Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Event-Driven

Daiwa House Reit Investment / Event-Driven

On Friday after the close, <a href="https://www.smartkarma.com/entities/237" target="_blank" data-smartkarma-citation="entities:237">Daiwa House</a>-affiliated J-REITs <a href="https://www.smartkarma.com/entities/11283" target="_blank" data-smartkarma-citation="entities:11283">Daiwa House Residential Investment Corporation</a> (which we will call DH Resi "IC") and <a href="https://www.smartkarma.com/entities/6512" target="_blank" data-smartkarma-citation="entities:6512">Daiwa House REIT Investment Corporation</a> (which we will call "DH REIT IC") announced they would merge. The rationale was stated to be "enhanced external growth potential" through a shift to being a "diversified REIT", "scale enhancement", and "acceleration of growth leveraging the value chain of Daiwa House Group's integrated capabilities."These sound nice. The other way to read this is could be something like.... Daiwa House wants to take advantage of historically low cap rates to stuff more properties into its REITs while the stuffing is good, and needs to make its REIT vehicle bigger and more diversified so there are fewer limits on what it can stuff in, and larger deals can be done at a time, and cap rates can be even lower.Or something like that.The form of the merger is like a normal corporate merger. A majority of unitholders must 'attend' the unitholder meeting, and two-thirds of those present approve the merger. Given the shareholder structure, it is highly likely to go smoothly, and there is something in it for everyone.The structure of the merger is that DH Resi IC takes over DH REIT IC, then renames itself Daiwa House REIT Investment Corporation. The two asset managers responsible for the REITs will also merge. On a pro-forma basis, the two REITs, currently #19 and #27 in asset size among the listed J-REITs would combine to form the #7 REIT in the market at just over 500bn yen in assets.  At the time of the merger, Daiwa House Group will sell an additional six properties worth 17bn yen to the merged REIT. The ratio is 2.2 to 1 - i.e. DH REIT IC shareholders will get 2.2 shares of Merged REIT for every 1 share of DH REIT IC they own. The merger is scheduled to be completed as of 1st September 2016. More below the fold for subscribers...

On Friday after the close, Daiwa House-affiliated J-REITs Daiwa House Residential Investment Corporation (which we will call DH Resi "IC") and Daiwa House REIT Investment Corporation (which we will call "DH REIT IC") announced they would merge. The rationale was stated to be "enhanced external growth potential" through a shift to being a "diversified REIT", "scale enhancement", and "acceleration of growth leveraging the value chain of Daiwa House Group's integrated capabilities."These sound nice. The other way to read this is could be something like.... Daiwa House wants to take advantage of historically low cap rates to stuff more properties into its REITs while the stuffing is good, and needs to make its REIT vehicle bigger and more diversified so there are fewer limits on what it can stuff in, and larger deals can be done at a time, and cap rates can be even lower.Or something like that.The form of the merger is like a normal corporate merger. A majority of unitholders must 'attend' the unitholder meeting, and two-thirds of those present approve the merger. Given the shareholder structure, it is highly likely to go smoothly, and there is something in it for everyone.The structure of the merger is that DH Resi IC takes over DH REIT IC, then renames itself Daiwa House REIT Investment Corporation. The two asset managers responsible for the REITs will also merge. On a pro-forma basis, the two REITs, currently #19 and #27 in asset size among the listed J-REITs would combine to form the #7 REIT in the market at just over 500bn yen in assets.  At the time of the merger, Daiwa House Group will sell an additional six properties worth 17bn yen to the merged REIT. The ratio is 2.2 to 1 - i.e. DH REIT IC shareholders will get 2.2 shares of Merged REIT for every 1 share of DH REIT IC they own. The merger is scheduled to be completed as of 1st September 2016. More below the fold for subscribers...

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

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

Research Reinvented

Equity Capital Markets

Nippon Prologis Reit / Equity Capital Markets

Nippon Prologis REIT plans to raise US$223m/JPY27bn through its follow-on offering. The proceeds from the deal will be used to acquire four properties from its sponsor, Prologis.The deal scores well on our framework, given that its an accretive acquisition, past deals have done well, and the stock has outperformed its peers in the recent past.<h2>Placement specifics</h2><ul>
<li>Company Name: Nippon Prologis REIT Inc</li>
<li>Ticker: 3283 JP Equity</li>
<li>Primary placement -Follow-on Offering</li>
<li>Settlement is on X+6 days, with stock…</li>
</ul>

Nippon Prologis REIT plans to raise US$223m/JPY27bn through its follow-on offering. The proceeds from the deal will be used to acquire four properties from its sponsor, Prologis.The deal scores well on our framework, given that its an accretive acquisition, past deals have done well, and the stock has outperformed its peers in the recent past.Placement specifics
Company Name: Nippon Prologis REIT Inc
Ticker: 3283 JP Equity
Primary placement -Follow-on Offering
Settlement is on X+6 days, with stock…


Nippon Prologis REIT - Accretive Acquisition and Good past Deal Performance

Japan

Daiwa House REIT Investment Corporation is a real estate investment trust (REIT). The Company invests in real estate properties such as commercial and logistic facilities.

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Daiwa House Reit Investment (3263 JP)

Daiwa House REIT Family Merger

On Friday after the close, Daiwa House-affiliated J-REITs Daiwa House Residential Investment Corporation (which we will call DH Resi "IC")...

Travis Lundy

Nippon Prologis REIT - Accretive Acquisition and Good past Deal Performance

Nippon Prologis REIT plans to raise US$223m/JPY27bn through its follow-on offering. The proceeds from the deal will be used to acquire four...

Sumeet Singh

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