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

RL Commercial REIT / Equity Capital Markets

RL Commercial REIT (RREIT), sponsored by Robinsons Land Corporation (RLC), aims to raise up to US$491m in its Philippines listing. In addition, MREIT, sponsored by Megaworld, aims to raise up to US$540m in its Philippines listing.  Both will be a 100% secondary shares offering. We have looked at both the REITs individually in our earlier notes:<ul>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/rl-commercial-reit-pre-ipo-motley-crew-of-assets-has-weathered-covid-well" target="_blank" rel="noopener">RL Commercial REIT Pre-IPO - Motley crew of assets has weathered COVID well</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/mreit-pre-ipo-mediocre-performance-convoluted-lease-low-asset-yield" target="_blank" rel="noopener">MREIT Pre-IPO - Mediocre performance, convoluted lease, low asset yield</a></li>
</ul>Apart from these two REITs we have also covered prior listings of the three currently listed REITs in the Philippines:<ul>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/filinvest-reit-ipo-almost-like-a-single-asset-reit-covid-hasn-t-been-kind" target="_blank" rel="noopener">Filinvest REIT IPO - Almost like a single asset REIT, COVID hasn’t been kind</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/ddpm-reit-pre-ipo-brand-new-assets-but-not-with-the-best-of-outlooks" target="_blank" rel="noopener">DDMP REIT Pre-IPO - Brand new assets but not with the best of outlooks</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/areit-pre-ipo-first-philippines-reit-listing-comes-with-its-peculiarities" target="_blank" rel="noopener">AREIT Pre-IPO - First REIT listing comes with its peculiarities</a></li>
</ul>In this note we will undertake a peer comparison across for the two listing candidates and the three currently listed REITs.

RL Commercial REIT (RREIT), sponsored by Robinsons Land Corporation (RLC), aims to raise up to US$491m in its Philippines listing. In addition, MREIT, sponsored by Megaworld, aims to raise up to US$540m in its Philippines listing.  Both will be a 100% secondary shares offering. We have looked at both the REITs individually in our earlier notes:
RL Commercial REIT Pre-IPO - Motley crew of assets has weathered COVID well
MREIT Pre-IPO - Mediocre performance, convoluted lease, low asset yield
Apart from these two REITs we have also covered prior listings of the three currently listed REITs in the Philippines:
Filinvest REIT IPO - Almost like a single asset REIT, COVID hasn’t been kind
DDMP REIT Pre-IPO - Brand new assets but not with the best of outlooks
AREIT Pre-IPO - First REIT listing comes with its peculiarities
In this note we will undertake a peer comparison across for the two listing candidates and the three currently listed REITs.

RL Commercial REIT and MREIT Peer Comparison - One Is Much Better Shape

<a href="https://www.smartkarma.com/entities/megaworld-real-estate-investment-trust" target="_blank" data-smartkarma-citation="entities:33806:1" rel="noopener">Megaworld Real Estate Investment Trust (MREIT PM)</a>, sponsored by Megaworld, aims to raise up to US$540m in its Philippines listing.  It will be a 100% secondary shares offering. MREIT’s initial portfolio will consist of 10 PEZA-accredited Grade A commercial assets, located in Metro Manila, primarily in Taguig City and Quezon City, and Iloilo City, outside of Metro Manila. The portfolio will have a total GLA of 224,430.8 sqm and was valued at PHP49.3bn as of Mar 21. The Properties had 93.2% portfolio occupancy as at 9M21 (fiscal year ending 30 June 21) and has a WALE of 4.7 years.MREIT will continue to benefit from its Sponsor’s pipeline and its own healthy balance sheet. However, the portfolio wasn’t performing well even prior to the pandemic leading to muted rental income growth from its assets. Moreover, its step-up land lease payments will remain an overhang for future distributions.

Megaworld Real Estate Investment Trust (MREIT PM), sponsored by Megaworld, aims to raise up to US$540m in its Philippines listing.  It will be a 100% secondary shares offering. MREIT’s initial portfolio will consist of 10 PEZA-accredited Grade A commercial assets, located in Metro Manila, primarily in Taguig City and Quezon City, and Iloilo City, outside of Metro Manila. The portfolio will have a total GLA of 224,430.8 sqm and was valued at PHP49.3bn as of Mar 21. The Properties had 93.2% portfolio occupancy as at 9M21 (fiscal year ending 30 June 21) and has a WALE of 4.7 years.MREIT will continue to benefit from its Sponsor’s pipeline and its own healthy balance sheet. However, the portfolio wasn’t performing well even prior to the pandemic leading to muted rental income growth from its assets. Moreover, its step-up land lease payments will remain an overhang for future distributions.

MREIT Pre-IPO - Mediocre Performance, Convoluted Lease, Low Asset Yield

<div><a href="https://www.smartkarma.com/entities/filinvest-reit" target="_blank" data-smartkarma-citation="entities:33764:1" rel="noopener">Filinvest Reit (FILRT PM)</a> (FREIT) raised around US$250m in its Philippines listing. The REIT is sponsored by <a href="https://www.smartkarma.com/entities/filinvest-land-inc" target="_blank" data-smartkarma-citation="entities:23026:1" rel="noopener">Filinvest Land (FLI PM)</a>. </div><div>FREIT’s initial property portfolio consists of 16 office towers located in Northgate Cyberzone, Alabang, and one office tower in Cebu City with an aggregate office space GLA of 299,158 sqm and 2,204 sqm of retail GLA. The portfolio will have a weighted average lease expiry (WALE) of 3.8 years with an occupancy of 89.7% as of Mar 2021. The Properties were valued at PHP48,547.4m (US$965m).</div><div>
We looked at the background of the REIT in our earlier notes:
<ul>
<li><a href="https://www.smartkarma.com/insights/filinvest-reit-ipo-almost-like-a-single-asset-reit-covid-hasn-t-been-kind" target="_blank" rel="noopener">Filinvest REIT IPO - Almost like a single asset REIT, COVID hasn’t been kind, and</a></li>
<li><a href="https://www.smartkarma.com/insights/filinvest-reit-ipo-hard-to-get-excited-despite-the-yield" target="_blank" rel="noopener">Filinvest REIT IPO - Hard to Get Excited, Despite the Yield</a></li>
</ul>
</div><div>In this note, we will talk about the trading dynamics.</div>

Filinvest Reit (FILRT PM) (FREIT) raised around US$250m in its Philippines listing. The REIT is sponsored by Filinvest Land (FLI PM). FREIT’s initial property portfolio consists of 16 office towers located in Northgate Cyberzone, Alabang, and one office tower in Cebu City with an aggregate office space GLA of 299,158 sqm and 2,204 sqm of retail GLA. The portfolio will have a weighted average lease expiry (WALE) of 3.8 years with an occupancy of 89.7% as of Mar 2021. The Properties were valued at PHP48,547.4m (US$965m).
We looked at the background of the REIT in our earlier notes:

Filinvest REIT IPO - Almost like a single asset REIT, COVID hasn’t been kind, and
Filinvest REIT IPO - Hard to Get Excited, Despite the Yield

In this note, we will talk about the trading dynamics.

Filinvest REIT IPO Trading - Set for Another Tepid Debut

RL Commercial REIT (RREIT), sponsored by Robinsons Land Corporation (RLC), aims to raise up to US$491m in its Philippines listing.  It will be a 100% secondary shares offering, where the Sponsor will be selling part of its stake. RREIT is a commercial REIT and its initial portfolio will consist of 14 PEZA-accredited commercial real estate properties located in CBDs across Metro Manila and key cities outside Metro Manila, namely, Naga, Tarlac, Cebu and Davao. The properties will have a total GLA of 425,315 sqm, and are valued at PHP73.9bn as of Jun 21. They are majority Grade A commercial assets, leased primarily for office purposes. The portfolio had an occupancy of 99% and WALE of 4.3 years as of Jun 21.RREIT has weathered the COVID-19 pandemic well. Despite some assets posting weaker occupancies in FY20, the overall occupancy has received to near full occupancy. Although, not all assets have been doing well.

RL Commercial REIT (RREIT), sponsored by Robinsons Land Corporation (RLC), aims to raise up to US$491m in its Philippines listing.  It will be a 100% secondary shares offering, where the Sponsor will be selling part of its stake. RREIT is a commercial REIT and its initial portfolio will consist of 14 PEZA-accredited commercial real estate properties located in CBDs across Metro Manila and key cities outside Metro Manila, namely, Naga, Tarlac, Cebu and Davao. The properties will have a total GLA of 425,315 sqm, and are valued at PHP73.9bn as of Jun 21. They are majority Grade A commercial assets, leased primarily for office purposes. The portfolio had an occupancy of 99% and WALE of 4.3 years as of Jun 21.RREIT has weathered the COVID-19 pandemic well. Despite some assets posting weaker occupancies in FY20, the overall occupancy has received to near full occupancy. Although, not all assets have been doing well.

RL Commercial REIT Pre-IPO - Motley Crew of Assets Has Weathered COVID Well

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>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3><table class="table table-striped"><tbody><tr><td style="width: 141.25pt; height: 14.35pt;"> </td><td style="width: 141.2pt; height: 14.35pt;">PRIME</td><td style="width: 141.2pt; height: 14.35pt;">KORE</td></tr><tr><td style="width: 141.25pt; height: 14.85pt;">Period</td><td style="width: 141.2pt; height: 14.85pt;">1H21</td><td style="width: 141.2pt; height: 14.85pt;">1H21</td></tr><tr><td style="width: 141.25pt; height: 14.9pt;">Gross Revenue (S$m)</td><td style="width: 141.2pt; height: 14.9pt;">72.1 (+1.2% YoY)</td><td style="width: 141.2pt; height: 14.9pt;">68.38 (-3% YoY)</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">NPI (S$m)</td><td style="width: 141.2pt; height: 14.35pt;">46.3 (-2.3% YoY)</td><td style="width: 141.2pt; height: 14.35pt;">40.58 (-3.1% YoY)</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">DPU (S$ c)</td><td style="width: 141.2pt; height: 14.35pt;">3.33 (-5.4% YoY)</td><td style="width: 141.2pt; height: 14.35pt;">3.16 (+1.9% YoY)</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">NAV per Unit (S$)</td><td style="width: 141.2pt; height: 14.35pt;">0.86</td><td style="width: 141.2pt; height: 14.35pt;">0.82</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">P/B (x)</td><td style="width: 141.2pt; height: 14.35pt;">0.98</td><td style="width: 141.2pt; height: 14.35pt;">0.95</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">Occupancy (%)</td><td style="width: 141.2pt; height: 14.35pt;">91.7</td><td style="width: 141.2pt; height: 14.35pt;">90.5</td></tr><tr><td style="width: 141.25pt; height: 7.2pt;">Reversion (%)</td><td style="width: 141.2pt; height: 7.2pt;">10.5</td><td style="width: 141.2pt; height: 7.2pt;">5.4</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">Gearing (%)</td><td style="width: 141.2pt; height: 14.35pt;">34.4</td><td style="width: 141.2pt; height: 14.35pt;">37.1</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">Cost of Debt (%)</td><td style="width: 141.2pt; height: 14.35pt;">3.2</td><td style="width: 141.2pt; height: 14.35pt;">2.82</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">1 Yr Fwd Yield (%)</td><td style="width: 141.2pt; height: 14.35pt;">8.45</td><td style="width: 141.2pt; height: 14.35pt;">7.77</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">Debt Hedged (%)</td><td style="width: 141.2pt; height: 14.35pt;">86%</td><td style="width: 141.2pt; height: 14.35pt;">84.7</td></tr><tr><td style="width: 141.25pt; height: 14.35pt;">Target Price</td><td style="width: 141.2pt; height: 14.35pt;">N/A</td><td style="width: 141.2pt; height: 14.35pt;">N/A</td></tr><tr><td style="width: 141.25pt; height: 14.85pt;">Rating</td><td style="width: 141.2pt; height: 14.85pt;">N/A</td><td style="width: 141.2pt; height: 14.85pt;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) PRIMEKOREPeriod1H211H21Gross Revenue (S$m)72.1 (+1.2% YoY)68.38 (-3% YoY)NPI (S$m)46.3 (-2.3% YoY)40.58 (-3.1% YoY)DPU (S$ c)3.33 (-5.4% YoY)3.16 (+1.9% YoY)NAV per Unit (S$)0.860.82P/B (x)0.980.95Occupancy (%)91.790.5Reversion (%)10.55.4Gearing (%)34.437.1Cost of Debt (%)3.22.821 Yr Fwd Yield (%)8.457.77Debt Hedged (%)86%84.7Target PriceN/AN/ARatingN/AN/A

ASEAN Builder's Scoop (04Aug21) - PRIME High Opex Offset Robust Reversions

Philippines

Ayala Land is the largest property developer in the Philippines with a track record in developing large-scale, integrated, mixed-use, and sustainable estates. It offers a balanced and complementary mix of residential developments, shopping centers, offices, hotels and resorts, construction, property management and strategic investments.

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Ayala Land Inc (ALI PM)

RL Commercial REIT and MREIT Peer Comparison - One Is Much Better Shape

RL Commercial REIT (RREIT) aims to raise up to US$491m in its Philippines listing. In addition, MREIT, sponsored by Megaworld, aims to raise up to...

Sumeet Singh

MREIT Pre-IPO - Mediocre Performance, Convoluted Lease, Low Asset Yield

Megaworld Real Estate Investment Trust (MREIT PM), sponsored by Megaworld, aims to raise up to US$540m in its Philippines listing. It will be a...

Sumeet Singh

Filinvest REIT IPO Trading - Set for Another Tepid Debut

Filinvest Reit (FILRT PM) (FREIT) raised around US$250m in its Philippines listing. The REIT is sponsored by Filinvest Land (FLI PM). FREIT’s...

Sumeet Singh

RL Commercial REIT Pre-IPO - Motley Crew of Assets Has Weathered COVID Well

RL Commercial REIT, sponsored by Robinsons Land Corporation, aims to raise up to US$491m in its Philippines listing. It will be a 100% secondary...

Sumeet Singh

ASEAN Builder's Scoop (04Aug21) - PRIME High Opex Offset Robust Reversions

PRIME high opex offset robust reversions; CERT maiden UK logistics acq; OUE 1H21 earnings reversed from a loss; ALI 1H21 NI +34% YoY on low base,...

SCCM Asia Research

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