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

SCCM Asia Research

Research from SooChow CSSD Capital Markets (Asia)

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)

Thematic (Sector/Industry)

<ul><li><a href="https://www.smartkarma.com/entities/capitaland-investment-ltd-si" target="_blank" data-smartkarma-citation="entities:33774" rel="noopener">CapitaLand Investment (CLI SP)</a> 1Q22 Business Updates – FUM flat QoQ but lodging business picking up the slacks</li><li><a href="https://www.smartkarma.com/entities/sasseur-reit" target="_blank" data-smartkarma-citation="entities:26807" rel="noopener">Sasseur REIT (SASSR SP)</a> 1Q22 DPU +3.6% YoY; Weathering the storm with robust occupancy</li><li><a href="https://www.smartkarma.com/entities/bhg-retail-reit" target="_blank" data-smartkarma-citation="entities:21021" rel="noopener">BHG Retail REIT (BHGREIT SP)</a> 1Q22 Business Updates – Steady and robust occupancy</li></ul>

CapitaLand Investment (CLI SP) 1Q22 Business Updates – FUM flat QoQ but lodging business picking up the slacksSasseur REIT (SASSR SP) 1Q22 DPU +3.6% YoY; Weathering the storm with robust occupancyBHG Retail REIT (BHGREIT SP) 1Q22 Business Updates – Steady and robust occupancy

ASEAN Builder's Scoop (12May22) - CLI Flat FUM but Lodging Picking Up

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

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Singapore Exchange Ltd (SGX)

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Equity Bottom-Up

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    <div class='content-caption'>Five trusts with 100% assets in China</div>
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<p>Listed on SGX are 4 S-Reits and 1 property trust with pure exposure to China. These trusts have assets across sub-sectors such as retail malls, logistics and industrial, and office and business parks based in China.</p>

<p>All 5 trusts have recorded stronger rental income and declared increases in distributions made to unitholders for full year 2021. Common themes across their full-year earnings were resilient portfolio occupancy rates, recovery in shopper footfalls and tenant sales, and contributions from acquisitions despite recent Covid-19 resurgences.<br><br>
CapitaLand China Trust (CLCT), which is diversified across 11 retail assets, five business parks and four logistics properties, reported 37.5 per cent higher FY2021 distribution per unit (DPU) and 85.2 per cent higher annual net property income (NPI) for the year. Increases were due to new contributions from its recently acquired logistics and business park portfolios, Rock Square and CapitaMall Nuohemule.<br><br>
CLCT noted better occupancy rate of 96.3 per cent in FY2021, alongside higher tenant sales and shopper traffic of 16.1 per cent and 9.3 per cent respectively despite mall closures and restrictions due to sporadic Covid-19 outbreaks.</p>

<p>Beyond retail malls, CLCT now has a combined 21.9 per cent exposure to new economy assets through its business park and logistics portfolio which registered 7.0 per cent and 2.7 per cent in rental reversion respectively in FY2021. CLCT is also the first S-Reit to secure a loan linked to the sustainability performance of a China portfolio.<br><br>
Sasseur REIT and its portfolio of four retail outlet malls posted 8.5 per cent growth in DPU and 10.1 per cent growth in entrusted management agreement (EMA) rental income in FY2021, despite COVID-19 disruptions.<br><br>
The Reit saw continued robust consumption trends in the cities where its outlets are located, coupled with intensive promotional efforts with tenants which drove higher sales. Its portfolio occupancy rate rose to 94.5 per cent in Q42021 compared to 93.7 per cent in Q32021. The Reit believes that it will continue to benefit from China's domestic consumption.<br><br>
EC World REIT (ECW) is a specialised logistics and e-commerce logistics REIT with eight properties in Hangzhou and Wuhan. The REIT recorded 12.7 per cent growth in NPI and 16.9 per cent increase in DPU, largely due to the absence of one-off rebates provided to tenants in FY2020. Its portfolio has an occupancy rate of 99.2 per cent as of 31 December 2021 and is diversified across three segments: e-commerce logistics (41.8 per cent of portfolio valuation), port logistics (40.5 per cent), and specialised logistics (17.8 per cent).<br><br>
On Jan 10, 2022, ECW received a formal notice in relation to the compulsory expropriation of Fu Zhuo Industrial and is entitled to receive compensation based on the expropriation valuation. The Reit does not expect the compulsory expropriation to have a material impact on its portfolio and Fu Zhuo Industrial accounts for under 1.5 per cent of its portfolio valuation and 1.6 per cent of its NPI in FY2021.<br><br>
BHG Retail REIT across its six retail malls reported increases of 14.9 per cent in NPI and 11.3 per cent in DPU for FY2021. The REIT noted that its malls continued to see healthy leasing demands with occupancy rate at 97.0 per cent as at 31 December 2021 alongside healthy retention rates. The REIT will remain cautious about risks of COVID-19 resurgence and continues to refresh its malls’ offerings to pursue growth opportunities.<br><br>
Dasin Retail Trust has a portfolio of seven retail malls and registered increases of 10.9 per cent in NPI and 32.5 per cent in DPU for FY2021. It maintains an occupancy rate of 93.9 per cent across a diversified tenant base with no single trade sector contributing over 25.0 per cent of its gross rental income. The Trust Manager also looks to source new expansion opportunities with its new strategic partner and major shareholder Sino-Ocean Capital.<br><br><strong><em>REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/green-shoots-for-retail-and-hospitality-s-reits-amid-new-pandemic-phase"> </a><a href="https://www.businesstimes.com.sg/companies-markets/pure-play-china-s-reits-record-strong-2021-growth-0">read </a>the original version.</em></strong></p>
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    Five trusts with 100% assets in China


Listed on SGX are 4 S-Reits and 1 property trust with pure exposure to China. These trusts have assets across sub-sectors such as retail malls, logistics and industrial, and office and business parks based in China.

All 5 trusts have recorded stronger rental income and declared increases in distributions made to unitholders for full year 2021. Common themes across their full-year earnings were resilient portfolio occupancy rates, recovery in shopper footfalls and tenant sales, and contributions from acquisitions despite recent Covid-19 resurgences.  
CapitaLand China Trust (CLCT), which is diversified across 11 retail assets, five business parks and four logistics properties, reported 37.5 per cent higher FY2021 distribution per unit (DPU) and 85.2 per cent higher annual net property income (NPI) for the year. Increases were due to new contributions from its recently acquired logistics and business park portfolios, Rock Square and CapitaMall Nuohemule.  
CLCT noted better occupancy rate of 96.3 per cent in FY2021, alongside higher tenant sales and shopper traffic of 16.1 per cent and 9.3 per cent respectively despite mall closures and restrictions due to sporadic Covid-19 outbreaks.

Beyond retail malls, CLCT now has a combined 21.9 per cent exposure to new economy assets through its business park and logistics portfolio which registered 7.0 per cent and 2.7 per cent in rental reversion respectively in FY2021. CLCT is also the first S-Reit to secure a loan linked to the sustainability performance of a China portfolio.  
Sasseur REIT and its portfolio of four retail outlet malls posted 8.5 per cent growth in DPU and 10.1 per cent growth in entrusted management agreement (EMA) rental income in FY2021, despite COVID-19 disruptions.  
The Reit saw continued robust consumption trends in the cities where its outlets are located, coupled with intensive promotional efforts with tenants which drove higher sales. Its portfolio occupancy rate rose to 94.5 per cent in Q42021 compared to 93.7 per cent in Q32021. The Reit believes that it will continue to benefit from China's domestic consumption.  
EC World REIT (ECW) is a specialised logistics and e-commerce logistics REIT with eight properties in Hangzhou and Wuhan. The REIT recorded 12.7 per cent growth in NPI and 16.9 per cent increase in DPU, largely due to the absence of one-off rebates provided to tenants in FY2020. Its portfolio has an occupancy rate of 99.2 per cent as of 31 December 2021 and is diversified across three segments: e-commerce logistics (41.8 per cent of portfolio valuation), port logistics (40.5 per cent), and specialised logistics (17.8 per cent).  
On Jan 10, 2022, ECW received a formal notice in relation to the compulsory expropriation of Fu Zhuo Industrial and is entitled to receive compensation based on the expropriation valuation. The Reit does not expect the compulsory expropriation to have a material impact on its portfolio and Fu Zhuo Industrial accounts for under 1.5 per cent of its portfolio valuation and 1.6 per cent of its NPI in FY2021.  
BHG Retail REIT across its six retail malls reported increases of 14.9 per cent in NPI and 11.3 per cent in DPU for FY2021. The REIT noted that its malls continued to see healthy leasing demands with occupancy rate at 97.0 per cent as at 31 December 2021 alongside healthy retention rates. The REIT will remain cautious about risks of COVID-19 resurgence and continues to refresh its malls’ offerings to pursue growth opportunities.  
Dasin Retail Trust has a portfolio of seven retail malls and registered increases of 10.9 per cent in NPI and 32.5 per cent in DPU for FY2021. It maintains an occupancy rate of 93.9 per cent across a diversified tenant base with no single trade sector contributing over 25.0 per cent of its gross rental income. The Trust Manager also looks to source new expansion opportunities with its new strategic partner and major shareholder Sino-Ocean Capital.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Pure-play China S-Reits record strong 2021 growth

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX</strong>.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<h2>BHG Retail REIT</h2>
<h3>Stable growth with resilient portfolio</h3>
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<li>Committed occupancy improved to 97.0% from 93.5% in 2H20 as four portfolio assets saw recovery.</li>
<li>Gross revenue and net property income increased by 10.8% and 6.6% YoY respectively. 2H21 DPU was up by 4% to 1.05 Scts.</li>
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Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.




BHG Retail REIT
Stable growth with resilient portfolio





Committed occupancy improved to 97.0% from 93.5% in 2H20 as four portfolio assets saw recovery.
Gross revenue and net property income increased by 10.8% and 6.6% YoY respectively. 2H21 DPU was up by 4% to 1.05 Scts.











(Non-SGX Report) BHG Retail REIT - Stable Growth with Resilient Portfolio

<ul><li><a href="https://www.smartkarma.com/entities/dasin-retail-trust" target="_blank" data-smartkarma-citation="entities:23743" rel="noopener">Dasin Retail Trust (DASIN SP)</a> 2H21 DPU +10.9% YoY; All eyes remain on the hefty 2022 refinancing burden</li><li><a href="https://www.smartkarma.com/entities/bhg-retail-reit" target="_blank" data-smartkarma-citation="entities:21021" rel="noopener">BHG Retail REIT (BHGREIT SP)</a> 2H21 DPU -0.9% YoY; Steady as she goes with occupancy rates inching higher</li><li><a href="https://www.smartkarma.com/entities/ireit-global" target="_blank" data-smartkarma-citation="entities:10596" rel="noopener">IREIT Global (IREIT SP)</a> 2H21 DPU +7.9% YoY; Continued to trade ~25% below book value despite an attractive 7+% yield</li></ul>

Dasin Retail Trust (DASIN SP) 2H21 DPU +10.9% YoY; All eyes remain on the hefty 2022 refinancing burdenBHG Retail REIT (BHGREIT SP) 2H21 DPU -0.9% YoY; Steady as she goes with occupancy rates inching higherIREIT Global (IREIT SP) 2H21 DPU +7.9% YoY; Continued to trade ~25% below book value despite an attractive 7+% yield

ASEAN Builder's Scoop 28Feb22 - DASIN All Eyes on Mar22 Loan Refinancing

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    <div class='content-caption'>Top 10 performing SREITs since Nov 1, 2021</div>
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<p>Global Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron variant.</p>

<p>Similarly, the 3 sessions saw the iEdge S-Reit Index shave off 3.8 per cent in total returns, ending November with a 2.4 per cent decline.<br><br>
The top five performers over the month of November were firstly, S-REITs with healthcare assets – First REIT (12.2 per cent in total returns) and ParkwayLife REIT (6.6 per cent) – and secondly, S-REITs with assets located in China – Sasseur REIT (4.7 per cent), EC World REIT (3.1 per cent) and BHG Retail REIT (2.9 per cent).<br><br>
As uncertainty over the Omicron variant eased gradually, the iEdge S-Reit Index regained 1.2 per cent over the first 7 sessions of December, bringing its total returns since the start of November to a decline of 1.2 per cent.</p>

<p>S-Reits with healthcare and China-based assets continued to be the top performers over the extended period from the start of November to Dec 9, 2021.<br><br>
These S-REITs were: First REIT (18.0 per cent in total returns), BHG Retail REIT (15.4 per cent), ParkwayLife REIT (8.9 per cent), Sasseur REIT (4.7 per cent) and Mapletree North Asia Commercial Trust (4.5 per cent).<br><br>
First Reit, in its third quarter business update ended Sep 30, 2021, noted that it continued to see performance stabilising, following the restructuring of the master lease agreements for 14 Indonesia hospitals in January 2021 and its recapitalisation efforts in Q12021.</p>

<p>Last week, the trust also unveiled its 2.0 Growth Strategy, which includes diversifying into developed markets, strengthening of capital structure, reshaping of portfolio for capital-efficient growth as well as a pivoting to ride megatrends like ESG (environmental, social and governance).<br><br>
In line with its 2.0 Growth Strategy, First REIT announced the proposed acquisition of 12 nursing homes in Japan from its sponsor, OUE Lippo Healthcare for JPY 24.2 billion.<br><br>
Post-acquisition, First Reit will increase its exposure to developed markets, from 3.6 per cent of its asset value as at H12021, to 27.1 per cent on a pro forma basis.</p>

<p>Sasseur Reit declared distribution per unit (DPU) of 1.831 Singapore cents for Q32021, an increase of 13.4 per cent year on year.</p>

<p>The Reit manager noted that despite strict government regulations, the Reit's outlet sales grew 12.0 per cent quarter on quarter to 996.6 million yuan.</p>

<p>For the 9-month period ended Sep 30, 2021, Sasseur Reit's four outlets registered total sales of 3.02 billion yuan, representing an increase of 21.8 per cent compared to a year ago.</p>

<p>Similarly, EC World Reit announced higher DPU of 1.662 Singapore cents for Q32021, an increase of 19.7 per cent year on year.</p>

<p>Four out of EC World Reit's portfolio of 8 properties cater to the e-commerce logistics sector. The occupancy rate of its Wuhan Meiluote property increased from 79.4 per cent to 84.5 per cent, as it secured a 3-month lease starting Oct 1, 2021, in anticipation of the annual Singles Day sales.</p>

<p>As at Oct 31, 2021, EC World Reit's portfolio occupancy is 99.2 per cent. <br><br><strong><em>REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/pure-play-data-centre-digital-core-reit-to-start-trading-on-monday"> </a><a href="https://www.businesstimes.com.sg/companies-markets/s-reits-with-healthcare-and-china-assets-outshine-in-november">read </a>the original version.</em></strong></p>
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    Top 10 performing SREITs since Nov 1, 2021


Global Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron variant.

Similarly, the 3 sessions saw the iEdge S-Reit Index shave off 3.8 per cent in total returns, ending November with a 2.4 per cent decline.  
The top five performers over the month of November were firstly, S-REITs with healthcare assets – First REIT (12.2 per cent in total returns) and ParkwayLife REIT (6.6 per cent) – and secondly, S-REITs with assets located in China – Sasseur REIT (4.7 per cent), EC World REIT (3.1 per cent) and BHG Retail REIT (2.9 per cent).  
As uncertainty over the Omicron variant eased gradually, the iEdge S-Reit Index regained 1.2 per cent over the first 7 sessions of December, bringing its total returns since the start of November to a decline of 1.2 per cent.

S-Reits with healthcare and China-based assets continued to be the top performers over the extended period from the start of November to Dec 9, 2021.  
These S-REITs were: First REIT (18.0 per cent in total returns), BHG Retail REIT (15.4 per cent), ParkwayLife REIT (8.9 per cent), Sasseur REIT (4.7 per cent) and Mapletree North Asia Commercial Trust (4.5 per cent).  
First Reit, in its third quarter business update ended Sep 30, 2021, noted that it continued to see performance stabilising, following the restructuring of the master lease agreements for 14 Indonesia hospitals in January 2021 and its recapitalisation efforts in Q12021.

Last week, the trust also unveiled its 2.0 Growth Strategy, which includes diversifying into developed markets, strengthening of capital structure, reshaping of portfolio for capital-efficient growth as well as a pivoting to ride megatrends like ESG (environmental, social and governance).  
In line with its 2.0 Growth Strategy, First REIT announced the proposed acquisition of 12 nursing homes in Japan from its sponsor, OUE Lippo Healthcare for JPY 24.2 billion.  
Post-acquisition, First Reit will increase its exposure to developed markets, from 3.6 per cent of its asset value as at H12021, to 27.1 per cent on a pro forma basis.

Sasseur Reit declared distribution per unit (DPU) of 1.831 Singapore cents for Q32021, an increase of 13.4 per cent year on year.

The Reit manager noted that despite strict government regulations, the Reit's outlet sales grew 12.0 per cent quarter on quarter to 996.6 million yuan.

For the 9-month period ended Sep 30, 2021, Sasseur Reit's four outlets registered total sales of 3.02 billion yuan, representing an increase of 21.8 per cent compared to a year ago.

Similarly, EC World Reit announced higher DPU of 1.662 Singapore cents for Q32021, an increase of 19.7 per cent year on year.

Four out of EC World Reit's portfolio of 8 properties cater to the e-commerce logistics sector. The occupancy rate of its Wuhan Meiluote property increased from 79.4 per cent to 84.5 per cent, as it secured a 3-month lease starting Oct 1, 2021, in anticipation of the annual Singles Day sales.

As at Oct 31, 2021, EC World Reit's portfolio occupancy is 99.2 per cent.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits with healthcare and China assets outshine in November

Singapore

BHG Retail REIT is a real estate investment trust (REIT) in Singapore.

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BHG Retail REIT (BHGREIT SP)

ASEAN Builder's Scoop (12May22) - CLI Flat FUM but Lodging Picking Up

SASSR weathering the storm; BHGREIT robust occupancy; CERT office remains weak; IREIT active leasing ongoing; PRIME slowing reversions; DHLT steady...

SCCM Asia Research

REIT Watch - Pure-play China S-Reits record strong 2021 growth

Listed on SGX are 4 S-Reits and 1 property trust with pure exposure to China. These trusts have assets across sub-sectors such...

Singapore Exchange Ltd (SGX)

(Non-SGX Report) BHG Retail REIT - Stable Growth with Resilient Portfolio

Non- SGX Report: These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop 28Feb22 - DASIN All Eyes on Mar22 Loan Refinancing

BHGREIT steady as she goes; IREIT trading ~25% below book; AEW sells 55MS for S$3,450psf; CLD signs S$1.3bn Vietnam MOU; ELITE embarks on new AEI

SCCM Asia Research

REIT Watch - S-Reits with healthcare and China assets outshine in November

Global Reit markets dipped over the last 3 sessions of November, as investors grappled with the unknowns of the Covid Omicron...

Singapore Exchange Ltd (SGX)

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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