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

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Why would you stay mediocre when you can be extraordinary?

This is the motto that spurs real estate veteran Karen Lee to pursue excellence and reach for the stars.

“A former boss gave me this advice – in business, don’t be mediocre,” recalled Lee, the CEO of the manager of SGX-listed ARA LOGOS Logistics Trust. “The mediocre will accept the market, or the status quo, as given, but the great will do better than the market.”

Another wise observation from her 82-year-old father still resonates with her: “Anything is possible if you set your mind to it – if you never try, you will never know.”

For Lee, these exhortations remain touchstones till today. “This is what drives me, and what I share with my team to inspire them to achieve their targets,” she added.

Lee has more than two decades of experience in the real estate industry, including industrial real estate development, asset and investment management, business development, leasing, marketing and property management.

She was appointed the Chief Executive Officer of ARA LOGOS Logistics Trust Management Ltd, the manager of ARA LOGOS Logistics Trust, in August this year. Before this appointment, she was the Head of Asset and Investment Management for LOGOS’s Southeast Asian business. Prior to joining LOGOS, between 2008 and 2018, Lee held a senior management role in Ascendas REIT.

Her career journey in real estate began in 1999 with Jurong Town Corporation (JTC), Singapore’s largest industrial landlord, after she graduated with a Bachelor of Science in Economics with Honours, and Master of Science in Real Estate, from the National University of Singapore.

“It was those years in JTC that helped me understand the industry landscape, and solidified my real estate calling,” she said.

“Many people think real estate is all about brick-and-mortar structures, but it’s actually much more than that – it extends beyond the physical into the unseen, and includes the businesses of tenants, which span different industries with all their colour, as well as relationships with tenants, who are our customers.”

Leveraging Strengths

Listed on SGX Mainboard since 2010, ARA LOGOS Logistics Trust (ALOG), previously known as Cache Logistics Trust, is a real estate investment trust that invests in income-producing real estate used for logistics purposes and real estate-related assets in the Asia Pacific. Its portfolio comprises 27 high-quality logistics warehouse properties located in established logistics clusters across Singapore and Australia.

In March 2020, ARA Asset Management, a leading Asia-Pacific real assets fund manager, completed its acquisition of a majority stake in LOGOS, a logistics real estate specialist across Asia Pacific. Post-acquisition, LOGOS operates as ARA’s exclusive logistics real estate platform and ALOG’s Sponsor. In April 2020, Cache Logistics Trust was rebranded as ARA LOGOS Logistics Trust.

LOGOS has over 6.7 million square metres of property owned and under development, and a completed value of S$14 billion across 24 ventures. As a vertically integrated business, LOGOS manages every aspect of logistics real estate, from sourcing land or facilities, to undertaking development and asset management, on behalf of some of the world’s leading global real estate investors.

“ALOG can now leverage the combined complementary strengths of ARA and LOGOS, realising key benefits such as an enlarged network in key and new high-growth markets, enhanced complementary capabilities and resources, as well as increased attractiveness to a larger pool of institutional investors,” Lee noted.

In October, underscoring the beneficial relationship between ALOG and its Sponsor, the trust unveiled its maiden acquisition under LOGOS’s sponsorship.

The proposed acquisition, which has a total purchase price of more than S$400 million, comprises five logistics properties located in Brisbane, and two fund investments that own a combined portfolio of five logistics assets in New South Wales and Victoria.

Following these acquisitions and fund investments, ALOG's deposited property value will increase by 28.2% to S$1.7 billion on a pro forma basis as at 30 June 2020, from about S$1.3 billion. The portfolio value attributable to Australia is also expected to rise to 47.6% from 32.5%.

“This is a transformational acquisition for ALOG as it expands our footprint across key economic hubs in the East Coast of Australia, and paves the way for our next chapter of growth under LOGOS’s sponsorship,” Lee noted.

And asset acquisitions will continue to drive the trust’s expansion over the next few years, she added.

“ALOG has an Asia-Pacific mandate – we will continue to leverage on our Sponsor’s robust pipeline – totalling S$14 billion – across key markets in Asia Pacific, as well as its expertise, and adopt a disciplined, proactive approach when sourcing for opportunities to grow the trust.”

Resilient Fundamentals

ALOG’s balance sheet also remains resilient. As at 30 September 2020, the trust had a well-balanced debt maturity profile, with aggregate leverage ratio of 40.5%, an interest coverage ratio of 3.7 times, and a weighted average debt maturity of 3.3 years. There are no refinancing requirements until December 2021.

“We continue to proactively manage our portfolio and capital structure to safeguard the long-term sustainability of our unitholders’ interests,” Lee added.

The trust also has deep, established tenant relationships that support its strong retention rate – ALOG’s portfolio occupancy rate remains high at 97%, despite prevailing soft market conditions, and its weighted average lease expiry (WALE) by net lettable area stands at 2.6 years.

Lee is focused on further improving the trust’s WALE, a closely watched industry metric. “Our priority is to reduce ALOG’s trading yield or equity cost, so we can acquire assets at more accretive levels,” she said.

“We’re working hard to boost the specs of our real estate assets – such as customising the specs to meet the needs of our tenants, for example, converting ambient warehouse to air-conditioned ones. This enables us to add value, which spurs tenants to extend their leases and become more sticky.”

The logistics industry’s robust fundamentals also add to ALOG’s bright prospects. The trust’s diversified and high-quality tenant base spans various industry and trade sectors, underpinning the trust’s cashflows and stable operational performance.

“We’re continuing to see stable leasing appetite from existing and prospective tenants for warehouse and prime logistics space across our portfolio, particularly from large-scale end-users, following a flight to quality and the shift to better locations,” Lee said. “This has been underpinned by higher demand from e-commerce, food logistics and third-party logistics players.”

Key growth drivers for the sector include the rise of online transactions and shifts in supply chain management. “We observed that businesses are looking to de-risk, either by diversifying their sources of raw materials or by stockpiling, following the impact of COVID-19 lockdowns. These trends can be seen across Australia and Singapore,” she added.

At the end of the day, this 47-year-old mother of two derives immense satisfaction from the knowledge that she is contributing to the improvement and growth of ALOG’s business.

“For the management of any REIT, there’s always that element of accountability and responsibility, to ensure we deliver on our promises, not only to our unitholders, but also to our tenants,” she added.

Building cohesion and grooming talent in her team are also key focus areas. “I’m likewise accountable to my team mates, and we’re on this transformational journey, not as individuals, but together as a team,” she said with a smile.

This is why trust, integrity and respect are among the key principles that she upholds, and tries to instill in her daughter, 15, and son, 11.

“These are core values in life – the ones that form the basis of your code of ethics, and the foundation of all your relationships – whether professional or personal.” 
 

ARA LOGOS Logistics Trust

Listed on Singapore Exchange on 12 April 2010, ARA LOGOS Logistics Trust (ALOG) is a real estate investment trust that invests in quality income-producing industrial real estate used for logistics purposes, as well as real estate-related assets in the Asia Pacific. As at 30 September 2020, ALOG’s portfolio comprises 27 high-quality logistics warehouse properties strategically located in established logistics clusters in Singapore and Australia. The portfolio has a total gross floor area of approximately 9.0 million square feet valued at approximately S$1.26 billion. 
ALOG is managed by ARA LOGOS Logistics Trust Management Ltd, a wholly owned subsidiary of LOGOS. ARA Asset Management Ltd is a majority shareholder of LOGOS, which operates as ARA’s global logistics real estate platform. LOGOS is a leading logistics property group in Asia Pacific, with over 6.7 million sqm of property owned and under development, and a completed value of S$14 billion across 24 ventures.

The company website is: www.aralogos-reit.com. 
Click <a href="https://www.sgx.com/securities/equities/K2LU">here </a>for the company's StockFacts page. 
For the three months ended 30 September 2020 results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/ONPAM0T5WM09J5WP/636402_ALOG%20-%203Q%20FY20%20Business%20Updates%20-%20Press%20Release.PDF">here</a>. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic 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="https://www.sgx.com/research-education/market-dialogues">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="///C:/Users/tanje/Desktop/Working%20Files/kopi-C/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.
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    ARA-LOGOS-CEO


Why would you stay mediocre when you can be extraordinary?

This is the motto that spurs real estate veteran Karen Lee to pursue excellence and reach for the stars.

“A former boss gave me this advice – in business, don’t be mediocre,” recalled Lee, the CEO of the manager of SGX-listed ARA LOGOS Logistics Trust. “The mediocre will accept the market, or the status quo, as given, but the great will do better than the market.”

Another wise observation from her 82-year-old father still resonates with her: “Anything is possible if you set your mind to it – if you never try, you will never know.”

For Lee, these exhortations remain touchstones till today. “This is what drives me, and what I share with my team to inspire them to achieve their targets,” she added.

Lee has more than two decades of experience in the real estate industry, including industrial real estate development, asset and investment management, business development, leasing, marketing and property management.

She was appointed the Chief Executive Officer of ARA LOGOS Logistics Trust Management Ltd, the manager of ARA LOGOS Logistics Trust, in August this year. Before this appointment, she was the Head of Asset and Investment Management for LOGOS’s Southeast Asian business. Prior to joining LOGOS, between 2008 and 2018, Lee held a senior management role in Ascendas REIT.

Her career journey in real estate began in 1999 with Jurong Town Corporation (JTC), Singapore’s largest industrial landlord, after she graduated with a Bachelor of Science in Economics with Honours, and Master of Science in Real Estate, from the National University of Singapore.

“It was those years in JTC that helped me understand the industry landscape, and solidified my real estate calling,” she said.

“Many people think real estate is all about brick-and-mortar structures, but it’s actually much more than that – it extends beyond the physical into the unseen, and includes the businesses of tenants, which span different industries with all their colour, as well as relationships with tenants, who are our customers.”

Leveraging Strengths

Listed on SGX Mainboard since 2010, ARA LOGOS Logistics Trust (ALOG), previously known as Cache Logistics Trust, is a real estate investment trust that invests in income-producing real estate used for logistics purposes and real estate-related assets in the Asia Pacific. Its portfolio comprises 27 high-quality logistics warehouse properties located in established logistics clusters across Singapore and Australia.

In March 2020, ARA Asset Management, a leading Asia-Pacific real assets fund manager, completed its acquisition of a majority stake in LOGOS, a logistics real estate specialist across Asia Pacific. Post-acquisition, LOGOS operates as ARA’s exclusive logistics real estate platform and ALOG’s Sponsor. In April 2020, Cache Logistics Trust was rebranded as ARA LOGOS Logistics Trust.

LOGOS has over 6.7 million square metres of property owned and under development, and a completed value of S$14 billion across 24 ventures. As a vertically integrated business, LOGOS manages every aspect of logistics real estate, from sourcing land or facilities, to undertaking development and asset management, on behalf of some of the world’s leading global real estate investors.

“ALOG can now leverage the combined complementary strengths of ARA and LOGOS, realising key benefits such as an enlarged network in key and new high-growth markets, enhanced complementary capabilities and resources, as well as increased attractiveness to a larger pool of institutional investors,” Lee noted.

In October, underscoring the beneficial relationship between ALOG and its Sponsor, the trust unveiled its maiden acquisition under LOGOS’s sponsorship.

The proposed acquisition, which has a total purchase price of more than S$400 million, comprises five logistics properties located in Brisbane, and two fund investments that own a combined portfolio of five logistics assets in New South Wales and Victoria.

Following these acquisitions and fund investments, ALOG's deposited property value will increase by 28.2% to S$1.7 billion on a pro forma basis as at 30 June 2020, from about S$1.3 billion. The portfolio value attributable to Australia is also expected to rise to 47.6% from 32.5%.

“This is a transformational acquisition for ALOG as it expands our footprint across key economic hubs in the East Coast of Australia, and paves the way for our next chapter of growth under LOGOS’s sponsorship,” Lee noted.

And asset acquisitions will continue to drive the trust’s expansion over the next few years, she added.

“ALOG has an Asia-Pacific mandate – we will continue to leverage on our Sponsor’s robust pipeline – totalling S$14 billion – across key markets in Asia Pacific, as well as its expertise, and adopt a disciplined, proactive approach when sourcing for opportunities to grow the trust.”

Resilient Fundamentals

ALOG’s balance sheet also remains resilient. As at 30 September 2020, the trust had a well-balanced debt maturity profile, with aggregate leverage ratio of 40.5%, an interest coverage ratio of 3.7 times, and a weighted average debt maturity of 3.3 years. There are no refinancing requirements until December 2021.

“We continue to proactively manage our portfolio and capital structure to safeguard the long-term sustainability of our unitholders’ interests,” Lee added.

The trust also has deep, established tenant relationships that support its strong retention rate – ALOG’s portfolio occupancy rate remains high at 97%, despite prevailing soft market conditions, and its weighted average lease expiry (WALE) by net lettable area stands at 2.6 years.

Lee is focused on further improving the trust’s WALE, a closely watched industry metric. “Our priority is to reduce ALOG’s trading yield or equity cost, so we can acquire assets at more accretive levels,” she said.

“We’re working hard to boost the specs of our real estate assets – such as customising the specs to meet the needs of our tenants, for example, converting ambient warehouse to air-conditioned ones. This enables us to add value, which spurs tenants to extend their leases and become more sticky.”

The logistics industry’s robust fundamentals also add to ALOG’s bright prospects. The trust’s diversified and high-quality tenant base spans various industry and trade sectors, underpinning the trust’s cashflows and stable operational performance.

“We’re continuing to see stable leasing appetite from existing and prospective tenants for warehouse and prime logistics space across our portfolio, particularly from large-scale end-users, following a flight to quality and the shift to better locations,” Lee said. “This has been underpinned by higher demand from e-commerce, food logistics and third-party logistics players.”

Key growth drivers for the sector include the rise of online transactions and shifts in supply chain management. “We observed that businesses are looking to de-risk, either by diversifying their sources of raw materials or by stockpiling, following the impact of COVID-19 lockdowns. These trends can be seen across Australia and Singapore,” she added.

At the end of the day, this 47-year-old mother of two derives immense satisfaction from the knowledge that she is contributing to the improvement and growth of ALOG’s business.

“For the management of any REIT, there’s always that element of accountability and responsibility, to ensure we deliver on our promises, not only to our unitholders, but also to our tenants,” she added.

Building cohesion and grooming talent in her team are also key focus areas. “I’m likewise accountable to my team mates, and we’re on this transformational journey, not as individuals, but together as a team,” she said with a smile.

This is why trust, integrity and respect are among the key principles that she upholds, and tries to instill in her daughter, 15, and son, 11.

“These are core values in life – the ones that form the basis of your code of ethics, and the foundation of all your relationships – whether professional or personal.” 
 

ARA LOGOS Logistics Trust

Listed on Singapore Exchange on 12 April 2010, ARA LOGOS Logistics Trust (ALOG) is a real estate investment trust that invests in quality income-producing industrial real estate used for logistics purposes, as well as real estate-related assets in the Asia Pacific. As at 30 September 2020, ALOG’s portfolio comprises 27 high-quality logistics warehouse properties strategically located in established logistics clusters in Singapore and Australia. The portfolio has a total gross floor area of approximately 9.0 million square feet valued at approximately S$1.26 billion.  
ALOG is managed by ARA LOGOS Logistics Trust Management Ltd, a wholly owned subsidiary of LOGOS. ARA Asset Management Ltd is a majority shareholder of LOGOS, which operates as ARA’s global logistics real estate platform. LOGOS is a leading logistics property group in Asia Pacific, with over 6.7 million sqm of property owned and under development, and a completed value of S$14 billion across 24 ventures.

The company website is: www.aralogos-reit.com.  
Click here for the company's StockFacts page.  
For the three months ended 30 September 2020 results, click here. 
 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic 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.t@sgx.com.



ARA LOGOS Logistics Trust Embarks on New Growth Chapter

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Event-Driven

In this Smartkarma Webinar, <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> will discuss the hostile situation between <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> and ARA Asset Management, further described in <a href="https://www.smartkarma.com/insights/cromwell-ara-a-festering-relationship" target="_blank" data-smartkarma-citation="insights:40614" rel="noopener">Cromwell/ARA: A Festering Relationship</a>.<div><h3>The webinar will be hosted on Wednesday, 15/July/2020, 5.00pm SGT/HKT.</h3></div><hr><div><div><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=83779111093" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div></div></div><hr><div>David is a highly experienced analyst with more than 20 years covering Asia Pacific equities, the past 13 years immersed in event strategies encompassing M&amp;A risk arbitrage, directional long/short, stub trades and restructuring.</div>

In this Smartkarma Webinar, David Blennerhassett will discuss the hostile situation between Cromwell Property (CMW AU) and ARA Asset Management, further described in Cromwell/ARA: A Festering Relationship.The webinar will be hosted on Wednesday, 15/July/2020, 5.00pm SGT/HKT.Register for the Webinar hereDavid is a highly experienced analyst with more than 20 years covering Asia Pacific equities, the past 13 years immersed in event strategies encompassing M&amp;A risk arbitrage, directional long/short, stub trades and restructuring.

Smartkarma Webinar | Cromwell/​ARA: A Festering Relationship

Independent Asian Credit Research, Bondcritic

Warut Promboon

Independent Asian Credit Research

Asian Fixed Income/Frontier Market Research

Bondcritic

Bondcritic, established in 2009, is designed to be an independent credit research voice that helps investors gain insights and unbiased analyses on Asian fixed income market. Our mission is to discover deep-value Asian high-yield and distressed bonds with a bottom-up approach, together with the help of our proprietary ESG (Environmental, Social Development, and Governance) model. At the same time, we focus on bringing investment cases of unrated and unloved issuers to the general public.

Credit

Lippo Malls Indonesia Retail Trust / Credit

We initiate our coverage on <a href="https://www.smartkarma.com/entities/lippo-malls-indonesia-retail-trust" target="_blank" data-smartkarma-citation="entities:10946:1" rel="noopener">Lippo Malls Indonesia Retail Trust (LMRT SP)</a> (LMIRT)’s SGD bonds with an NEUTRAL recommendation on LMRTSP 4.15% maturing on 22-June 2020 (less than a month from the time of this report) at 5.6% yield-to-maturity (YTM) at the time of this report, and an UNDERWEIGHT recommendation on its other three bonds including two perpetual bonds (LMRTSP 6.6% and 7% Perpetual (in SGD)) and LMRTSP 7.25% 6/24 (in USD)).Our recommendations are based on our expectation of LMIRT’s sufficient liquidity to redeem LMRTS 6/20s in 2Q’20 on our expectation of a significant deterioration in LMIRT’s operating earnings this quarter as a result of COVID-19. However, we believe LMIRT 6/20s are simply not attractive versus peers.We question LMIRT’s liquidity beyond this quarter. We are less certain about the company’s liquidity position beyond 2Q’20 on a possible extension of closure of its retail malls and spaces due to the prolonged COVID-19 pandemic and the company’s proposed SGD325.4mn acquisition of Strata Title Units of Lippo Mall Puri expectedly to be completed no later than end-2020 while funding sources for this acquisition remain unclear.   If COVID-19 prolongs, resulting in continued mall closures in June and going into 3Q’20, LMIRT’s revenue could break Moody’s threshold of 15% revenue decline in 2020, triggering Moody’s to downgrade LMIRT’s rating.  We also do not rule out any preemptive downgrade if there is some certainty on, e.g., a delay of the scheduled asset divestments that will show that the company’s liquidity position is dire leading to a possible default on LMIRT’s obligations. Uncertainty over LMIRT’s cashflow and downgrade risk this year is asymmetrical downside risk which leads us not to recommend buying its other longer-dated bonds, including LMRTSP 6/24s at 12.5% YTM which we believe could go even higher.

We initiate our coverage on Lippo Malls Indonesia Retail Trust (LMRT SP) (LMIRT)’s SGD bonds with an NEUTRAL recommendation on LMRTSP 4.15% maturing on 22-June 2020 (less than a month from the time of this report) at 5.6% yield-to-maturity (YTM) at the time of this report, and an UNDERWEIGHT recommendation on its other three bonds including two perpetual bonds (LMRTSP 6.6% and 7% Perpetual (in SGD)) and LMRTSP 7.25% 6/24 (in USD)).Our recommendations are based on our expectation of LMIRT’s sufficient liquidity to redeem LMRTS 6/20s in 2Q’20 on our expectation of a significant deterioration in LMIRT’s operating earnings this quarter as a result of COVID-19. However, we believe LMIRT 6/20s are simply not attractive versus peers.We question LMIRT’s liquidity beyond this quarter. We are less certain about the company’s liquidity position beyond 2Q’20 on a possible extension of closure of its retail malls and spaces due to the prolonged COVID-19 pandemic and the company’s proposed SGD325.4mn acquisition of Strata Title Units of Lippo Mall Puri expectedly to be completed no later than end-2020 while funding sources for this acquisition remain unclear.   If COVID-19 prolongs, resulting in continued mall closures in June and going into 3Q’20, LMIRT’s revenue could break Moody’s threshold of 15% revenue decline in 2020, triggering Moody’s to downgrade LMIRT’s rating.  We also do not rule out any preemptive downgrade if there is some certainty on, e.g., a delay of the scheduled asset divestments that will show that the company’s liquidity position is dire leading to a possible default on LMIRT’s obligations. Uncertainty over LMIRT’s cashflow and downgrade risk this year is asymmetrical downside risk which leads us not to recommend buying its other longer-dated bonds, including LMRTSP 6/24s at 12.5% YTM which we believe could go even higher.

Lippo Malls Indonesia Retail Trust: No Malls, No Mercy

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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

<a href="https://www.smartkarma.com/entities/27983" target="_blank" data-smartkarma-citation="entities:27983:1">ESR Cayman (ESR HK)</a> aims to raise up to US$1.2bn in its planned Hong Kong listing. The company is backed by Warburg Pincus.In my earlier insights:<ul>
<li>I touched upon the company's business model and provided an overview of its operations, <a href="https://www.smartkarma.com/insights/esr-cayman-pre-ipo-a-giant-in-the-making" target="_blank">ESR Cayman Pre-IPO - A Giant in the Making</a>; </li>
<li>Talked about the financials and the drivers for each of the three segments, <a href="https://www.smartkarma.com/insights/esr-cayman-pre-ipo-earnings-and-segment-analysis" target="_blank">ESR Cayman Pre-IPO - Earnings and Segment Analysis</a>.</li>
<li>Derived valuation for each of the segments: <a href="https://www.smartkarma.com/insights/esr-cayman-pre-ipo-first-stab-at-valuation" target="_blank">ESR Cayman Pre-IPO- First Stab at Valuation</a>
</li>
<li>Provided updates from the PHIP: <a href="https://www.smartkarma.com/insights/esr-cayman-pre-ipo-updates-from-phip-growth-remains-on-track" target="_blank">ESR Cayman Pre-IPO - Updates from PHIP - Growth Remains on Track</a>
</li>
<li>Provided an update on valuations and key risks: <a href="https://www.smartkarma.com/insights/esr-cayman-pre-ipo-updated-valuation-and-key-risks" target="_blank">ESR Cayman Pre-IPO - Updated Valuation and Key Risks</a>
</li>
<li>Did a quick comparison with peers: <a href="https://www.smartkarma.com/insights/esr-cayman-pre-ipo-peer-comparison-quick-take-bigger-than-some-much-smaller-than-others" target="_blank">ESR Cayman Pre-IPO - Peer Comparison Quick Take - Bigger than Some, Much Smaller than Others</a>
</li>
</ul>In this insight, I'll run the deal through our framework and comment on final valuations.

ESR Cayman (ESR HK) aims to raise up to US$1.2bn in its planned Hong Kong listing. The company is backed by Warburg Pincus.In my earlier insights:
I touched upon the company's business model and provided an overview of its operations, ESR Cayman Pre-IPO - A Giant in the Making; 
Talked about the financials and the drivers for each of the three segments, ESR Cayman Pre-IPO - Earnings and Segment Analysis.
Derived valuation for each of the segments: ESR Cayman Pre-IPO- First Stab at Valuation

Provided updates from the PHIP: ESR Cayman Pre-IPO - Updates from PHIP - Growth Remains on Track

Provided an update on valuations and key risks: ESR Cayman Pre-IPO - Updated Valuation and Key Risks

Did a quick comparison with peers: ESR Cayman Pre-IPO - Peer Comparison Quick Take - Bigger than Some, Much Smaller than Others

In this insight, I'll run the deal through our framework and comment on final valuations.

ARA US Hospitality Trust / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/28048" target="_blank" data-smartkarma-citation="entities:28048:1">ARA US Hospitality Trust (HOTEL SP)</a> (ARAHT) plans to raise upto US$450m via its IPO on SGX. The initial portfolio comprises of 38 hotels in the US and was recently purchased by ARA from Lone Star. Lone Star in turn had bought the assets from <a href="https://www.smartkarma.com/entities/1912" target="_blank" data-smartkarma-citation="entities:1912:1">Hyatt Hotels Corp Cl A (H US)</a> in 2014.
ARAHT is being offered at 7.8% FY19 and 8.0% FY20 yield. Over the past few years, the portfolio hasn't really recorded much growth. The Hyatt House brand has been doing better than the Hyatt Place Hotels. ARAHT expects this trend to reverse going forward, for reasons that haven't been mentioned. Even then, the forecast growth rate is only of 3.2%.
Moreover as most of the assets were recently refurbished there don't seem to be any asset enhancement opportunities. To add to that, the sponsor doesn't have a ready pipeline of assets either for future injections.

ARA US Hospitality Trust (HOTEL SP) (ARAHT) plans to raise upto US$450m via its IPO on SGX. The initial portfolio comprises of 38 hotels in the US and was recently purchased by ARA from Lone Star. Lone Star in turn had bought the assets from Hyatt Hotels Corp Cl A (H US) in 2014.
ARAHT is being offered at 7.8% FY19 and 8.0% FY20 yield. Over the past few years, the portfolio hasn't really recorded much growth. The Hyatt House brand has been doing better than the Hyatt Place Hotels. ARAHT expects this trend to reverse going forward, for reasons that haven't been mentioned. Even then, the forecast growth rate is only of 3.2%.
Moreover as most of the assets were recently refurbished there don't seem to be any asset enhancement opportunities. To add to that, the sponsor doesn't have a ready pipeline of assets either for future injections.

ARA US Hospitality Trust IPO - Matured Portfolio with Few Signs of Growth

Singapore

ARA Asset Management Limited is a real estate fund management company that focuses on the management of public-listed real estate investment trusts, REITs. The Company manages REITs, private real estate funds, specialist equity funds and offers corporate finance advisory services.

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Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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