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: 167.45pt;"><p> </p></td><td style="width: 129.85pt;"><p>CERT (€)</p></td><td style="width: 117.6pt;"><p>MUST (US$)</p></td><td style="width: 117.6pt;"><p>KORE (US$)</p></td></tr><tr><td style="width: 167.45pt;"><p>Period</p></td><td style="width: 129.85pt;"><p>1Q21</p></td><td style="width: 117.6pt;"><p>1Q21</p></td><td style="width: 117.6pt;"><p>1Q21</p></td></tr><tr><td style="width: 167.45pt;"><p>Gross Revenue (S$ m)</p></td><td style="width: 129.85pt;"><p>48.5 (-0.1% YoY)</p></td><td style="width: 117.6pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>34.6 (-2.1% YoY)</p></td></tr><tr><td style="width: 167.45pt;"><p>NPI (S$ m)</p></td><td style="width: 129.85pt;"><p>30.8 (-0.4% YoY)</p></td><td style="width: 117.6pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>20.4 (-2.8% YoY)</p></td></tr><tr><td style="width: 167.45pt;"><p>DPU (S$ c)</p></td><td style="width: 129.85pt;"><p>0.827 (-9.1% YoY)</p></td><td style="width: 117.6pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 167.45pt;"><p>NAV per Unit (S$)</p></td><td style="width: 129.85pt;"><p>2.445</p></td><td style="width: 117.6pt;"><p>0.730</p></td><td style="width: 117.6pt;"><p>Not Disclosed</p></td></tr><tr><td style="width: 167.45pt;"><p>P/B (x)</p></td><td style="width: 129.85pt;"><p>0.978</p></td><td style="width: 117.6pt;"><p>1.030 (Based on 4Q20 NAV)</p></td><td style="width: 117.6pt;"><p>0.90 (Based on 4Q20 NAV)</p></td></tr><tr><td style="width: 167.45pt;"><p>Occupancy (%)</p></td><td style="width: 129.85pt;"><p>94.6</p></td><td style="width: 117.6pt;"><p>92.0</p></td><td style="width: 117.6pt;"><p>91.6</p></td></tr><tr><td style="width: 167.45pt;"><p>Reversion (%)</p></td><td style="width: 129.85pt;"><p>-1.3</p></td><td style="width: 117.6pt;"><p>2.1</p></td><td style="width: 117.6pt;"><p>5.7</p></td></tr><tr><td style="width: 167.45pt;"><p>Gearing (%)</p></td><td style="width: 129.85pt;"><p>38.5</p></td><td style="width: 117.6pt;"><p>41.3</p></td><td style="width: 117.6pt;"><p>37.5</p></td></tr><tr><td style="width: 167.45pt;"><p>Cost of Debt (%)</p></td><td style="width: 129.85pt;"><p>1.72</p></td><td style="width: 117.6pt;"><p>3.18</p></td><td style="width: 117.6pt;"><p>2.82</p></td></tr><tr><td style="width: 167.45pt;"><p>1 Yr Fwd Yield (%)</p></td><td style="width: 129.85pt;"><p>7.95</p></td><td style="width: 117.6pt;"><p>8.00</p></td><td style="width: 117.6pt;"><p>8.3</p></td></tr><tr><td style="width: 167.45pt;"><p>Debt Hedged (%)</p></td><td style="width: 129.85pt;"><p>100</p></td><td style="width: 117.6pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>84.7</p></td></tr><tr><td style="width: 167.45pt;"><p>Target Price</p></td><td style="width: 129.85pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>NA</p></td></tr><tr><td style="width: 167.45pt;"><p>Rating</p></td><td style="width: 129.85pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>NA</p></td><td style="width: 117.6pt;"><p>NA</p></td></tr></tbody></table><h3><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889" rel="noopener">Cromwell European REIT (CERT SP)</a> 1Q21 Business Update – Weakening operational metrics with negative reversions and falling occupancies</h3><ul><li>1Q21 revenue and NPI decreased by 0.1% and 0.4% YoY, respectively, to €48.5m (28.4% BB est) and €30.8m. Prolonged COVID-19 lockdowns impacted 1Q21 gross revenue and NPI, notably reducing carpark income in the mixed-use Central Plaza in Rotterdam, the Netherlands and resulting in some vacancy in certain light industrial/logistics assets in France and Denmark. The disposal of 12 higher-yielding and higher-risk assets in the Netherlands, France and Denmark also affected gross revenue, though this was partially offset by new income from recently completed acquisitions in Italy, Germany, the Czech Republic and Slovakia</li><li>1Q21 DPU decreased 9.1% YoY to €0.827c (21.8% BB est). This due to the same factors impacting DI as well as the timing of the investment of the €100m private placement proceeds to offset the additional weighted average units on issue in Mar21. 1Q21 DI was €21.7m, 6.5% lower YoY, due to the same factors affecting gross revenue and NPI. It was further impacted by €0.8m of higher interest expenses from the €500m longer-tenured bond issuances and certain one-off trust expenses of €0.4m</li><li>Overall portfolio occupancy decreased slightly to 94.6% in 1Q21 (vs. 95.1% in 4Q20 and 94.3% in 3Q20), mainly due to vacancies in office assets in France and Finland and the departure of an anchor tenant-customer (Nilfisk), which relocated its operations to Belgium from the Priorparken 700 / 800 asset in Copenhagen, Denmark. CERT recorded 37 new leases and 21 renewals for 19,735sqm and 13,428sqm of space, respectively. Portfolio WALE stood at 4.8 years. Rental reversions came in at -1.3% in 1Q21 (vs +2.1% in 4Q20 and +2.8% in 3Q20)</li><li>Office – Occupancy of 94.5% (vs 95.1% in 4Q20 and 94.9% in 3Q20). CERT recorded 9 new leases and 7 renewals for 1,180sqm and 2,189sqm of space, respectively. 34% tenant retention rate, 21% of expiries and breaks up to 30Sep21 have been de-risked. Office WALE stood at 4.4 years. Rental reversions came in at -1.0% in 1Q21 (vs +1.7% in 4Q20 and -1.4% in 3Q20)   </li><li>Industrial/logistics – Occupancy of 93.8% (vs 94.1% in 4Q20 and 92.3% in 3Q20). CERT recorded 28 new leases and 13 renewals for 18,556sqm and 10,381sqm of space, respectively. 26% tenant retention rate, 79% of expiries and breaks up to 30Sep21 have been de-risked. Industrial WALE stood at 4.8 years. Rental reversions came in at +1.5% in 1Q21 (vs +3.8% in 4Q20 and +14.4% in 3Q20)   </li><li>Portfolio gearing stands at 38.5% (vs. 38.1% in 4Q20 and 35.9% in 3Q20) with average cost of debt of 1.72% pa. (vs. 1.66% in 4Q20 and 1.5% in 3Q20) with 100% of debt hedged. CERT maintained a strong cash position of €75.8m</li><li>CERT currently trades at 7.95% FY21E yield and 0.978x P/B.</li></ul><h3><a href="https://www.smartkarma.com/entities/manulife-us-reit" target="_blank" data-smartkarma-citation="entities:567" rel="noopener">Manulife US REIT (MUST SP)</a> 1Q21 Business Updates – US office market remains muted, mitigated by limited supply and expiry in MUST’s markets</h3><ul><li>Revenue, NPI and DI were not disclosed in 1Q21</li><li>Overall portfolio occupancy dipped further to 92.0% in 1Q21 (vs. 93.4% in 4Q20 and 94.3% in 3Q20), but is still above the US Class-A average of ~82%</li><li>MUST signed 270,000sqft (~5.8% of NLA) of leases in 1Q21 with +2.1% rental reversions (vs. +0.1% in full-year FY20 and +7.9% in 9M20). These leases are mainly from renewals (93.6%), followed by expansion (5.3%) and new leases (1.1%), supported by finance and insurance, administrative, advertising and legal sectors. It has a long WALE of 5.3 years with ~4.4% (by GRI) or 4.3% (by NLA) of leases up for renewal for the remaining of FY21E. Nonetheless, its current portfolio has a 2.1% in-place rental escalations. Given limited supply in MUST’s markets over the next 12 months, these markets is expected to see a 2.5% rent growth, in line with the overall US average</li><li>Tenants’ collection rate remains healthy (98% collection), but challenges for 2021 include: 1) Low physical occupancy at 5-25% (low carpark income), and 2) existing vacancies remain a challenge to fill (larger space takes longer to fill and it’s still a tenant’s market with higher incentive and rent free)</li><li>Portfolio gearing stands at 41.3% (vs. 41.0% in 4Q20 and 39.9% in 3Q20) with average cost of debt of 3.18% pa. (vs. 3.18% in 4Q20 and 3.21% in 3Q20). In Apr21, MUST has refinanced its loans due FY21E at lower interest rate, bringing weighted average interest rate to 3.0% and increasing weighted average debt maturity to 3.4 years</li><li>MUST currently trades at 8.00% FY21E yield and 1.03x P/B. </li></ul><figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=03e35791bb&amp;attid=0.0.3&amp;permmsgid=msg-f:1699422834728702566&amp;th=1795901073311266&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8sEKl6WDAe8N9__qHKBNe6-08vbrc8QfHwJamRBTAaR_dON_UK1yOULc7lIYoAqOLnG1bIt-bZRfkFUmsv6mNgGuwGup4IAMyZuiuu1S3HH7pcwGFiu6yseig&amp;disp=emb" width="403" height="199" class="editor-image img-responsive" data-image-whitelisted=""></figure><figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=03e35791bb&amp;attid=0.0.4&amp;permmsgid=msg-f:1699422834728702566&amp;th=1795901073311266&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ_0APJf80bwv3E2S_EiRYN8qcm-reP1OQ2z06j7ZbYooytHl5IJJso0tnZEZ2wCt-YWmA-nXxQk1VnMuNtz5DfMAf0FyvFj2bW9VWWOmPzOeJvwjpGsNdafsus&amp;disp=emb" width="364" height="196" class="editor-image img-responsive" data-image-whitelisted=""></figure><h3><a href="https://www.smartkarma.com/entities/propnex-ltd" target="_blank" data-smartkarma-citation="entities:27209" rel="noopener">Propnex Ltd (PROP SP)</a> 1Q21 PATMI almost doubled to S$16.2m; Debt free balance sheet  </h3><p>PROP reported a 96.7% YoY growth in net profit after tax for 1Q21 to S$16.2m(vs S$8.2m in 1Q20), on the back of a 63.3% YoY growth in revenue to S$220.6m (vs S$135.1m in 1Q20). The performance was driven by higher number of transactions completed in 1Q21 following the recovery of private residential market from the property cooling measures in Jul18. Revenue growth was mainly driven due to the increase in commission income from agency services of ~S$47.5m and increase in project marketing services of ~S$38.0m. The results translate to an EPS growth of 95.6% YoY to S$4.01c in 1Q21. PROP remained debt free, and its balance sheet remained robust with cash and cash equivalents of S$118.9m as at 31Mar21, compared to S$105.8m as at 31Dec20. PROP has also taken 70% interest in Ovvy, The People Marketplace, a technology platform that connects service providers to consumers.</p><h3><a href="https://www.smartkarma.com/entities/lh-group-ltd" target="_blank" data-smartkarma-citation="entities:4397" rel="noopener">Pacific Star Development (PSTAR SP)</a> 3Q21 net loss increases, identified uncertainty over operating as going concern</h3><p>PSTAR, whose management is voicing uncertainty over its ability to operate as a going concern, sank further into the red in 3Q21. Net loss widened to S$8.2m as revenue came in 81% YoY lower at S$674,000 due to lower number of Puteri Cove Residences units sold. Gross profit plunged 90% YoY to S$56,000. The group booked an increase of S$1.28m in other expenses largely due to an increase in trade receivables written off as a result of cancellation of sales and purchase agreements for Puteri Cove Residences units. Loss per share was S$1.64c, higher than S$1.6c the year before. As at 31Mar, the group's net liability position was S$69.3m. PSTAR said there is uncertainty as to whether the group is able to meet its contractual obligations in the next 12 months as and when they fall due, and hence there is uncertainty over its ability to operate as a going concern for the next 12 months.</p>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) CERT (€)MUST (US$)KORE (US$)Period1Q211Q211Q21Gross Revenue (S$ m)48.5 (-0.1% YoY)NA34.6 (-2.1% YoY)NPI (S$ m)30.8 (-0.4% YoY)NA20.4 (-2.8% YoY)DPU (S$ c)0.827 (-9.1% YoY)NANot DisclosedNAV per Unit (S$)2.4450.730Not DisclosedP/B (x)0.9781.030 (Based on 4Q20 NAV)0.90 (Based on 4Q20 NAV)Occupancy (%)94.692.091.6Reversion (%)-1.32.15.7Gearing (%)38.541.337.5Cost of Debt (%)1.723.182.821 Yr Fwd Yield (%)7.958.008.3Debt Hedged (%)100NA84.7Target PriceNANANARatingNANANACromwell European REIT (CERT SP) 1Q21 Business Update – Weakening operational metrics with negative reversions and falling occupancies1Q21 revenue and NPI decreased by 0.1% and 0.4% YoY, respectively, to €48.5m (28.4% BB est) and €30.8m. Prolonged COVID-19 lockdowns impacted 1Q21 gross revenue and NPI, notably reducing carpark income in the mixed-use Central Plaza in Rotterdam, the Netherlands and resulting in some vacancy in certain light industrial/logistics assets in France and Denmark. The disposal of 12 higher-yielding and higher-risk assets in the Netherlands, France and Denmark also affected gross revenue, though this was partially offset by new income from recently completed acquisitions in Italy, Germany, the Czech Republic and Slovakia1Q21 DPU decreased 9.1% YoY to €0.827c (21.8% BB est). This due to the same factors impacting DI as well as the timing of the investment of the €100m private placement proceeds to offset the additional weighted average units on issue in Mar21. 1Q21 DI was €21.7m, 6.5% lower YoY, due to the same factors affecting gross revenue and NPI. It was further impacted by €0.8m of higher interest expenses from the €500m longer-tenured bond issuances and certain one-off trust expenses of €0.4mOverall portfolio occupancy decreased slightly to 94.6% in 1Q21 (vs. 95.1% in 4Q20 and 94.3% in 3Q20), mainly due to vacancies in office assets in France and Finland and the departure of an anchor tenant-customer (Nilfisk), which relocated its operations to Belgium from the Priorparken 700 / 800 asset in Copenhagen, Denmark. CERT recorded 37 new leases and 21 renewals for 19,735sqm and 13,428sqm of space, respectively. Portfolio WALE stood at 4.8 years. Rental reversions came in at -1.3% in 1Q21 (vs +2.1% in 4Q20 and +2.8% in 3Q20)Office – Occupancy of 94.5% (vs 95.1% in 4Q20 and 94.9% in 3Q20). CERT recorded 9 new leases and 7 renewals for 1,180sqm and 2,189sqm of space, respectively. 34% tenant retention rate, 21% of expiries and breaks up to 30Sep21 have been de-risked. Office WALE stood at 4.4 years. Rental reversions came in at -1.0% in 1Q21 (vs +1.7% in 4Q20 and -1.4% in 3Q20)   Industrial/logistics – Occupancy of 93.8% (vs 94.1% in 4Q20 and 92.3% in 3Q20). CERT recorded 28 new leases and 13 renewals for 18,556sqm and 10,381sqm of space, respectively. 26% tenant retention rate, 79% of expiries and breaks up to 30Sep21 have been de-risked. Industrial WALE stood at 4.8 years. Rental reversions came in at +1.5% in 1Q21 (vs +3.8% in 4Q20 and +14.4% in 3Q20)   Portfolio gearing stands at 38.5% (vs. 38.1% in 4Q20 and 35.9% in 3Q20) with average cost of debt of 1.72% pa. (vs. 1.66% in 4Q20 and 1.5% in 3Q20) with 100% of debt hedged. CERT maintained a strong cash position of €75.8mCERT currently trades at 7.95% FY21E yield and 0.978x P/B.Manulife US REIT (MUST SP) 1Q21 Business Updates – US office market remains muted, mitigated by limited supply and expiry in MUST’s marketsRevenue, NPI and DI were not disclosed in 1Q21Overall portfolio occupancy dipped further to 92.0% in 1Q21 (vs. 93.4% in 4Q20 and 94.3% in 3Q20), but is still above the US Class-A average of ~82%MUST signed 270,000sqft (~5.8% of NLA) of leases in 1Q21 with +2.1% rental reversions (vs. +0.1% in full-year FY20 and +7.9% in 9M20). These leases are mainly from renewals (93.6%), followed by expansion (5.3%) and new leases (1.1%), supported by finance and insurance, administrative, advertising and legal sectors. It has a long WALE of 5.3 years with ~4.4% (by GRI) or 4.3% (by NLA) of leases up for renewal for the remaining of FY21E. Nonetheless, its current portfolio has a 2.1% in-place rental escalations. Given limited supply in MUST’s markets over the next 12 months, these markets is expected to see a 2.5% rent growth, in line with the overall US averageTenants’ collection rate remains healthy (98% collection), but challenges for 2021 include: 1) Low physical occupancy at 5-25% (low carpark income), and 2) existing vacancies remain a challenge to fill (larger space takes longer to fill and it’s still a tenant’s market with higher incentive and rent free)Portfolio gearing stands at 41.3% (vs. 41.0% in 4Q20 and 39.9% in 3Q20) with average cost of debt of 3.18% pa. (vs. 3.18% in 4Q20 and 3.21% in 3Q20). In Apr21, MUST has refinanced its loans due FY21E at lower interest rate, bringing weighted average interest rate to 3.0% and increasing weighted average debt maturity to 3.4 yearsMUST currently trades at 8.00% FY21E yield and 1.03x P/B. Propnex Ltd (PROP SP) 1Q21 PATMI almost doubled to S$16.2m; Debt free balance sheet  PROP reported a 96.7% YoY growth in net profit after tax for 1Q21 to S$16.2m(vs S$8.2m in 1Q20), on the back of a 63.3% YoY growth in revenue to S$220.6m (vs S$135.1m in 1Q20). The performance was driven by higher number of transactions completed in 1Q21 following the recovery of private residential market from the property cooling measures in Jul18. Revenue growth was mainly driven due to the increase in commission income from agency services of ~S$47.5m and increase in project marketing services of ~S$38.0m. The results translate to an EPS growth of 95.6% YoY to S$4.01c in 1Q21. PROP remained debt free, and its balance sheet remained robust with cash and cash equivalents of S$118.9m as at 31Mar21, compared to S$105.8m as at 31Dec20. PROP has also taken 70% interest in Ovvy, The People Marketplace, a technology platform that connects service providers to consumers.Pacific Star Development (PSTAR SP) 3Q21 net loss increases, identified uncertainty over operating as going concernPSTAR, whose management is voicing uncertainty over its ability to operate as a going concern, sank further into the red in 3Q21. Net loss widened to S$8.2m as revenue came in 81% YoY lower at S$674,000 due to lower number of Puteri Cove Residences units sold. Gross profit plunged 90% YoY to S$56,000. The group booked an increase of S$1.28m in other expenses largely due to an increase in trade receivables written off as a result of cancellation of sales and purchase agreements for Puteri Cove Residences units. Loss per share was S$1.64c, higher than S$1.6c the year before. As at 31Mar, the group's net liability position was S$69.3m. PSTAR said there is uncertainty as to whether the group is able to meet its contractual obligations in the next 12 months as and when they fall due, and hence there is uncertainty over its ability to operate as a going concern for the next 12 months.

ASEAN Builder's Scoop (11May21) - CERT weakening operational metrics

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Cromwell European REIT / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889:1" rel="noopener">Cromwell European REIT (CERT SP)</a> announced a Euro90m private placement earlier this week to plenish working capital following a recently completed acquisition in Italy and to partially fund the acquisition of properties based in the Czech Republic and Slovakia.</p><p>After the completion of this placement, the company should be eligible for inclusion in FTSE EPRA NAREIT Developed Asia Index, which will make the company more accessible for a broader investor base.</p><section class="figure"><section class="figure">The company released a resilient set of results earlier this week with a net property income (NPI) slightly above FY2019, mainly due to the positive impact from acquisitions.</section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure">Despite the pandemic, it announced a DPU only -3% lower than FY2019 with strong positive operating cash flow.</section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section></section><section class="figure"></section><section class="figure">The company demonstrated its resilience during FY2020 with an overall occupancy rate across all its properties of 95.1%  and +2.1% positive rental reversions across all sectors. </section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889:1" rel="noopener">Cromwell European REIT (CERT SP)</a> has transformed its capital management over 2020 with the establishment of a Euro1.5bn euro medium-term note program during the year. It was also given a BBB- Investment Grade rating by Fitch Ratings and succeeded in launching an inaugural  Euro300m 5-year bond issue, followed by a Euro200m tap issue in Janaury 2021. </section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure">2020 was a year of two halves for <a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889:1" rel="noopener">Cromwell European REIT (CERT SP)</a> with 1H2020 all about cash preservation and prudent provisioning, 2H2020 saw a gradual return to normal operations, with a significant resumption of transactions, an improved customer retention rate.</section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889:1" rel="noopener">Cromwell European REIT (CERT SP)</a> looks attractive from a yield perspective but there is also scope for further upside to the value of its portfolio. Inflows from an index inclusion should provide strong support for the share price and potentially a higher premium on valuation. </section><section class="figure"></section><section class="figure"></section><section class="figure"></section><section class="figure"><p></p></section>

Cromwell European REIT (CERT SP) announced a Euro90m private placement earlier this week to plenish working capital following a recently completed acquisition in Italy and to partially fund the acquisition of properties based in the Czech Republic and Slovakia.After the completion of this placement, the company should be eligible for inclusion in FTSE EPRA NAREIT Developed Asia Index, which will make the company more accessible for a broader investor base.The company released a resilient set of results earlier this week with a net property income (NPI) slightly above FY2019, mainly due to the positive impact from acquisitions.Despite the pandemic, it announced a DPU only -3% lower than FY2019 with strong positive operating cash flow.The company demonstrated its resilience during FY2020 with an overall occupancy rate across all its properties of 95.1%  and +2.1% positive rental reversions across all sectors. Cromwell European REIT (CERT SP) has transformed its capital management over 2020 with the establishment of a Euro1.5bn euro medium-term note program during the year. It was also given a BBB- Investment Grade rating by Fitch Ratings and succeeded in launching an inaugural  Euro300m 5-year bond issue, followed by a Euro200m tap issue in Janaury 2021. 2020 was a year of two halves for Cromwell European REIT (CERT SP) with 1H2020 all about cash preservation and prudent provisioning, 2H2020 saw a gradual return to normal operations, with a significant resumption of transactions, an improved customer retention rate.Cromwell European REIT (CERT SP) looks attractive from a yield perspective but there is also scope for further upside to the value of its portfolio. Inflows from an index inclusion should provide strong support for the share price and potentially a higher premium on valuation. 

Cromwell European REIT (CERT SP) - Opportunity Knocks?

APAC IPOs & Placements

Zhen Zhou, Toh

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

Cromwell European REIT / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889:1" rel="noopener">Cromwell European REIT (CERT SP)</a> is looking to raise about EUR94m via a private placement to acquire properties.</p><p>In this insight, we will look at the transaction and the impact on financials and share our thoughts on the deal and score the deal in our ECM framework. </p><p>We have previously covered the 2019 placement and IPO in:</p><ul>
<li>
<a href="https://www.smartkarma.com/insights/cromwell-reit-placement-dpu-accretive-at-the-cost-of-increasing-em-exposure" target="_blank" data-smartkarma-citation="insights:30571" rel="noopener">Cromwell REIT Placement: DPU Accretive at the Cost of Increasing EM Exposure</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cromwell-ereit-ipo-third-time-downsized-what-s-new" target="_blank" data-smartkarma-citation="insights:15425" rel="noopener">Cromwell EREIT IPO: Third Time Downsized, What's New?</a> </li>
<li><a href="https://www.smartkarma.com/insights/cromwell-ereit-ipo-downsized-to-save-the-day-but-valuation-remains-unappealing" target="_blank" data-smartkarma-citation="insights:13632" rel="noopener">Cromwell EREIT IPO: Downsized to Save the Day but Valuation Remains Unappealing</a></li>
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Cromwell European REIT (CERT SP) is looking to raise about EUR94m via a private placement to acquire properties.In this insight, we will look at the transaction and the impact on financials and share our thoughts on the deal and score the deal in our ECM framework. We have previously covered the 2019 placement and IPO in:

Cromwell REIT Placement: DPU Accretive at the Cost of Increasing EM Exposure 

Cromwell EREIT IPO: Third Time Downsized, What's New? 
Cromwell EREIT IPO: Downsized to Save the Day but Valuation Remains Unappealing


Cromwell REIT Placement - Acquisition Was Announced Well Ahead and Placement Likely Expected

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.

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<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.&nbsp;</strong>SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
<h2>Get exposure to the insatiable demand for European logistics properties with this REIT</h2>
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<p>Cromwell European REIT (SGX:CNNU) has been increasing its exposure to light industrial / logistics properties over the past year. With the robust demand for logistics properties driven by e-commerce, we believe it is well-positioned to deliver resilient growth moving forward.</p>
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<p>Analyst: Yeo Hui Shi | Published on 02 Feb 2021</p>
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<li>Cromwell European REIT (CEREIT) (SGX:CNNU) recorded a 14.3% quarter-on-quarter increase in net property income in 3Q20, due to the absence of COVID-related doubtful debt provisions.</li>
<li>COVID-19 has driven the acceptance of e-commerce as a shopping channel in Europe. We expect positive growth in logistics rental rates to be driven by demand from retailers and third- party logistics providers.</li>
<li>As part of its portfolio rebalancing strategy, CEREIT has been increasing its exposure to the light industrial/logistics sector. It recently announced the acquisition of 11 freehold properties located in Czech Republic and Slovakia, which have potential for organic growth while their e- commerce markets mature.</li>
<li>We expect CEREIT to continue to future-proof its portfolio, with potential acquisitions of logistics properties or data centres as well as the disposal of office properties moving forward.</li>
<li>We upgrade our DDM-based target price to EUR 0.53. Coupled with estimated yields of 8.1% and 8.4% in 2021 and 2022 respectively, the potential total return by end-2022 is 22.6% based on its last traded price of EUR 0.50 on 2 February 2021.</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.
Get exposure to the insatiable demand for European logistics properties with this REIT



Cromwell European REIT (SGX:CNNU) has been increasing its exposure to light industrial / logistics properties over the past year. With the robust demand for logistics properties driven by e-commerce, we believe it is well-positioned to deliver resilient growth moving forward.

Analyst: Yeo Hui Shi | Published on 02 Feb 2021






Cromwell European REIT (CEREIT) (SGX:CNNU) recorded a 14.3% quarter-on-quarter increase in net property income in 3Q20, due to the absence of COVID-related doubtful debt provisions.
COVID-19 has driven the acceptance of e-commerce as a shopping channel in Europe. We expect positive growth in logistics rental rates to be driven by demand from retailers and third- party logistics providers.
As part of its portfolio rebalancing strategy, CEREIT has been increasing its exposure to the light industrial/logistics sector. It recently announced the acquisition of 11 freehold properties located in Czech Republic and Slovakia, which have potential for organic growth while their e- commerce markets mature.
We expect CEREIT to continue to future-proof its portfolio, with potential acquisitions of logistics properties or data centres as well as the disposal of office properties moving forward.
We upgrade our DDM-based target price to EUR 0.53. Coupled with estimated yields of 8.1% and 8.4% in 2021 and 2022 respectively, the potential total return by end-2022 is 22.6% based on its last traded price of EUR 0.50 on 2 February 2021.











(Non-SGX Report) Get Exposure to the Insatiable Demand for European Logistics Properties with This REIT

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

<p>In our first Smartkarma Corporate Webinar for this year, we welcome <a href="https://www.smartkarma.com/profiles/simon-garing" target="_blank" rel="noopener">Simon Garing</a>, CEO and Executive Director at <a href="https://www.smartkarma.com/entities/cromwell-european-real-estate" target="_blank" data-smartkarma-citation="entities:25889:1" rel="noopener">Cromwell European Reit (CERT SP)</a>, who will share a short presentation on key aspects of the company and have a fireside chat with Smartkarma Insight Provider, <a href="https://www.smartkarma.com/profiles/angus-mackintosh" target="_blank" rel="noopener">Angus Mackintosh</a>. This will be followed by a live Q&amp;A session.</p>
<h3>This Corporate Webinar will be hosted on Tuesday, 12/January/2021, 5:00PM SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=84155705817" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<p>Every week, Corporate Webinars by <a href="https://www.smartkarma.com/home/corporate-solutions/" target="_blank" rel="noopener">Smartkarma Corporate Solutions</a> feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.</p>
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In our first Smartkarma Corporate Webinar for this year, we welcome Simon Garing, CEO and Executive Director at Cromwell European Reit (CERT SP), who will share a short presentation on key aspects of the company and have a fireside chat with Smartkarma Insight Provider, Angus Mackintosh. This will be followed by a live Q&amp;A session.
This Corporate Webinar will be hosted on Tuesday, 12/January/2021, 5:00PM SGT/HKT.



Register for the Webinar here




Every week, Corporate Webinars by Smartkarma Corporate Solutions feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.


Smartkarma Corporate Webinar | Cromwell E-REIT: Active Transactions in the Time of Covid

Singapore

Cromwell Real Estate Investment Trust is a real estate investment trust with a commercial portfolio of offices and light industrial /  logistics assets across Europe.

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Cromwell European REIT (CERT SP)

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