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/city-developments-ltd" target="_blank" data-smartkarma-citation="entities:57" rel="noopener">City Developments (CIT SP)</a> sells Sincere stake for US$1; Raises stake in Shenzhen tech park</h3><ul><li>CIT has exited its investment in China-based Sincere Property Group for a consideration of US$1, while raising its stake in a technology park in Shenzhen. CIT has agreed to sell its 63.75% interest in HCP Chongqing Property Development (HCP Cayman) to an unrelated third party incorporated in the Republic of Seychelles. HCP Cayman holds an 80.01% equity interest in Sincere</li><li>The consideration was agreed upon after taking into account Sincere's current liquidity issues and its potential bankruptcy. For FY20, CIT had booked a S$1.78bn impairment for losses attributable to Sincere – effectively writing down 93% of its total investment in Sincere. Concurrently, CIT is increasing its stake in a company that owns 65% of Shenzhen Longgang Tusincere Tech Park. A Shenzhen Longgang District state-owned enterprise holds the remaining 35%</li></ul>

SingaporeCity Developments (CIT SP) sells Sincere stake for US$1; Raises stake in Shenzhen tech parkCIT has exited its investment in China-based Sincere Property Group for a consideration of US$1, while raising its stake in a technology park in Shenzhen. CIT has agreed to sell its 63.75% interest in HCP Chongqing Property Development (HCP Cayman) to an unrelated third party incorporated in the Republic of Seychelles. HCP Cayman holds an 80.01% equity interest in SincereThe consideration was agreed upon after taking into account Sincere's current liquidity issues and its potential bankruptcy. For FY20, CIT had booked a S$1.78bn impairment for losses attributable to Sincere – effectively writing down 93% of its total investment in Sincere. Concurrently, CIT is increasing its stake in a company that owns 65% of Shenzhen Longgang Tusincere Tech Park. A Shenzhen Longgang District state-owned enterprise holds the remaining 35%

<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>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 97.4pt;"> </td><td style="width: 97.4pt;">KDCREIT</td><td style="width: 97.45pt;">MAGIC</td><td style="width: 97.4pt;">ART</td><td style="width: 97.45pt;">KORE (US$)</td><td style="width: 97.4pt;">PREIT</td><td style="width: 97.45pt;">LMRT</td></tr><tr><td style="width: 97.4pt;">Period</td><td style="width: 97.4pt;">2Q21</td><td style="width: 97.45pt;">1Q22</td><td style="width: 97.4pt;">1H21</td><td style="width: 97.45pt;">1H21</td><td style="width: 97.4pt;">2Q21</td><td style="width: 97.45pt;">2Q21</td></tr><tr><td style="width: 97.4pt;">Gross Revenue (S$ m)</td><td style="width: 97.4pt;">68.5 (+7.5% YoY)</td><td style="width: 97.45pt;">103 (+10.0% YoY)</td><td style="width: 97.4pt;">185.0 (-11.2% YoY)</td><td style="width: 97.45pt;">68.38 (-3% YoY)</td><td style="width: 97.4pt;">29.6 (-2.3% YoY)</td><td style="width: 97.45pt;">49.65 (+81.3% YoY)</td></tr><tr><td style="width: 97.4pt;">NPI (S$ m)</td><td style="width: 97.4pt;">62.8 (+6.9% YoY)</td><td style="width: 97.45pt;">78.3 (+14.3% YoY)</td><td style="width: 97.4pt;">82.1 (-7.3% YoY)</td><td style="width: 97.45pt;">40.58 (-3.1% YoY)</td><td style="width: 97.4pt;">27.4 (-2.8% YoY)</td><td style="width: 97.45pt;">31.8 (+148% YoY)</td></tr><tr><td style="width: 97.4pt;">DPU (S$ c)</td><td style="width: 97.4pt;">2.462 (+7.5% YoY)</td><td style="width: 97.45pt;">Not Disclosed</td><td style="width: 97.4pt;">2.050 (+95.2% YoY)</td><td style="width: 97.45pt;">3.16 (+1.9% YoY)</td><td style="width: 97.4pt;">3.38 (+0.7% YoY)</td><td style="width: 97.45pt;">0.09 (-18.2% YoY)</td></tr><tr><td style="width: 97.4pt;">NAV per Unit (S$)</td><td style="width: 97.4pt;">1.21</td><td style="width: 97.45pt;">1.238</td><td style="width: 97.4pt;">1.19</td><td style="width: 97.45pt;">0.82</td><td style="width: 97.4pt;">1.98</td><td style="width: 97.45pt;">0.0955</td></tr><tr><td style="width: 97.4pt;">P/B (x)</td><td style="width: 97.4pt;">2.12</td><td style="width: 97.45pt;">0.83</td><td style="width: 97.4pt;">0.85</td><td style="width: 97.45pt;">0.95</td><td style="width: 97.4pt;">2.38</td><td style="width: 97.45pt;">0.64</td></tr><tr><td style="width: 97.4pt;">Occupancy (%)</td><td style="width: 97.4pt;">98.0</td><td style="width: 97.45pt;">99.8 (Festival Walk)92.9 (Gateway Plaza)99.7 (Sandhill Plaza)98.2 (Japan Properties)95.7 (The Pinnacle Gangnam)</td><td style="width: 97.4pt;">Mid-50</td><td style="width: 97.45pt;">90.5</td><td style="width: 97.4pt;">99.7</td><td style="width: 97.45pt;">83.4</td></tr><tr><td style="width: 97.4pt;">Reversion (%)</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">-34 (Festival Walk)-27 (Gateway Plaza)-4 (Sandhill Plaza)+0.2 (Japan Properties)</td><td style="width: 97.4pt;">Portfolio RevPAU: S$60 (-14% YoY)</td><td style="width: 97.45pt;">+5.4</td><td style="width: 97.4pt;">Not Disclosed</td><td style="width: 97.45pt;">3.4</td></tr><tr><td style="width: 97.4pt;">Gearing (%)</td><td style="width: 97.4pt;">36.7</td><td style="width: 97.45pt;">41.8</td><td style="width: 97.4pt;">35.9</td><td style="width: 97.45pt;">37.1</td><td style="width: 97.4pt;">37</td><td style="width: 97.45pt;">42.5</td></tr><tr><td style="width: 97.4pt;">Cost of Debt (%)</td><td style="width: 97.4pt;">1.5</td><td style="width: 97.45pt;">1.87</td><td style="width: 97.4pt;">1.6</td><td style="width: 97.45pt;">2.82</td><td style="width: 97.4pt;">0.56</td><td style="width: 97.45pt;">6.47</td></tr><tr><td style="width: 97.4pt;">1 Yr Fwd Yield (%)</td><td style="width: 97.4pt;">3.91</td><td style="width: 97.45pt;">6.8</td><td style="width: 97.4pt;">4.16</td><td style="width: 97.45pt;">7.77</td><td style="width: 97.4pt;">2.97</td><td style="width: 97.45pt;">5.5 (annualized 1H21)</td></tr><tr><td style="width: 97.4pt;">Debt Hedged (%)</td><td style="width: 97.4pt;">67</td><td style="width: 97.45pt;">82</td><td style="width: 97.4pt;">50</td><td style="width: 97.45pt;">84.7</td><td style="width: 97.4pt;">82</td><td style="width: 97.45pt;">80.6</td></tr><tr><td style="width: 97.4pt;">Target Price</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">N/A</td><td style="width: 97.45pt;">N/A</td></tr><tr><td style="width: 97.4pt;">Rating</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">NA</td><td style="width: 97.45pt;">N/A</td><td style="width: 97.4pt;">N/A</td><td style="width: 97.45pt;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) KDCREITMAGICARTKORE (US$)PREITLMRTPeriod2Q211Q221H211H212Q212Q21Gross Revenue (S$ m)68.5 (+7.5% YoY)103 (+10.0% YoY)185.0 (-11.2% YoY)68.38 (-3% YoY)29.6 (-2.3% YoY)49.65 (+81.3% YoY)NPI (S$ m)62.8 (+6.9% YoY)78.3 (+14.3% YoY)82.1 (-7.3% YoY)40.58 (-3.1% YoY)27.4 (-2.8% YoY)31.8 (+148% YoY)DPU (S$ c)2.462 (+7.5% YoY)Not Disclosed2.050 (+95.2% YoY)3.16 (+1.9% YoY)3.38 (+0.7% YoY)0.09 (-18.2% YoY)NAV per Unit (S$)1.211.2381.190.821.980.0955P/B (x)2.120.830.850.952.380.64Occupancy (%)98.099.8 (Festival Walk)92.9 (Gateway Plaza)99.7 (Sandhill Plaza)98.2 (Japan Properties)95.7 (The Pinnacle Gangnam)Mid-5090.599.783.4Reversion (%)NA-34 (Festival Walk)-27 (Gateway Plaza)-4 (Sandhill Plaza)+0.2 (Japan Properties)Portfolio RevPAU: S$60 (-14% YoY)+5.4Not Disclosed3.4Gearing (%)36.741.835.937.13742.5Cost of Debt (%)1.51.871.62.820.566.471 Yr Fwd Yield (%)3.916.84.167.772.975.5 (annualized 1H21)Debt Hedged (%)67825084.78280.6Target PriceNAN/ANAN/AN/AN/ARatingNAN/ANAN/AN/AN/A

ASEAN Builder's Scoop (27Jul21) - KDCREIT Maiden China Acq

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55" rel="noopener">Capitaland (CAPL SP)</a> divests partial stakes in six Raffles City developments in China; Exceeded divestment target by ~3x for FY21</h3><ul><li>CAPL has entered into conditional agreements to divest partial stakes in six Raffles City (RC) developments in China to Ping An Life Insurance Company. Ping An will acquire 70.0% onshore stake in RC Beijing, RC Chengdu, RC Ningbo, RC Hangzhou and RC Changning; and 60.0% onshore stake in RC Shanghai</li><li>Post-transaction, CAPL will retain an effective stake of 12.6-30% in each development. Under its signature Raffles City trademarks, CAPL will also continue to provide asset management services for these developments and earn fee income. The agreed value for the portfolio is RMB46.7bn (~S$9.6bn), a 6.7% premium to valuation. Targeted for completion in 3Q21, the transaction is expected to generate net proceeds of more than S$2bn. The transaction is set to bring the total capital recycled across the Group to ~S$11.2bn YTD. This is more than three times the set annual target of S$3bn. Concurrently, its Funds Under Management (“FUM”) grows to S$79.2bn</li><li>Part of the unlocked capital will be used to support the Group’s investment pivot to new economy assets such as business parks, logistics and data centres. CapitaLand plans to grow its China exposure in this sector to S$5bn over the next few years, from the S$1.5bn as at end 2020. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/215/586/original/image004.png?1624844847" class="editor-image img-responsive" data-smartkarma-image-id="215586"></figure></section></li></ul>

SingaporeCapitaland (CAPL SP) divests partial stakes in six Raffles City developments in China; Exceeded divestment target by ~3x for FY21CAPL has entered into conditional agreements to divest partial stakes in six Raffles City (RC) developments in China to Ping An Life Insurance Company. Ping An will acquire 70.0% onshore stake in RC Beijing, RC Chengdu, RC Ningbo, RC Hangzhou and RC Changning; and 60.0% onshore stake in RC ShanghaiPost-transaction, CAPL will retain an effective stake of 12.6-30% in each development. Under its signature Raffles City trademarks, CAPL will also continue to provide asset management services for these developments and earn fee income. The agreed value for the portfolio is RMB46.7bn (~S$9.6bn), a 6.7% premium to valuation. Targeted for completion in 3Q21, the transaction is expected to generate net proceeds of more than S$2bn. The transaction is set to bring the total capital recycled across the Group to ~S$11.2bn YTD. This is more than three times the set annual target of S$3bn. Concurrently, its Funds Under Management (“FUM”) grows to S$79.2bnPart of the unlocked capital will be used to support the Group’s investment pivot to new economy assets such as business parks, logistics and data centres. CapitaLand plans to grow its China exposure in this sector to S$5bn over the next few years, from the S$1.5bn as at end 2020. 

ASEAN Builder's Scoop (28Jun21) - CAPL Divesting 6 RC China Stakes

<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> and The Ascott Limited to jointly develop student accommodation property in the US</h3><ul><li>The Ascott Limited and its hospitality trust, ART, will jointly invest and develop a freehold student accommodation asset located in South Carolina, USA for an expected total amount of US$109.9m (S$146.2m). The 678-bed student accommodation will serve over 35,000 undergraduate and graduate students from the nearby University of South Carolina (USC). Construction of the student accommodation asset is scheduled to start in 3Q21 and complete in 2Q23. At the initial stage, Ascott and ART will jointly invest in the asset to own 45% stake each. A third-party partner, which is a joint venture between one of the largest student housing developers in the USA and a large national real estate developer and contractor based in the USA, will own the remaining 10% stake for alignment of interest</li><li>When the property’s performance stabilises, Ascott and ART will acquire the remaining share from the third-party partner. Ascott has separately formed a partnership with the student housing developer to invest and develop more student accommodation properties in the USA. These properties could become a potential pipeline for ART from its sponsor. The accretive investment in this maiden asset in South Carolina, is expected to increase ART’s pro forma FY20 DPS by about 2.1%. Upon stabilisation, the EBITDA yield is expected to be approximately 6.2%. Gearing will rise to 37.1% post-completion of the development. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/213/297/original/image003+%282%29.png?1623806610" class="editor-image img-responsive" data-smartkarma-image-id="213297"></figure></section></li></ul>

SingaporeAscott Residence Trust (ART SP) and The Ascott Limited to jointly develop student accommodation property in the USThe Ascott Limited and its hospitality trust, ART, will jointly invest and develop a freehold student accommodation asset located in South Carolina, USA for an expected total amount of US$109.9m (S$146.2m). The 678-bed student accommodation will serve over 35,000 undergraduate and graduate students from the nearby University of South Carolina (USC). Construction of the student accommodation asset is scheduled to start in 3Q21 and complete in 2Q23. At the initial stage, Ascott and ART will jointly invest in the asset to own 45% stake each. A third-party partner, which is a joint venture between one of the largest student housing developers in the USA and a large national real estate developer and contractor based in the USA, will own the remaining 10% stake for alignment of interestWhen the property’s performance stabilises, Ascott and ART will acquire the remaining share from the third-party partner. Ascott has separately formed a partnership with the student housing developer to invest and develop more student accommodation properties in the USA. These properties could become a potential pipeline for ART from its sponsor. The accretive investment in this maiden asset in South Carolina, is expected to increase ART’s pro forma FY20 DPS by about 2.1%. Upon stabilisation, the EBITDA yield is expected to be approximately 6.2%. Gearing will rise to 37.1% post-completion of the development. 

ASEAN Builder's Scoop (16Jun21) - ART to Jointly Develop US Student Accommodation

Singapore

Ascendas Hospitality Trust is a stapled trust. The Trust comprises Ascendas Hospitality Real Estate Investment Trust and Ascendas Hospitality Business Trust established with the principal investment strategy of investing, directly or indirectly, in a diversified portfolio of income-producing real estate used predominantly for hospitality purposes located across Asia, Australia and NZ.

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Ascendas Hospitality Trust (ASCHT SP)

ASEAN Builder's Scoop (13Sep21)

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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 (27Jul21) - KDCREIT Maiden China Acq

KDCREIT maiden China acq; MAGIC improvements seen at FW; ART recovery momentum continues; KORE occupancy weakness; PLIFE flattish quarter; LMRT...

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ASEAN Builder's Scoop (28Jun21) - CAPL Divesting 6 RC China Stakes

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ASEAN Builder's Scoop (16Jun21) - ART to Jointly Develop US Student Accommodation

ART to jointly develop US student accommodation; May21 new home sales down 30% MoM, take-up remains elevated; MEG board approves REIT listing;...

SCCM Asia Research

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