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

Far East Hospitality Trust / Equity Bottom-Up

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-09/Capture_3.PNG' alt='Top 10 SGTI 2021 ranking under Reits and business trusts category' />
 </figure>
 <div class='content-caption'>Top 10 SGTI 2021 ranking under Reits and business trusts category</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
The annual Singapore Governance and Transparency Index (SGTI) assesses Singapore-listed companies on their corporate governance disclosure and practices, as well as the timeliness, accessibility and transparency of their financial results announcement, so as to provide investors with greater transparency and accountability.

The SGTI is a collaboration among CPA Australia, NUS Business School's Centre for Governance and Sustainability, and the Singapore Institute of Directors, supported by The Business Times.

The SGTI 2021, which assessed companies based on their annual reports for Financial Year 2020 released by June 15, 2021, is divided into two categories - general category (519 companies) and the Reits and business trusts category (43 trusts). 
The mean overall scores of both categories reached all-time highs of 68.7 (general category) and 85.0 (Reits and business trusts category) respectively. 
In the REITs and Business Trusts category, Ascott Residence Trust moved up from third place last year to claim the top rank with an overall score of 115.3. 
Far East Hospitality Trust, which scored 113.8 points, moved up two positions to second place and Ascendas REIT jumped from eighth place to enter the top three with 111.1 points. 
In the SGTI 2021 press release, it was noted that these trusts had done well in sustainability management and in disclosing policies on the amount of funds they could borrow to invest for higher returns.

In addition, they have a minimum of three full-time key representatives who each has at least five years of experience relevant to Reit management.

The mean overall score of the Reits and business trust category increased by 0.2 point year on year and the bonus points for good disclosure practices increased by 1.3 points to 18.5 points.

One example of good disclosure, given in the press release, is disclosing information on the succession planning for the board and senior management.

The proportion of companies that disclosed this information increased from 6.7 per cent in 2020 to 30.2 per cent in 2021.

On the other hand, the SGTI press release noted that penalties for poor disclosure practices, such as discrepancies in corporate announcements, increased by 0.1 point to 5.1. 
The proportion of REITs and Business Trusts that received penalty points stood at 9.3 per cent, compared to 4.4 per cent a year ago. 
The top 5 REITs and Property Trusts with the most year-on-year improvements in overall scores include: Ascendas India Trust (+22.8 points), Mapletree Commercial Trust (+19.4 points), Ascendas REIT (+16.7 points), ParkwayLife REIT (+15.1 points) and Frasers Logistics &amp; Commercial Trust (+14.9 points).

<dl></dl>
REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/governance-and-transparency-scores-of-s-reits-hit-all-time-high">read</a><a href="https://www.businesstimes.com.sg/companies-markets/10-s-reits-yielding-long-term-annualised-returns"> </a>the original version.

<dl></dl>
</body></html>


      
    
    Top 10 SGTI 2021 ranking under Reits and business trusts category


The annual Singapore Governance and Transparency Index (SGTI) assesses Singapore-listed companies on their corporate governance disclosure and practices, as well as the timeliness, accessibility and transparency of their financial results announcement, so as to provide investors with greater transparency and accountability.

The SGTI is a collaboration among CPA Australia, NUS Business School's Centre for Governance and Sustainability, and the Singapore Institute of Directors, supported by The Business Times.

The SGTI 2021, which assessed companies based on their annual reports for Financial Year 2020 released by June 15, 2021, is divided into two categories - general category (519 companies) and the Reits and business trusts category (43 trusts).  
The mean overall scores of both categories reached all-time highs of 68.7 (general category) and 85.0 (Reits and business trusts category) respectively.  
In the REITs and Business Trusts category, Ascott Residence Trust moved up from third place last year to claim the top rank with an overall score of 115.3.  
Far East Hospitality Trust, which scored 113.8 points, moved up two positions to second place and Ascendas REIT jumped from eighth place to enter the top three with 111.1 points.  
In the SGTI 2021 press release, it was noted that these trusts had done well in sustainability management and in disclosing policies on the amount of funds they could borrow to invest for higher returns.

In addition, they have a minimum of three full-time key representatives who each has at least five years of experience relevant to Reit management.

The mean overall score of the Reits and business trust category increased by 0.2 point year on year and the bonus points for good disclosure practices increased by 1.3 points to 18.5 points.

One example of good disclosure, given in the press release, is disclosing information on the succession planning for the board and senior management.

The proportion of companies that disclosed this information increased from 6.7 per cent in 2020 to 30.2 per cent in 2021.

On the other hand, the SGTI press release noted that penalties for poor disclosure practices, such as discrepancies in corporate announcements, increased by 0.1 point to 5.1.  
The proportion of REITs and Business Trusts that received penalty points stood at 9.3 per cent, compared to 4.4 per cent a year ago.  
The top 5 REITs and Property Trusts with the most year-on-year improvements in overall scores include: Ascendas India Trust (+22.8 points), Mapletree Commercial Trust (+19.4 points), Ascendas REIT (+16.7 points), ParkwayLife REIT (+15.1 points) and Frasers Logistics &amp; Commercial Trust (+14.9 points).


REIT Watch is a weekly column on The Business Times, read the original version.





REIT Watch - Governance and transparency scores of S-Reits hit all-time high

Capitaland India Trust / Equity Bottom-Up

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2021-08/Capture_14.PNG' alt='Recent SREIT' />
 </figure>
 <div class='content-caption'>Recent SREIT</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>
In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase consideration.

Several acquisitions announced during the period were in assets such as data centres, logistic warehouses, and office buildings.

In addition, the majority of acquisitions that were announced were outside of Singapore, further entrenching Singapore's position as a global Reit hub - over 80 per cent of S-Reits' portfolios have assets that are internationally diverse.

Recent S-REIT acquisitions announced in the month of July totalled $323 million in purchase consideration and were by Ascendas India Trust, Keppel DC REIT, Keppel Pacific Oak US REIT, and Mapletree Logistics Trust. 
Three out of four were overseas acquisitions and two out of four were data-centre-related acquisitions. 
Ascendas India Trust announced on July 5 that it will invest an estimated S$217 million to develop and operate Phase 1 of its first fully-fitted data centre campus in Airoli, a growing data centre hub in Navi Mumbai, in India.

As such, it has announced that it will acquire a 6.6-acre greenfield site for the development which will comprise two buildings. The first building will have a built-up area of about 325,000 sq ft and is scheduled to be ready by Q2 2024.

The trust will be developing its first data centre campus with its sponsor CapitaLand and believes that its foray into the data centre sector in India will diversify its portfolio into an attractive and highly scaleable asset class.

With the acquisition and development of Phase 1 of the data centre campus, the Trust's portfolio size is expected to increase by 1.2 per cent from the approximately 24.9 million sq ft to 25.2 million sq ft.

Mapletree Logistics Trust announced on July 9 that it was granted an option to purchase a logistics property in Singapore at 9 Changi South Street. While the purpose-built facility will be sold with vacant possession, the Reit manager is in talks with an international 3PL to lease the property as an anchor tenant.

The Reit believes that the property is well-poised to benefit from Singapore's position as a key logistics hub and is an accretive acquisition with an expected stabilised property income yield of approximately 6.2 per cent.

Keppel DC Reit on July 26 announced that it has entered into agreements to acquire Guangdong Data Centre, a fully-fitted data centre in Jiangmen, Guangdong Province, marking its first data centre acquisition in China.

The property, which is expected to be built in Q3 2021, is situated within the Bluesea Intelligence Valley Mega Data Centre Campus and is the first of six data centre buildings to be completed. The property will be fully leased to Guangdong Bluesea Data Development on a triple net basis for 15 years.

The acquisition is expected to increase the Reit's portfolio occupancy rate from 98.0 per cent to 98.2 per cent and weighted average lease expiry from 6.5 years to 7.3 years.

As part of this agreement, Keppel DC Reit will have the right of first refusal to acquire the remaining five data centres within the campus.

Keppel Pacific Oak US Reit announced on July 28 that it is deepening its technology footprint in key growth markets in the US with the acquisitions of Nashville and Denver office building assets.

Both office buildings - Bridge Crossing and 105 Edgeview - are 100 per cent leased to tenants mainly in the fast-growing and defensive technology sector.

They include anchor tenants Comdata, which is part of Fleetcor Group, a leading global business payment firm, and Gogo Business Aviation, which is the world's largest provider of broadband connectivity services for the business aviation market.

The Reit expects the pro-forma assets under management to grow by 8.0 per cent to approximately US$1.4 billion and the pro-forma portfolio committed occupancy to increase from 90.5 per cent to 91.2 per cent. REIT Watch is a weekly column on The Business Times, <a href="https://www.businesstimes.com.sg/companies-markets/s-reits-recent-acquisitions-further-entrench-diversity">read </a>the original version.
</body></html>


      
    
    Recent SREIT


In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase consideration.

Several acquisitions announced during the period were in assets such as data centres, logistic warehouses, and office buildings.

In addition, the majority of acquisitions that were announced were outside of Singapore, further entrenching Singapore's position as a global Reit hub - over 80 per cent of S-Reits' portfolios have assets that are internationally diverse.

Recent S-REIT acquisitions announced in the month of July totalled $323 million in purchase consideration and were by Ascendas India Trust, Keppel DC REIT, Keppel Pacific Oak US REIT, and Mapletree Logistics Trust.  
Three out of four were overseas acquisitions and two out of four were data-centre-related acquisitions.  
Ascendas India Trust announced on July 5 that it will invest an estimated S$217 million to develop and operate Phase 1 of its first fully-fitted data centre campus in Airoli, a growing data centre hub in Navi Mumbai, in India.

As such, it has announced that it will acquire a 6.6-acre greenfield site for the development which will comprise two buildings. The first building will have a built-up area of about 325,000 sq ft and is scheduled to be ready by Q2 2024.

The trust will be developing its first data centre campus with its sponsor CapitaLand and believes that its foray into the data centre sector in India will diversify its portfolio into an attractive and highly scaleable asset class.

With the acquisition and development of Phase 1 of the data centre campus, the Trust's portfolio size is expected to increase by 1.2 per cent from the approximately 24.9 million sq ft to 25.2 million sq ft.

Mapletree Logistics Trust announced on July 9 that it was granted an option to purchase a logistics property in Singapore at 9 Changi South Street. While the purpose-built facility will be sold with vacant possession, the Reit manager is in talks with an international 3PL to lease the property as an anchor tenant.

The Reit believes that the property is well-poised to benefit from Singapore's position as a key logistics hub and is an accretive acquisition with an expected stabilised property income yield of approximately 6.2 per cent.

Keppel DC Reit on July 26 announced that it has entered into agreements to acquire Guangdong Data Centre, a fully-fitted data centre in Jiangmen, Guangdong Province, marking its first data centre acquisition in China.

The property, which is expected to be built in Q3 2021, is situated within the Bluesea Intelligence Valley Mega Data Centre Campus and is the first of six data centre buildings to be completed. The property will be fully leased to Guangdong Bluesea Data Development on a triple net basis for 15 years.

The acquisition is expected to increase the Reit's portfolio occupancy rate from 98.0 per cent to 98.2 per cent and weighted average lease expiry from 6.5 years to 7.3 years.

As part of this agreement, Keppel DC Reit will have the right of first refusal to acquire the remaining five data centres within the campus.

Keppel Pacific Oak US Reit announced on July 28 that it is deepening its technology footprint in key growth markets in the US with the acquisitions of Nashville and Denver office building assets.

Both office buildings - Bridge Crossing and 105 Edgeview - are 100 per cent leased to tenants mainly in the fast-growing and defensive technology sector.

They include anchor tenants Comdata, which is part of Fleetcor Group, a leading global business payment firm, and Gogo Business Aviation, which is the world's largest provider of broadband connectivity services for the business aviation market.

The Reit expects the pro-forma assets under management to grow by 8.0 per cent to approximately US$1.4 billion and the pro-forma portfolio committed occupancy to increase from 90.5 per cent to 91.2 per cent.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - S-Reits' recent acquisitions further entrench diversity

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

<div>
Keppel DC REIT (KDCREIT SP) plans to raise up to US$151m (S$204m) via a mix of a private placement. The company will use the proceeds to fund the recent acquisition of its first China data centre and to pay down debt. 
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
We have covered the listing and previous placements for KDC in our earlier notes:
</div><div><ul style="list-style-type: disc;">
<li>Sep 2019 placement for US$273m: <a href="https://www.smartkarma.com/insights/keppel-dc-reit-placement-just-in-time-for-the-index-inclusion" target="_blank" rel="noopener">Keppel DC REIT Placement - Just in Time for the Index Inclusion</a>
</li>
<li>May 2018 placement for US$228m: <a href="https://www.smartkarma.com/insights/keppel-dc-reit-placement-accretive-acquisition-and-probably-expected-dilution" target="_blank" rel="noopener">Keppel DC REIT Placement - Accretive Acquisition and Probably Expected Dilution</a>
</li>
<li>IPO: <a href="https://www.smartkarma.com/insights/first-of-its-kind-exposure-to-rapidly-growing-data-centers" target="_blank" rel="noopener">First of its kind exposure to rapidly growing data centers</a>
</li>
</ul></div>


Keppel DC REIT (KDCREIT SP) plans to raise up to US$151m (S$204m) via a mix of a private placement. The company will use the proceeds to fund the recent acquisition of its first China data centre and to pay down debt. 
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
We have covered the listing and previous placements for KDC in our earlier notes:

Sep 2019 placement for US$273m: Keppel DC REIT Placement - Just in Time for the Index Inclusion

May 2018 placement for US$228m: Keppel DC REIT Placement - Accretive Acquisition and Probably Expected Dilution

IPO: First of its kind exposure to rapidly growing data centers



Keppel DC REIT Placement - Most of the past Deals Have Done Well, Though This Won’t Be Accretive

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: 241.969px;"> </td><td style="width: 241.969px;">CLCT</td><td style="width: 242.062px;">AIT</td></tr><tr><td style="width: 241.969px;">Period</td><td style="width: 241.969px;">1H21</td><td style="width: 242.062px;">1H21</td></tr><tr><td style="width: 241.969px;">Gross Revenue (S$m)</td><td style="width: 241.969px;">176.9 (74.2% YoY)</td><td style="width: 242.062px;">95.4 (-4% YoY)</td></tr><tr><td style="width: 241.969px;">NPI (S$m)</td><td style="width: 241.969px;">120.3 (84.4% YoY)</td><td style="width: 242.062px;">77.3 (+5% YoY)</td></tr><tr><td style="width: 241.969px;">DPU (S$ c)</td><td style="width: 241.969px;">4.23 (40.1% YoY)</td><td style="width: 242.062px;">0.042 (-9% YoY)</td></tr><tr><td style="width: 241.969px;">NAV per Unit (S$)</td><td style="width: 241.969px;">1.57</td><td style="width: 242.062px;">1.1</td></tr><tr><td style="width: 241.969px;">P/B (x)</td><td style="width: 241.969px;">0.86</td><td style="width: 242.062px;">1.32</td></tr><tr><td style="width: 241.969px;">Occupancy (%)</td><td style="width: 241.969px;">95.4 (Retail)94.0 (Business Park)</td><td style="width: 242.062px;">90</td></tr><tr><td style="width: 241.969px;">Reversion (%)</td><td style="width: 241.969px;">-2.1 (Retail)+6.7 (Business Park)</td><td style="width: 242.062px;">+8 (Bangalore)+12 (Chennai)+7-16% (Hyderabad)+21 (Pune)</td></tr><tr><td style="width: 241.969px;">Gearing (%)</td><td style="width: 241.969px;">35.9</td><td style="width: 242.062px;">33</td></tr><tr><td style="width: 241.969px;">Cost of Debt (%)</td><td style="width: 241.969px;">2.57</td><td style="width: 242.062px;">5.3</td></tr><tr><td style="width: 241.969px;">1 Yr Fwd Yield (%)</td><td style="width: 241.969px;">6.67</td><td style="width: 242.062px;">6.41</td></tr><tr><td style="width: 241.969px;">Debt Hedged (%)</td><td style="width: 241.969px;">78</td><td style="width: 242.062px;">77</td></tr><tr><td style="width: 241.969px;">Target Price</td><td style="width: 241.969px;">N/A</td><td style="width: 242.062px;">N/A</td></tr><tr><td style="width: 241.969px;">Rating</td><td style="width: 241.969px;">N/A</td><td style="width: 242.062px;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) CLCTAITPeriod1H211H21Gross Revenue (S$m)176.9 (74.2% YoY)95.4 (-4% YoY)NPI (S$m)120.3 (84.4% YoY)77.3 (+5% YoY)DPU (S$ c)4.23 (40.1% YoY)0.042 (-9% YoY)NAV per Unit (S$)1.571.1P/B (x)0.861.32Occupancy (%)95.4 (Retail)94.0 (Business Park)90Reversion (%)-2.1 (Retail)+6.7 (Business Park)+8 (Bangalore)+12 (Chennai)+7-16% (Hyderabad)+21 (Pune)Gearing (%)35.933Cost of Debt (%)2.575.31 Yr Fwd Yield (%)6.676.41Debt Hedged (%)7877Target PriceN/AN/ARatingN/AN/A

ASEAN Builder's Scoop (29Jul21) - CLCT Consecutive Quarterly Improvements

<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), a subsidiary of Filinvest, aims to raise up to US$240m 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>Given the recent restructuring of the REITs assets, its past financials aren’t of much use. However, looking at the operational data of its existing portfolio, FREIT doesn’t appear to have had a very good FY20 and even FY21 doesn’t appear to be shaping up well.</div><div>
We looked at the background of the REIT in our earlier note, <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>.
In this note, we will comment on valuation and run the deal through our ECM framework.
 
</div>

Filinvest Reit (FILRT PM) (FREIT), a subsidiary of Filinvest, aims to raise up to US$240m 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).Given the recent restructuring of the REITs assets, its past financials aren’t of much use. However, looking at the operational data of its existing portfolio, FREIT doesn’t appear to have had a very good FY20 and even FY21 doesn’t appear to be shaping up well.
We looked at the background of the REIT in our earlier note, Filinvest REIT IPO - Almost like a single asset REIT, COVID hasn’t been kind.
In this note, we will comment on valuation and run the deal through our ECM framework.
  


Filinvest REIT IPO - Hard to Get Excited, Despite the Yield

Singapore

Capitaland India Trust operates as a property trust. The Trust acquires, owns, and develops income-producing real estates such as IT business parks, logistics space, and industrial facilities. Capitaland India Trust serves customers in India.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Capitaland India Trust (CLINT SP)

REIT Watch - Governance and transparency scores of S-Reits hit all-time high

The annual Singapore Governance and Transparency Index (SGTI) assesses Singapore-listed companies on their corporate governance...

Singapore Exchange Ltd (SGX)

REIT Watch - S-Reits' recent acquisitions further entrench diversity

In the first seven months of 2021, S-Reits have announced asset acquisitions exceeding S$7.5 billion in total purchase...

Singapore Exchange Ltd (SGX)

Keppel DC REIT Placement - Most of the past Deals Have Done Well, Though This Won’t Be Accretive

Keppel DC REIT (KDCREIT SP) plans to raise up to US$151m (S$204m) via a mix of a private placement. The company will use the proceeds to fund the...

Sumeet Singh

ASEAN Builder's Scoop (29Jul21) - CLCT Consecutive Quarterly Improvements

CLCT consecutive quarterly improvements; AIT healthy collections, robust reversions; EREIT unvexed by Phase 2; Phils remaining tax reforms still...

SCCM Asia Research

Filinvest REIT IPO - Hard to Get Excited, Despite the Yield

Filinvest Reit (FILRT PM) (FREIT), a subsidiary of Filinvest, aims to raise up to US$240m in its Philippines listing. The REIT is sponsored...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)