px;">
<p>23.1 (+23.9% YoY)</p>
</td>
<td style="width: 144.328px;">
<p>472.2 (+118% YoY)</p>
</td>
<td style="width: 142.125px;">
<p>84.4 (+43.1% YoY)</p>
</td>
<td style="width: 147.188px;">
<p>104.7 (33.1% YoY)</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>DPU (S$ c)</p>
</td>
<td style="width: 144.797px;">
<p>2.25 (+12.5% YoY)</p>
</td>
<td style="width: 144.328px;">
<p>5.18 (+75% YoY)</p>
</td>
<td style="width: 142.125px;">
<p>2.94 (+5.0% YoY)</p>
</td>
<td style="width: 147.188px;">
<p>3.35 (+16.7% YoY)</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>NAV per Unit (S$)</p>
</td>
<td style="width: 144.797px;">
<p>1.35</p>
</td>
<td style="width: 144.328px;">
<p>2.05</p>
</td>
<td style="width: 142.125px;">
<p>1.29</p>
</td>
<td style="width: 147.188px;">
<p>1.75</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>P/B (x)</p>
</td>
<td style="width: 144.797px;">
<p>1.15</p>
</td>
<td style="width: 144.328px;">
<p>1.02</p>
</td>
<td style="width: 142.125px;">
<p>0.93</p>
</td>
<td style="width: 147.188px;">
<p>1.65</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Occupancy (%)</p>
</td>
<td style="width: 144.797px;">
<p>95.7</p>
</td>
<td style="width: 144.328px;">
<p>94.9</p>
</td>
<td style="width: 142.125px;">
<p>96.7</p>
</td>
<td style="width: 147.188px;">
<p>94.3 (Overall)</p>
<p>97.8 (North American Portfolio)</p>
<p>93.4 (Singapore Portfolio)</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Reversion (%)</p>
</td>
<td style="width: 144.797px;">
<p>Not disclosed</p>
</td>
<td style="width: 144.328px;">
<p>-9.1 (retail)</p>
</td>
<td style="width: 142.125px;">
<p>6.91</p>
</td>
<td style="width: 147.188px;">
<p>Not Disclosed</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Gearing (%)</p>
</td>
<td style="width: 144.797px;">
<p>34.3</p>
</td>
<td style="width: 144.328px;">
<p>40.5</p>
</td>
<td style="width: 142.125px;">
<p>38.9</p>
</td>
<td style="width: 147.188px;">
<p>31.0</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Cost of Debt (%)</p>
</td>
<td style="width: 144.797px;">
<p>2.8</p>
</td>
<td style="width: 144.328px;">
<p>2.4</p>
</td>
<td style="width: 142.125px;">
<p>1.97</p>
</td>
<td style="width: 147.188px;">
<p>2.7</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>1 Yr Fwd Yield (%)</p>
</td>
<td style="width: 144.797px;">
<p>6.1</p>
</td>
<td style="width: 144.328px;">
<p>5.19</p>
</td>
<td style="width: 142.125px;">
<p>4.92</p>
</td>
<td style="width: 147.188px;">
<p>1.51</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Debt Hedged (%)</p>
</td>
<td style="width: 144.797px;">
<p>77.2</p>
</td>
<td style="width: 144.328px;">
<p>85</p>
</td>
<td style="width: 142.125px;">
<p>68</p>
</td>
<td style="width: 147.188px;">
<p>95.8</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Target Price</p>
</td>
<td style="width: 144.797px;">
<p>Under Review</p>
</td>
<td style="width: 144.328px;">
<p>N/A</p>
</td>
<td style="width: 142.125px;">
<p>N/A</p>
</td>
<td style="width: 147.188px;">
<p>N/A</p>
</td>
</tr>
<tr>
<td style="width: 147.562px;">
<p>Rating</p>
</td>
<td style="width: 144.797px;">
<p>Under Review</p>
</td>
<td style="width: 144.328px;">
<p>N/A</p>
</td>
<td style="width: 142.125px;">
<p>N/A</p>
</td>
<td style="width: 147.188px;">
<p>N/A</p>
</td>
</tr>
</tbody>
</table>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


AAREIT


CICT


KREIT


MINT




Period


1Q22


1H21


1H21


1Q22




Gross Revenue (S$ m)


31.8 (+16.8% YoY)


645.7 (+102.8% YoY)


105.8 (+40.2% YoY)


128.1 (29.2% YoY)




NPI (S$ m)


23.1 (+23.9% YoY)


472.2 (+118% YoY)


84.4 (+43.1% YoY)


104.7 (33.1% YoY)




DPU (S$ c)


2.25 (+12.5% YoY)


5.18 (+75% YoY)


2.94 (+5.0% YoY)


3.35 (+16.7% YoY)




NAV per Unit (S$)


1.35


2.05


1.29


1.75




P/B (x)


1.15


1.02


0.93


1.65




Occupancy (%)


95.7


94.9


96.7


94.3 (Overall)
97.8 (North American Portfolio)
93.4 (Singapore Portfolio)




Reversion (%)


Not disclosed


-9.1 (retail)


6.91


Not Disclosed




Gearing (%)


34.3


40.5


38.9


31.0




Cost of Debt (%)


2.8


2.4


1.97


2.7




1 Yr Fwd Yield (%)


6.1


5.19


4.92


1.51




Debt Hedged (%)


77.2


85


68


95.8




Target Price


Under Review


N/A


N/A


N/A




Rating


Under Review


N/A


N/A


N/A





ASEAN Builder's Scoop (28Jul21) - AAREIT Stable Performance

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)

Equity Bottom-Up

<div><div><div><div><ul><li>Results ahead of our estimates: 2H22 revenue grew by 18.9% YoY to S$77.1m and 2H22 NPI jumped 16.6% YoY to S$55.5m.</li></ul><div><div><div><ul><li>Robust rent reversions and occupancy: ~5.9% of portfolio NLA secured new and renewal leases with overall rent reversions at +14.9% (+0.2% in 3Q22) and stable occupancy rate of 97.6% in 4Q22 (3Q22: 97.6%).</li></ul><div><div><div><div><ul><li>Utility cost manageable; Debt sufficiently hedged: Portfolio leases have been structured in a way that utility costs are passed through to tenants, and hence mgmt.</li></ul></div></div></div></div></div></div></div></div></div></div></div>

Results ahead of our estimates: 2H22 revenue grew by 18.9% YoY to S$77.1m and 2H22 NPI jumped 16.6% YoY to S$55.5m.Robust rent reversions and occupancy: ~5.9% of portfolio NLA secured new and renewal leases with overall rent reversions at +14.9% (+0.2% in 3Q22) and stable occupancy rate of 97.6% in 4Q22 (3Q22: 97.6%).Utility cost manageable; Debt sufficiently hedged: Portfolio leases have been structured in a way that utility costs are passed through to tenants, and hence mgmt.

Singapore

AIMS APAC REIT is a real estate investment trust that invests in and manages a diversified portfolio of income-producing industrial, logistics, and business park properties across the Asia-Pacific region. It provides leasing and rental services for assets used in warehousing, distribution, business park, light industrial, high-tech, and manufacturing activities. The company is headquartered in Singapore and was incorporated in 2006.

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AIMS APAC REIT (AAREIT SP)

ASEAN Builder's Scoop (9Sep21)

ART acquires Texas student housing asset; AAREIT conducting due diligence on AUS asset; FRAG applies for delisting; LPKR increases FY21 mktg sales...

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ASEAN Builder's Scoop (8Sep21)

Park Hotel Farrer Park relaunched under IHG; AAREIT new CEO-designate; BSDE invests in DC business; WCTHG selling non-core assets; Phils Aug...

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ASEAN Builder's Scoop (24Aug21)

AAREIT issues S$250m perps; SG resi prices, volume continue rising; RCR offers IPO at 8% premium to NAV; CLI raises stake in reclamation firm MMDC;...

SCCM Asia Research

ASEAN Builder's Scoop (28Jul21) - AAREIT Stable Performance

AAREIT stable performance; CICT office outshines retail; KREIT cautiously optimistic; MINT acq-driven growth; KORE expands with 2 new US acq; CPG...

SCCM Asia Research

Aims Apac Reit - Steady Growth Ahead

FY22 DPU was +5.7 YoY, making up ~106% of our FY forecast. Portfolio occupancy remained high at 97.6%, while rent reversions came in robustly at...

SCCM Asia Research

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