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>8 bids drawn for Jalan Tembusu plot – winner: <a href="https://www.smartkarma.com/entities/city-developments-ltd" target="_blank" data-smartkarma-citation="entities:57" rel="noopener">City Developments (CIT SP)</a> ; 4 bids for Lentor plot – winner: Intreprid, <a href="https://www.smartkarma.com/entities/guocoland-ltd" target="_blank" data-smartkarma-citation="entities:17467" rel="noopener">GuocoLand (GUOL SP)</a> , and TID</li><li>Office rents improved further in 4Q21; Rents expected to rise 3-5% in 2022</li><li>Luxury homes still draw demands post cooling measures</li></ul>

8 bids drawn for Jalan Tembusu plot – winner: City Developments (CIT SP) ; 4 bids for Lentor plot – winner: Intreprid, GuocoLand (GUOL SP) , and TIDOffice rents improved further in 4Q21; Rents expected to rise 3-5% in 2022Luxury homes still draw demands post cooling measures

ASEAN Builder's Scoop (19Jan22) - CIT Won Tembusu Plot

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/aims-amp-capital-industrial" target="_blank" data-smartkarma-citation="entities:933" rel="noopener">AIMS APAC REIT (AAREIT SP)</a> issues S$250m 5.375% perpetual securities</h3><p>AAREIT has priced the S$250m perpetual securities at 5.375%. The Series 003 Perpetual Securities will be issued under the S$750m Multicurrency Debt Issuance programme, expected to be issued on 1Sep21. The net proceeds will be used for the general corporate purposes, finance general working capital, capital expenditure and investments and the partial or full refinancing of existing borrowings. AAREIT has an existing S$125m 5.65% perpetual securities issued in Aug20, bringing its total perps exposure to S$375m (a look-through debt+perps/asset to ~46%).</p><h3>Residential property volume, prices could continue rising for the rest of 2021</h3><p>Residential property demand and prices are expected to tick higher. OrangeTee noted that demand for public and private properties has been rising and listings for both new launches and resale flats are being snapped up on the same day. Buyers are more willing to spend on bigger but older flats due to work-from-home requirements. According to OrangeTee, more than 14,000 resale HDB flats changed hands in 1H21. Prices increased 6% over that period and are just 2% below the peak in 2Q13. Total HDB resales could hit 27,000-29,000 units this year (vs. 24,748 units in 2020 and 23,714 in 2019), while prices of resale flats may rise by 9-11% for the whole of 2021. Meanwhile, a total of 8,449 private homes, including new launches and resale units, were sold in 2Q21, up 4.3% QoQ. Overall home prices may rise by 6-9% this year, possibly driven by resale volumes.</p>

SingaporeAIMS APAC REIT (AAREIT SP) issues S$250m 5.375% perpetual securitiesAAREIT has priced the S$250m perpetual securities at 5.375%. The Series 003 Perpetual Securities will be issued under the S$750m Multicurrency Debt Issuance programme, expected to be issued on 1Sep21. The net proceeds will be used for the general corporate purposes, finance general working capital, capital expenditure and investments and the partial or full refinancing of existing borrowings. AAREIT has an existing S$125m 5.65% perpetual securities issued in Aug20, bringing its total perps exposure to S$375m (a look-through debt+perps/asset to ~46%).Residential property volume, prices could continue rising for the rest of 2021Residential property demand and prices are expected to tick higher. OrangeTee noted that demand for public and private properties has been rising and listings for both new launches and resale flats are being snapped up on the same day. Buyers are more willing to spend on bigger but older flats due to work-from-home requirements. According to OrangeTee, more than 14,000 resale HDB flats changed hands in 1H21. Prices increased 6% over that period and are just 2% below the peak in 2Q13. Total HDB resales could hit 27,000-29,000 units this year (vs. 24,748 units in 2020 and 23,714 in 2019), while prices of resale flats may rise by 9-11% for the whole of 2021. Meanwhile, a total of 8,449 private homes, including new launches and resale units, were sold in 2Q21, up 4.3% QoQ. Overall home prices may rise by 6-9% this year, possibly driven by resale volumes.

<h2>Singapore</h2><h3>Condo and HDB rents continued to rise in May21; Volumes holding up well</h3><p>The rental market for both private apartments and HDB flats in May remained robust despite the tightened Covid-19 measures and border restrictions in place. Rents for condominium units rose by 0.3% MoM and are up 7.3% YoY. They are still down 11.4% from their peak in Jan13, according to SRX. HDB rents saw a slightly higher increase of 0.7% MoM and are up 7.9% YoY. However, they are still 9.2% off their highs in Aug13. With the May increases, condo rents extended their rise to five consecutive months, while HDB rents climbed for 11 straight months. Rental volume for condo apartments increased by 1.7% MoM to an estimated 4,603 units leased in May compared with 4,527 units in Apr. The number of units rented out last month are also 39.3% higher YoY, when Singapore was in its circuit breaker period. HDB rental volume in May saw a slight drop from Apr, down 0.9% MoM to an estimated 1,686 units from 1,702 units in Apr. HDB rental volume last month is 30.4% higher Yoy, though 8.5% lower than the five-year average volume for the month of May.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/212/219/original/image017.png?1623289645" class="editor-image img-responsive" data-smartkarma-image-id="212219"></figure><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/212/220/original/image018.png?1623289657" class="editor-image img-responsive" data-smartkarma-image-id="212220"></figure></section></section>

SingaporeCondo and HDB rents continued to rise in May21; Volumes holding up wellThe rental market for both private apartments and HDB flats in May remained robust despite the tightened Covid-19 measures and border restrictions in place. Rents for condominium units rose by 0.3% MoM and are up 7.3% YoY. They are still down 11.4% from their peak in Jan13, according to SRX. HDB rents saw a slightly higher increase of 0.7% MoM and are up 7.9% YoY. However, they are still 9.2% off their highs in Aug13. With the May increases, condo rents extended their rise to five consecutive months, while HDB rents climbed for 11 straight months. Rental volume for condo apartments increased by 1.7% MoM to an estimated 4,603 units leased in May compared with 4,527 units in Apr. The number of units rented out last month are also 39.3% higher YoY, when Singapore was in its circuit breaker period. HDB rental volume in May saw a slight drop from Apr, down 0.9% MoM to an estimated 1,686 units from 1,702 units in Apr. HDB rental volume last month is 30.4% higher Yoy, though 8.5% lower than the five-year average volume for the month of May.

ASEAN Builder's Scoop (10Jun21) - Condo/HDB Rents Continue to Rise in May21

<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> 1Q21 Business Updates – SG / AUS residential the bright spot; Gradual reopening of hotels should lift sentiment</h3>
<ul>
<li>Property Development: In Singapore, CIT sold 319 units with total sales value of S$513.6m in 1Q21, +72% YoY in units sold and +84.7% YoY in total sales value. Amber Park performed strongly with sales of around 100 units</li>
<li>In Feb, The Tapestry obtained its TOP (all 861 units are fully sold). Meanwhile, construction activities have resumed at all ongoing development projects. However, due to labour shortage which has affected the entire industry, activities have not returned to pre-COVID levels. CIT does not have any projects due for completion in 2021. To date, 324 units (60%) of Irwell Hill Residences have been sold. Acquisition of site at Northumberland Road will also be developed into a mixed-use project with 408 residential apartments of up to 23 storeys and commercial retail space on the ground floor</li>
<li>Meanwhile in Australia, fuelled by domestic demand, sales increased across CIT’s launched project. The Marker in Melbourne has pre-sold 80% of its 198 units and construction is on track to complete in 2022, while Brickworks Park in Brisbane has achieved pre-sales for 44% of the 132 released units. Waterbrook Bowral, a luxury retirement project in New South Wales that the Group has collaborated with Waterbrook Lifestyle Resorts on, has pre-sold 92% of the 77 townhouses launched and construction is in progress</li>
<li>Investment Properties: 1Q21 committed occupancy for SG office remains resilient at 91.4%, above island-wide occupancy of 88.1%, with positive rental reversion. SG retail portfolio continues to face headwinds. Footfall in the malls for the quarter has been relatively stable, though it is still lower than pre COVID-19 levels. Despite lower footfall, gross turnover sales (GTO) of CIT malls remain strong with 1Q21 GTO registering an increase of over 5% YoY compared to 1Q20 levels. As of 31Mar21, committed occupancy for retail space remains strong at 92.1%, above island-wide occupancy of 91.5%. In Thailand, since Mar21, part of Jungceylon, the Group’s major retail mall in Phuket has been temporarily closed to reduce operational cost. In China, while tenants remain cautious and slow to commit, office leasing demand is gradually returning. In Suzhou, Hong Leong City Center’s Grade-A office tower is now 85% occupied. In Japan, residential rental apartment portfolio within Osaka and Yokohama continues to show stable occupancy and healthy leasing demand</li>
<li>Hotel Operations: 1Q21 global occupancy dropped to 36.8% (1Q20: 52.5%) and global RevPAR decreased by 51.7% YoY to S$44.6 (1Q2020: S$92.4). Singapore continues to face challenges in 2021 until border restrictions are lifted. The UK was severely impacted, particularly in London. The US saw the country gradually reopening with the vaccine roll-out. New York and regional hotels achieved stronger occupancies in 1Q21 particularly with the weekend business. CIT’s M Social New York property in Times Square is expected to open in 2Q21. A community outbreak in Feb21 in Auckland led to lockdowns in New Zealand, which disrupted business and leisure travel in NZ over most of Feb and the early part of Mar</li>
<li>In Feb21, CIT acquired a 55% effective interest in Shenzhen Longgang Tusincere Tech Park in China’s high-growth Silicon Valley from its China JV, Sincere Property Group, and two entities of China Ping An for RMB850m (~S$174m). CIT now holds an 84.6% equity interest in the holding company, Shenzhen Tusincere Technology Park Development, which holds a 65% interest in the project. The remaining 35% interest in the project is held by the Shenzhen Longgang District state-owned enterprise</li>
<li>Net gearing ratio (factoring in revaluation surplus from investment properties) stands at 65% with interest cover at 1.7 times. Cash reserves stands at S$3.4bn with cash and available undrawn committed bank facilities amounts to a total S$5.5bn</li>
<li>CIT currently trades at 19.8x FY21E P/E and 0.8x P/B.  </li>
</ul>

Singapore

City Developments (CIT SP) 1Q21 Business Updates – SG / AUS residential the bright spot; Gradual reopening of hotels should lift sentiment

Property Development: In Singapore, CIT sold 319 units with total sales value of S$513.6m in 1Q21, +72% YoY in units sold and +84.7% YoY in total sales value. Amber Park performed strongly with sales of around 100 units
In Feb, The Tapestry obtained its TOP (all 861 units are fully sold). Meanwhile, construction activities have resumed at all ongoing development projects. However, due to labour shortage which has affected the entire industry, activities have not returned to pre-COVID levels. CIT does not have any projects due for completion in 2021. To date, 324 units (60%) of Irwell Hill Residences have been sold. Acquisition of site at Northumberland Road will also be developed into a mixed-use project with 408 residential apartments of up to 23 storeys and commercial retail space on the ground floor
Meanwhile in Australia, fuelled by domestic demand, sales increased across CIT’s launched project. The Marker in Melbourne has pre-sold 80% of its 198 units and construction is on track to complete in 2022, while Brickworks Park in Brisbane has achieved pre-sales for 44% of the 132 released units. Waterbrook Bowral, a luxury retirement project in New South Wales that the Group has collaborated with Waterbrook Lifestyle Resorts on, has pre-sold 92% of the 77 townhouses launched and construction is in progress
Investment Properties: 1Q21 committed occupancy for SG office remains resilient at 91.4%, above island-wide occupancy of 88.1%, with positive rental reversion. SG retail portfolio continues to face headwinds. Footfall in the malls for the quarter has been relatively stable, though it is still lower than pre COVID-19 levels. Despite lower footfall, gross turnover sales (GTO) of CIT malls remain strong with 1Q21 GTO registering an increase of over 5% YoY compared to 1Q20 levels. As of 31Mar21, committed occupancy for retail space remains strong at 92.1%, above island-wide occupancy of 91.5%. In Thailand, since Mar21, part of Jungceylon, the Group’s major retail mall in Phuket has been temporarily closed to reduce operational cost. In China, while tenants remain cautious and slow to commit, office leasing demand is gradually returning. In Suzhou, Hong Leong City Center’s Grade-A office tower is now 85% occupied. In Japan, residential rental apartment portfolio within Osaka and Yokohama continues to show stable occupancy and healthy leasing demand
Hotel Operations: 1Q21 global occupancy dropped to 36.8% (1Q20: 52.5%) and global RevPAR decreased by 51.7% YoY to S$44.6 (1Q2020: S$92.4). Singapore continues to face challenges in 2021 until border restrictions are lifted. The UK was severely impacted, particularly in London. The US saw the country gradually reopening with the vaccine roll-out. New York and regional hotels achieved stronger occupancies in 1Q21 particularly with the weekend business. CIT’s M Social New York property in Times Square is expected to open in 2Q21. A community outbreak in Feb21 in Auckland led to lockdowns in New Zealand, which disrupted business and leisure travel in NZ over most of Feb and the early part of Mar
In Feb21, CIT acquired a 55% effective interest in Shenzhen Longgang Tusincere Tech Park in China’s high-growth Silicon Valley from its China JV, Sincere Property Group, and two entities of China Ping An for RMB850m (~S$174m). CIT now holds an 84.6% equity interest in the holding company, Shenzhen Tusincere Technology Park Development, which holds a 65% interest in the project. The remaining 35% interest in the project is held by the Shenzhen Longgang District state-owned enterprise
Net gearing ratio (factoring in revaluation surplus from investment properties) stands at 65% with interest cover at 1.7 times. Cash reserves stands at S$3.4bn with cash and available undrawn committed bank facilities amounts to a total S$5.5bn
CIT currently trades at 19.8x FY21E P/E and 0.8x P/B.  


ASEAN Builder's Scoop (20May21) - CIT resi the bright spot

Singapore and emerging market real estate

Royston Foo

<p>Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of May 2019.</p><p>Property developers in Singapore launched a total of 1,374 non-land private residential units for sale in the month of May and this was an increase of 214% MoM and 30% YoY.</p><p>A total of 934 non-landed private residential units were sold in May. This was an increase of 29% MoM, but a decline of 15% YoY. </p><p>Buyers continue to gravitate towards the earlier launched mass-market property projects that are priced at more reasonable levels in comparison to the newer projects. Interest in mid-range to high-end projects remained subdued.</p><p>Total developers’ inventory available for immediate launch decreased by 3.6% MoM in May to 16,782 units, aided by the improvement in sales and fewer projects getting sales approval in May. </p><p>Developers’ inventory in the CCR continued to increase in May, rising by 2.5% MoM to 3,061 units in May. This is the highest level since December 2016.</p>

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of May 2019.Property developers in Singapore launched a total of 1,374 non-land private residential units for sale in the month of May and this was an increase of 214% MoM and 30% YoY.A total of 934 non-landed private residential units were sold in May. This was an increase of 29% MoM, but a decline of 15% YoY. Buyers continue to gravitate towards the earlier launched mass-market property projects that are priced at more reasonable levels in comparison to the newer projects. Interest in mid-range to high-end projects remained subdued.Total developers’ inventory available for immediate launch decreased by 3.6% MoM in May to 16,782 units, aided by the improvement in sales and fewer projects getting sales approval in May. Developers’ inventory in the CCR continued to increase in May, rising by 2.5% MoM to 3,061 units in May. This is the highest level since December 2016.

Singapore Property – 29% Increase in Property Sales in May but No Recovery in Sight Yet.

Singapore

Chip Eng Seng Corporation Ltd. is a multinational conglomerate engaged in construction, civil infrastructure, property development, property investment, hospitality, and education. The company provides general building, civil engineering, property development and management, investment property leasing, hotel operations, and education services. It was founded in 1960 and is headquartered in Singapore.

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Chip Eng Seng (CHIP SP)

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Singapore Property – 29% Increase in Property Sales in May but No Recovery in Sight Yet.

Singapore’s Urban Redevelopment Authority (URA) today released the data on property developers’ private home sales for the month of May...

Royston Foo

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