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-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> marks foray into Sydney office market with A$330.7m acquisition; +3.1% DPU accretive</li><li><a href="https://www.smartkarma.com/entities/far-east-hospitality-trust" target="_blank" data-smartkarma-citation="entities:19061" rel="noopener">Far East Hospitality Trust (FEHT SP)</a> divests Central Square to City Developments (CIT SP); Realizing its 0.73x P/B potential</li><li><a href="https://www.smartkarma.com/entities/frasers-logistics-commercial-trust" target="_blank" data-smartkarma-citation="entities:22748" rel="noopener">Frasers Logistics &amp; Commercial Trust (FLT SP)</a> to divest industrial buildings in Port Melbourne for A$42.5m</li></ul>

Capitaland Integrated Commercial Trust (CICT SP) marks foray into Sydney office market with A$330.7m acquisition; +3.1% DPU accretiveFar East Hospitality Trust (FEHT SP) divests Central Square to City Developments (CIT SP); Realizing its 0.73x P/B potentialFrasers Logistics &amp; Commercial Trust (FLT SP) to divest industrial buildings in Port Melbourne for A$42.5m

ASEAN Builder's Scoop (3Dec21) - CICT Enters Sydney Office Market

<ul>
<li>Capitaland Integrated Commercial Trust (CICT SP) to receive net proceeds of S$344.8m from One George Street’s 50% stake divestment</li>
<li>CanningHill Piers by CapitaLand Development and City Developments (CIT SP) launched at S$2,836psf</li>
<li>New private home sales rose 8.3% MoM in Oct21.</li>
</ul>


Capitaland Integrated Commercial Trust (CICT SP) to receive net proceeds of S$344.8m from One George Street’s 50% stake divestment
CanningHill Piers by CapitaLand Development and City Developments (CIT SP) launched at S$2,836psf
New private home sales rose 8.3% MoM in Oct21.


ASEAN Builder's Scoop (15Nov21) - CICT Divests 50% Stake of OGS

<h2>Singapore</h2>SREITs results in a glance (see detailed spreadsheet and calendar attached)<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/237/199/original/image_71648546021635124700450.png?1635124703" class="editor-image img-responsive" data-smartkarma-image-id="237199"></figure><h3><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> 3Q21 Business Updates – Hopeful for a stronger 4Q21</h3><ul><li>3Q21 revenue and NPI increased by 118.9% and 132.2% YoY to S$329m and S$242.6m, respectively, bringing 9M21 gross revenue and NPI to S$974.7m (+108% YoY) and S$714.8m (+122.8% YoY), respectively. CICT’s enlarged portfolio as well as 100% contribution from Raffles City Singapore (RCS) helped to boost 9M21 performance. In 3Q21, CICT granted less than S$2m of rental waivers. 3Q21 DPU was undisclosed</li><li>Overall portfolio occupancy dipped slightly to 94.4% in 3Q21 (vs. 94.9% in 2Q21 and 95.9% in 1Q21). Portfolio WALE (by GRI) stood at 3 years</li><li>Retail: 9M21 shopper traffic inched up 0.9% YoY, while tenants’ sales improved by 1% YoY (retention rate of 82.4%), shaving off from 1H21’s 4.2%/5.3% YoY improvement. Retail occupancy dipped to 96.4% (vs. 97% in 2Q21 and 97.1% in 1Q21). Clarke Quay and Bugis+ were the largest dampeners on the portfolio with occupancies falling 3.5ppts/2.8ppts from 2Q21, respectively, while rental reversions (incoming avg. rents vs outgoing avg. rents) continued to decline, albeit at a slower pace of -3.8% (vs. 1H21: -4.5%). Retail WALE (by GRI) held at 1.9 years</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached)Capitaland Integrated Commercial Trust (CICT SP) 3Q21 Business Updates – Hopeful for a stronger 4Q213Q21 revenue and NPI increased by 118.9% and 132.2% YoY to S$329m and S$242.6m, respectively, bringing 9M21 gross revenue and NPI to S$974.7m (+108% YoY) and S$714.8m (+122.8% YoY), respectively. CICT’s enlarged portfolio as well as 100% contribution from Raffles City Singapore (RCS) helped to boost 9M21 performance. In 3Q21, CICT granted less than S$2m of rental waivers. 3Q21 DPU was undisclosedOverall portfolio occupancy dipped slightly to 94.4% in 3Q21 (vs. 94.9% in 2Q21 and 95.9% in 1Q21). Portfolio WALE (by GRI) stood at 3 yearsRetail: 9M21 shopper traffic inched up 0.9% YoY, while tenants’ sales improved by 1% YoY (retention rate of 82.4%), shaving off from 1H21’s 4.2%/5.3% YoY improvement. Retail occupancy dipped to 96.4% (vs. 97% in 2Q21 and 97.1% in 1Q21). Clarke Quay and Bugis+ were the largest dampeners on the portfolio with occupancies falling 3.5ppts/2.8ppts from 2Q21, respectively, while rental reversions (incoming avg. rents vs outgoing avg. rents) continued to decline, albeit at a slower pace of -3.8% (vs. 1H21: -4.5%). Retail WALE (by GRI) held at 1.9 years

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> – Capitalizing on post-Covid trends (BUY; TP S$2.57/unit)</h3>The transformative merger between CCT and CMT puts forth stronger value propositions: (i) Largest proxy to SG commercial real estate with a diversified and resilient portfolio; (ii) Potential synergies to unlock and benefit from economies of scale; and (iii) Greater financial flexibility and investment opportunities. With recovery underway, we resume coverage with BUY rating and TP $2.57/unit. CICT currently trades at 5.8% FY22E yield and 1.0x P/B.

SingaporeCapitaland Integrated Commercial Trust (CICT SP) – Capitalizing on post-Covid trends (BUY; TP S$2.57/unit)The transformative merger between CCT and CMT puts forth stronger value propositions: (i) Largest proxy to SG commercial real estate with a diversified and resilient portfolio; (ii) Potential synergies to unlock and benefit from economies of scale; and (iii) Greater financial flexibility and investment opportunities. With recovery underway, we resume coverage with BUY rating and TP $2.57/unit. CICT currently trades at 5.8% FY22E yield and 1.0x P/B.

<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: 147.562px;">
 
</td>
<td style="width: 144.797px;">
AAREIT
</td>
<td style="width: 144.328px;">
CICT
</td>
<td style="width: 142.125px;">
KREIT
</td>
<td style="width: 147.188px;">
MINT
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Period
</td>
<td style="width: 144.797px;">
1Q22
</td>
<td style="width: 144.328px;">
1H21
</td>
<td style="width: 142.125px;">
1H21
</td>
<td style="width: 147.188px;">
1Q22
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Gross Revenue (S$ m)
</td>
<td style="width: 144.797px;">
31.8 (+16.8% YoY)
</td>
<td style="width: 144.328px;">
645.7 (+102.8% YoY)
</td>
<td style="width: 142.125px;">
105.8 (+40.2% YoY)
</td>
<td style="width: 147.188px;">
128.1 (29.2% YoY)
</td>
</tr>
<tr>
<td style="width: 147.562px;">
NPI (S$ m)
</td>
<td style="width: 144.797px;">
23.1 (+23.9% YoY)
</td>
<td style="width: 144.328px;">
472.2 (+118% YoY)
</td>
<td style="width: 142.125px;">
84.4 (+43.1% YoY)
</td>
<td style="width: 147.188px;">
104.7 (33.1% YoY)
</td>
</tr>
<tr>
<td style="width: 147.562px;">
DPU (S$ c)
</td>
<td style="width: 144.797px;">
2.25 (+12.5% YoY)
</td>
<td style="width: 144.328px;">
5.18 (+75% YoY)
</td>
<td style="width: 142.125px;">
2.94 (+5.0% YoY)
</td>
<td style="width: 147.188px;">
3.35 (+16.7% YoY)
</td>
</tr>
<tr>
<td style="width: 147.562px;">
NAV per Unit (S$)
</td>
<td style="width: 144.797px;">
1.35
</td>
<td style="width: 144.328px;">
2.05
</td>
<td style="width: 142.125px;">
1.29
</td>
<td style="width: 147.188px;">
1.75
</td>
</tr>
<tr>
<td style="width: 147.562px;">
P/B (x)
</td>
<td style="width: 144.797px;">
1.15
</td>
<td style="width: 144.328px;">
1.02
</td>
<td style="width: 142.125px;">
0.93
</td>
<td style="width: 147.188px;">
1.65
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Occupancy (%)
</td>
<td style="width: 144.797px;">
95.7
</td>
<td style="width: 144.328px;">
94.9
</td>
<td style="width: 142.125px;">
96.7
</td>
<td style="width: 147.188px;">
94.3 (Overall)
97.8 (North American Portfolio)
93.4 (Singapore Portfolio)
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Reversion (%)
</td>
<td style="width: 144.797px;">
Not disclosed
</td>
<td style="width: 144.328px;">
-9.1 (retail)
</td>
<td style="width: 142.125px;">
6.91
</td>
<td style="width: 147.188px;">
Not Disclosed
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Gearing (%)
</td>
<td style="width: 144.797px;">
34.3
</td>
<td style="width: 144.328px;">
40.5
</td>
<td style="width: 142.125px;">
38.9
</td>
<td style="width: 147.188px;">
31.0
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Cost of Debt (%)
</td>
<td style="width: 144.797px;">
2.8
</td>
<td style="width: 144.328px;">
2.4
</td>
<td style="width: 142.125px;">
1.97
</td>
<td style="width: 147.188px;">
2.7
</td>
</tr>
<tr>
<td style="width: 147.562px;">
1 Yr Fwd Yield (%)
</td>
<td style="width: 144.797px;">
6.1
</td>
<td style="width: 144.328px;">
5.19
</td>
<td style="width: 142.125px;">
4.92
</td>
<td style="width: 147.188px;">
1.51
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Debt Hedged (%)
</td>
<td style="width: 144.797px;">
77.2
</td>
<td style="width: 144.328px;">
85
</td>
<td style="width: 142.125px;">
68
</td>
<td style="width: 147.188px;">
95.8
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Target Price
</td>
<td style="width: 144.797px;">
Under Review
</td>
<td style="width: 144.328px;">
N/A
</td>
<td style="width: 142.125px;">
N/A
</td>
<td style="width: 147.188px;">
N/A
</td>
</tr>
<tr>
<td style="width: 147.562px;">
Rating
</td>
<td style="width: 144.797px;">
Under Review
</td>
<td style="width: 144.328px;">
N/A
</td>
<td style="width: 142.125px;">
N/A
</td>
<td style="width: 147.188px;">
N/A
</td>
</tr>
</tbody>
</table>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


AAREIT


CICT


KREIT


MINT




Period


1Q22


1H21


1H21


1Q22




Gross Revenue (S$ m)


31.8 (+16.8% YoY)


645.7 (+102.8% YoY)


105.8 (+40.2% YoY)


128.1 (29.2% YoY)




NPI (S$ m)


23.1 (+23.9% YoY)


472.2 (+118% YoY)


84.4 (+43.1% YoY)


104.7 (33.1% YoY)




DPU (S$ c)


2.25 (+12.5% YoY)


5.18 (+75% YoY)


2.94 (+5.0% YoY)


3.35 (+16.7% YoY)




NAV per Unit (S$)


1.35


2.05


1.29


1.75




P/B (x)


1.15


1.02


0.93


1.65




Occupancy (%)


95.7


94.9


96.7


94.3 (Overall)
97.8 (North American Portfolio)
93.4 (Singapore Portfolio)




Reversion (%)


Not disclosed


-9.1 (retail)


6.91


Not Disclosed




Gearing (%)


34.3


40.5


38.9


31.0




Cost of Debt (%)


2.8


2.4


1.97


2.7




1 Yr Fwd Yield (%)


6.1


5.19


4.92


1.51




Debt Hedged (%)


77.2


85


68


95.8




Target Price


Under Review


N/A


N/A


N/A




Rating


Under Review


N/A


N/A


N/A





ASEAN Builder's Scoop (28Jul21) - AAREIT Stable Performance

Singapore

CapitaLand Integrated Commercial Trust is a real estate investment trust (REIT) that owns and invests in income-producing commercial properties, including retail malls, office buildings, and integrated developments. Its diversified portfolio is predominantly located in Singapore, with additional assets in Germany and Australia. Headquartered in Singapore, the company was formed in 2020.

CapitaLand Integrated Commercial Trust (CICT SP)

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CapitaLand Integrated Commercial Trust (CICT SP)

ASEAN Builder's Scoop (3Dec21) - CICT Enters Sydney Office Market

FEHT realizing its 0.73x P/B potential; FLT divests Melbourne industrials; LPKR divests 11% LMRT stake at 45% above last price; SLB consortium buys...

SCCM Asia Research

ASEAN Builder's Scoop (15Nov21) - CICT Divests 50% Stake of OGS

CICT Divests 50% Stake of OGS; CanningHill Piers launches at S$2,836psf; ALLHC set to gain from warehouse boom; MEG bullish on hospitality in 2022;...

SCCM Asia Research

ASEAN Builder's Scoop (25Oct21)

CICT hopeful for a stronger 4Q21; METRO acquires SG, AUS props; 3Q21 home prices rose 1.1% QoQ; Office rents reversed, retail rents fell further in...

SCCM Asia Research

ASEAN Builder's Scoop (10Sep21)

CICT capitalizing on post-Covid trends; HDB resale prices only 0.1% below peak; DMAS on-track to meet FY mktg sales target; CPN new Ayutthaya mall;...

SCCM Asia Research

ASEAN Builder's Scoop (28Jul21) - AAREIT Stable Performance

AAREIT stable performance; CICT office outshines retail; KREIT cautiously optimistic; MINT acq-driven growth; KORE expands with 2 new US acq; CPG...

SCCM Asia Research

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