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)

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Equity Bottom-Up

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<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX.</strong>&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
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<p>PRICE PERFORMANCE</p>
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<h2>Dasin Retail Trust</h2>
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<h3>COMPANY DESCRIPTION</h3>
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<p>Dasin Retail Trust and its subsidiaries (collectively defined herein as DRT) is a China retail property trust listed on SGX providing direct exposure to Guangdong Hong Kong Macau Greater Bay Area (Greater Bay Area). It has a portfolio of seven retail malls in Zhongshan, Zhuhai and Foshan cities in Guangdong with an aggregate gross floor area (GFA) and net lettable area (NLA) of approximately 794,017 sq m and 386,529 sq m respectively.</p>
<h3>SUMMARY</h3>
<p>For financial year ended 31 December 2021 (FY2021) DRT recorded revenue of S$101.3 million, a 15.8% increase from S$87.5 million over the same period a year ago. Net property income (NPI) also increased by 10.9% from S$70.7 million in FY2020 to S$78.4 million in FY2021. This was mainly due to the full year contribution from Shunde Metro Mall and Tanbei Metro Mall which were acquired in July 2020 and higher revenue from Shiqi Metro Mall, Ocean Metro Mall and Dasin E-Colour due to recovery from the impact of Covid-19 as well as lower rental rebates granted to tenants. In line with the growth in revenue and NPI, distributable income surged by 79.4% to S$36.9 million in FY2021 from S$20.6 million in FY2020. This led to a distribution per unit (DPU) of 5.22 cents for FY2021. For the second half of 2021 (2H2021), DRT declared a dividend of 2.24 cents to be paid on 30 March 2022. Further, DRT’s earnings was negatively impacted by net fair value loss on investment properties of S$62.8 million. Consequently DRT reported a loss per share of 6.26 cents in FY2021.</p>
<h3>RECOMMENDATION</h3>
<p>Since our initiation report on 27 July 2021, when DRT’s share price closed at S$0.515, we note that the share price weakened. From then till present, the share price is down about 40% to the current price of S$0.310. Meanwhile, in terms of valuation, based on our adjusted NAV per share of S$1.40, the share is currently trading at a PB multiple of 0.22x and is trading at approximately 78% to NAV. Our peer comparison results show that DRT could be undervalued given a lower PB compared to its peer average PB of 0.76x. In addition, we note that DRT could be relatively attractive in terms of dividend yield. Our evaluation of the peer comparison results lead us to believe that it may be reasonable for DRT to trade at S$0.616 which represent a 98.71% upside from the current price. However, as there are uncertainties surrounding the sale of the two properties and multiple extension of its loans, we believe that it could be more reasonable for DRT’s share price to recover to S$0.515, which was DRT’s share price as of our initiation report on 27 July 2021. We have considered that even with the sale of the two properties to repay its debts, the upside would be dependent on what the management does going forward. In addition, if Sino-Ocean Capital were to inject its assets into DRT, it might also initiate a rights offering to raise funds, which could dilute the unitholders’ interests. Considering the above, we will revise our recommendation downwards to neutral from buy.</p>
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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.




PRICE PERFORMANCE




Dasin Retail Trust




COMPANY DESCRIPTION




Dasin Retail Trust and its subsidiaries (collectively defined herein as DRT) is a China retail property trust listed on SGX providing direct exposure to Guangdong Hong Kong Macau Greater Bay Area (Greater Bay Area). It has a portfolio of seven retail malls in Zhongshan, Zhuhai and Foshan cities in Guangdong with an aggregate gross floor area (GFA) and net lettable area (NLA) of approximately 794,017 sq m and 386,529 sq m respectively.
SUMMARY
For financial year ended 31 December 2021 (FY2021) DRT recorded revenue of S$101.3 million, a 15.8% increase from S$87.5 million over the same period a year ago. Net property income (NPI) also increased by 10.9% from S$70.7 million in FY2020 to S$78.4 million in FY2021. This was mainly due to the full year contribution from Shunde Metro Mall and Tanbei Metro Mall which were acquired in July 2020 and higher revenue from Shiqi Metro Mall, Ocean Metro Mall and Dasin E-Colour due to recovery from the impact of Covid-19 as well as lower rental rebates granted to tenants. In line with the growth in revenue and NPI, distributable income surged by 79.4% to S$36.9 million in FY2021 from S$20.6 million in FY2020. This led to a distribution per unit (DPU) of 5.22 cents for FY2021. For the second half of 2021 (2H2021), DRT declared a dividend of 2.24 cents to be paid on 30 March 2022. Further, DRT’s earnings was negatively impacted by net fair value loss on investment properties of S$62.8 million. Consequently DRT reported a loss per share of 6.26 cents in FY2021.
RECOMMENDATION
Since our initiation report on 27 July 2021, when DRT’s share price closed at S$0.515, we note that the share price weakened. From then till present, the share price is down about 40% to the current price of S$0.310. Meanwhile, in terms of valuation, based on our adjusted NAV per share of S$1.40, the share is currently trading at a PB multiple of 0.22x and is trading at approximately 78% to NAV. Our peer comparison results show that DRT could be undervalued given a lower PB compared to its peer average PB of 0.76x. In addition, we note that DRT could be relatively attractive in terms of dividend yield. Our evaluation of the peer comparison results lead us to believe that it may be reasonable for DRT to trade at S$0.616 which represent a 98.71% upside from the current price. However, as there are uncertainties surrounding the sale of the two properties and multiple extension of its loans, we believe that it could be more reasonable for DRT’s share price to recover to S$0.515, which was DRT’s share price as of our initiation report on 27 July 2021. We have considered that even with the sale of the two properties to repay its debts, the upside would be dependent on what the management does going forward. In addition, if Sino-Ocean Capital were to inject its assets into DRT, it might also initiate a rights offering to raise funds, which could dilute the unitholders’ interests. Considering the above, we will revise our recommendation downwards to neutral from buy.













(Non-SGX Report) PRICE PERFORMANCE - Dasin Retail Trust

Far East Hospitality Trust / Equity Bottom-Up

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    <div class='content-caption'>Top 10 performing SREITs</div>
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<p>Singapore announced the easing of Covid-19 measures on March 24 as the country takes a "decisive but measured step forward" towards living with Covid-19.</p>

<p>With the risk of outdoor transmission significantly lower, it will soon be optional to wear masks outdoors in Singapore while the maximum group size for social gatherings as well as dining in will double from 5 to 10. Certain large-scale social gatherings are also permitted to resume.</p>

<p>Office spaces are expected to be filled up again, as up to 75 per cent of those who can work from home are now allowed to return to their workplaces, up from 50 per cent previously.<br><br>
Cross-border travel is also expected to ease substantially from Apr 1, as travellers no longer have to take designated vaccinated travel lanes (VTL) to enter Singapore quarantine-free.<br><br>
Such moves will help to "reconnect Singapore with the world" and "give a much-needed boost to businesses, particularly the tourism sector, and help Singapore reclaim its position as a business and aviation hub" said Prime Minister Lee Hsien Loong during his speech.<br><br>
Following the announcement, the Straits Times Index (STI) gained 1.1 per cent during Thursday's (Mar 24) trading session, driven by a rally in aviation, transport, tourism and retail-related stocks.<br><br>
Similarly, S-Reits recorded gains, with the iEdge S-Reit Index increasing 1 per cent in the trading session, led by trusts with significant exposure to Singapore related retail, hospitality, and office assets.</p>

<p>Hospitality S-Reits gained 3.5 per cent while retail S-Reits gained 1.5 per cent. More notably, hospitality and retail S-Reits saw a surge in trading activities on Thursday with S$27.4 million and S$21.4 million in traded value respectively.</p>

<p>This represents over 211 per cent and 58 per cent increases respectively, against their 3-month average daily traded value.<br><br>
Diversified S-REITs also gained an average of 1.8 per cent over Thursday, led by trusts (Lendlease Global Commercial REIT, OUE Commercial REIT and Suntec REIT) with substantial exposure to the retail and office segments in Singapore.<br><br>
Lendlease Global Commercial Reit (LReit), which owns prime retail properties in Singapore and grade-A office buildings in Milan, was the top performer for the day with over 7 per cent gains.<br><br>
In February, LReit proposed to acquire the remaining interest in JEM mall for close to S$2 billion.<br><br>
LReit expects the acquisition to further boost the Reit's portfolio income diversification and provide approximately 10.5 per cent distribution per unit (DPU) accretion upon completion.<br><br>
Post-acquisition, LReit's exposure to the resilient suburban retail sector is expected to increase from 16.3 per cent to 46.8 per cent and its Singapore-centric asset base to be close to 88 per cent of its total portfolio value.<br><br>
CDL Hospitality Trusts (CDLHT), which owns hotel properties across Asia Pacific and Europe, rose 6 per cent over the trading day following the announcement of easing travel restrictions.<br><br>
CDLHT's Singapore portfolio (approximately 64.9 per cent by total portfolio valuation) continued to be impacted by the absence of major meetings, incentives, conferences, and exhibitions (MICE) events, large wedding banquets and social functions in FY 2021.</p>

<p>The trust remains optimistic in Singapore's commitment to reopening and returning to normalcy.<br><br><strong><em>REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/green-shoots-for-retail-and-hospitality-s-reits-amid-new-pandemic-phase"> </a><a href="https://www.businesstimes.com.sg/companies-markets/retail-hotel-office-s-reits-gain-with-relaxed-covid-rules-0">read</a><a href="https://www.businesstimes.com.sg/companies-markets/pure-play-china-s-reits-record-strong-2021-growth-0"> </a>the original version.</em></strong></p>
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    Top 10 performing SREITs


Singapore announced the easing of Covid-19 measures on March 24 as the country takes a "decisive but measured step forward" towards living with Covid-19.

With the risk of outdoor transmission significantly lower, it will soon be optional to wear masks outdoors in Singapore while the maximum group size for social gatherings as well as dining in will double from 5 to 10. Certain large-scale social gatherings are also permitted to resume.

Office spaces are expected to be filled up again, as up to 75 per cent of those who can work from home are now allowed to return to their workplaces, up from 50 per cent previously.  
Cross-border travel is also expected to ease substantially from Apr 1, as travellers no longer have to take designated vaccinated travel lanes (VTL) to enter Singapore quarantine-free.  
Such moves will help to "reconnect Singapore with the world" and "give a much-needed boost to businesses, particularly the tourism sector, and help Singapore reclaim its position as a business and aviation hub" said Prime Minister Lee Hsien Loong during his speech.  
Following the announcement, the Straits Times Index (STI) gained 1.1 per cent during Thursday's (Mar 24) trading session, driven by a rally in aviation, transport, tourism and retail-related stocks.  
Similarly, S-Reits recorded gains, with the iEdge S-Reit Index increasing 1 per cent in the trading session, led by trusts with significant exposure to Singapore related retail, hospitality, and office assets.

Hospitality S-Reits gained 3.5 per cent while retail S-Reits gained 1.5 per cent. More notably, hospitality and retail S-Reits saw a surge in trading activities on Thursday with S$27.4 million and S$21.4 million in traded value respectively.

This represents over 211 per cent and 58 per cent increases respectively, against their 3-month average daily traded value.  
Diversified S-REITs also gained an average of 1.8 per cent over Thursday, led by trusts (Lendlease Global Commercial REIT, OUE Commercial REIT and Suntec REIT) with substantial exposure to the retail and office segments in Singapore.  
Lendlease Global Commercial Reit (LReit), which owns prime retail properties in Singapore and grade-A office buildings in Milan, was the top performer for the day with over 7 per cent gains.  
In February, LReit proposed to acquire the remaining interest in JEM mall for close to S$2 billion.  
LReit expects the acquisition to further boost the Reit's portfolio income diversification and provide approximately 10.5 per cent distribution per unit (DPU) accretion upon completion.  
Post-acquisition, LReit's exposure to the resilient suburban retail sector is expected to increase from 16.3 per cent to 46.8 per cent and its Singapore-centric asset base to be close to 88 per cent of its total portfolio value.  
CDL Hospitality Trusts (CDLHT), which owns hotel properties across Asia Pacific and Europe, rose 6 per cent over the trading day following the announcement of easing travel restrictions.  
CDLHT's Singapore portfolio (approximately 64.9 per cent by total portfolio valuation) continued to be impacted by the absence of major meetings, incentives, conferences, and exhibitions (MICE) events, large wedding banquets and social functions in FY 2021.

The trust remains optimistic in Singapore's commitment to reopening and returning to normalcy.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Retail, hotel, office S-Reits gain with relaxed Covid rules

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    <div class='content-caption'>Five trusts with 100% assets in China</div>
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<p>Listed on SGX are 4 S-Reits and 1 property trust with pure exposure to China. These trusts have assets across sub-sectors such as retail malls, logistics and industrial, and office and business parks based in China.</p>

<p>All 5 trusts have recorded stronger rental income and declared increases in distributions made to unitholders for full year 2021. Common themes across their full-year earnings were resilient portfolio occupancy rates, recovery in shopper footfalls and tenant sales, and contributions from acquisitions despite recent Covid-19 resurgences.<br><br>
CapitaLand China Trust (CLCT), which is diversified across 11 retail assets, five business parks and four logistics properties, reported 37.5 per cent higher FY2021 distribution per unit (DPU) and 85.2 per cent higher annual net property income (NPI) for the year. Increases were due to new contributions from its recently acquired logistics and business park portfolios, Rock Square and CapitaMall Nuohemule.<br><br>
CLCT noted better occupancy rate of 96.3 per cent in FY2021, alongside higher tenant sales and shopper traffic of 16.1 per cent and 9.3 per cent respectively despite mall closures and restrictions due to sporadic Covid-19 outbreaks.</p>

<p>Beyond retail malls, CLCT now has a combined 21.9 per cent exposure to new economy assets through its business park and logistics portfolio which registered 7.0 per cent and 2.7 per cent in rental reversion respectively in FY2021. CLCT is also the first S-Reit to secure a loan linked to the sustainability performance of a China portfolio.<br><br>
Sasseur REIT and its portfolio of four retail outlet malls posted 8.5 per cent growth in DPU and 10.1 per cent growth in entrusted management agreement (EMA) rental income in FY2021, despite COVID-19 disruptions.<br><br>
The Reit saw continued robust consumption trends in the cities where its outlets are located, coupled with intensive promotional efforts with tenants which drove higher sales. Its portfolio occupancy rate rose to 94.5 per cent in Q42021 compared to 93.7 per cent in Q32021. The Reit believes that it will continue to benefit from China's domestic consumption.<br><br>
EC World REIT (ECW) is a specialised logistics and e-commerce logistics REIT with eight properties in Hangzhou and Wuhan. The REIT recorded 12.7 per cent growth in NPI and 16.9 per cent increase in DPU, largely due to the absence of one-off rebates provided to tenants in FY2020. Its portfolio has an occupancy rate of 99.2 per cent as of 31 December 2021 and is diversified across three segments: e-commerce logistics (41.8 per cent of portfolio valuation), port logistics (40.5 per cent), and specialised logistics (17.8 per cent).<br><br>
On Jan 10, 2022, ECW received a formal notice in relation to the compulsory expropriation of Fu Zhuo Industrial and is entitled to receive compensation based on the expropriation valuation. The Reit does not expect the compulsory expropriation to have a material impact on its portfolio and Fu Zhuo Industrial accounts for under 1.5 per cent of its portfolio valuation and 1.6 per cent of its NPI in FY2021.<br><br>
BHG Retail REIT across its six retail malls reported increases of 14.9 per cent in NPI and 11.3 per cent in DPU for FY2021. The REIT noted that its malls continued to see healthy leasing demands with occupancy rate at 97.0 per cent as at 31 December 2021 alongside healthy retention rates. The REIT will remain cautious about risks of COVID-19 resurgence and continues to refresh its malls’ offerings to pursue growth opportunities.<br><br>
Dasin Retail Trust has a portfolio of seven retail malls and registered increases of 10.9 per cent in NPI and 32.5 per cent in DPU for FY2021. It maintains an occupancy rate of 93.9 per cent across a diversified tenant base with no single trade sector contributing over 25.0 per cent of its gross rental income. The Trust Manager also looks to source new expansion opportunities with its new strategic partner and major shareholder Sino-Ocean Capital.<br><br><strong><em>REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/green-shoots-for-retail-and-hospitality-s-reits-amid-new-pandemic-phase"> </a><a href="https://www.businesstimes.com.sg/companies-markets/pure-play-china-s-reits-record-strong-2021-growth-0">read </a>the original version.</em></strong></p>
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    Five trusts with 100% assets in China


Listed on SGX are 4 S-Reits and 1 property trust with pure exposure to China. These trusts have assets across sub-sectors such as retail malls, logistics and industrial, and office and business parks based in China.

All 5 trusts have recorded stronger rental income and declared increases in distributions made to unitholders for full year 2021. Common themes across their full-year earnings were resilient portfolio occupancy rates, recovery in shopper footfalls and tenant sales, and contributions from acquisitions despite recent Covid-19 resurgences.  
CapitaLand China Trust (CLCT), which is diversified across 11 retail assets, five business parks and four logistics properties, reported 37.5 per cent higher FY2021 distribution per unit (DPU) and 85.2 per cent higher annual net property income (NPI) for the year. Increases were due to new contributions from its recently acquired logistics and business park portfolios, Rock Square and CapitaMall Nuohemule.  
CLCT noted better occupancy rate of 96.3 per cent in FY2021, alongside higher tenant sales and shopper traffic of 16.1 per cent and 9.3 per cent respectively despite mall closures and restrictions due to sporadic Covid-19 outbreaks.

Beyond retail malls, CLCT now has a combined 21.9 per cent exposure to new economy assets through its business park and logistics portfolio which registered 7.0 per cent and 2.7 per cent in rental reversion respectively in FY2021. CLCT is also the first S-Reit to secure a loan linked to the sustainability performance of a China portfolio.  
Sasseur REIT and its portfolio of four retail outlet malls posted 8.5 per cent growth in DPU and 10.1 per cent growth in entrusted management agreement (EMA) rental income in FY2021, despite COVID-19 disruptions.  
The Reit saw continued robust consumption trends in the cities where its outlets are located, coupled with intensive promotional efforts with tenants which drove higher sales. Its portfolio occupancy rate rose to 94.5 per cent in Q42021 compared to 93.7 per cent in Q32021. The Reit believes that it will continue to benefit from China's domestic consumption.  
EC World REIT (ECW) is a specialised logistics and e-commerce logistics REIT with eight properties in Hangzhou and Wuhan. The REIT recorded 12.7 per cent growth in NPI and 16.9 per cent increase in DPU, largely due to the absence of one-off rebates provided to tenants in FY2020. Its portfolio has an occupancy rate of 99.2 per cent as of 31 December 2021 and is diversified across three segments: e-commerce logistics (41.8 per cent of portfolio valuation), port logistics (40.5 per cent), and specialised logistics (17.8 per cent).  
On Jan 10, 2022, ECW received a formal notice in relation to the compulsory expropriation of Fu Zhuo Industrial and is entitled to receive compensation based on the expropriation valuation. The Reit does not expect the compulsory expropriation to have a material impact on its portfolio and Fu Zhuo Industrial accounts for under 1.5 per cent of its portfolio valuation and 1.6 per cent of its NPI in FY2021.  
BHG Retail REIT across its six retail malls reported increases of 14.9 per cent in NPI and 11.3 per cent in DPU for FY2021. The REIT noted that its malls continued to see healthy leasing demands with occupancy rate at 97.0 per cent as at 31 December 2021 alongside healthy retention rates. The REIT will remain cautious about risks of COVID-19 resurgence and continues to refresh its malls’ offerings to pursue growth opportunities.  
Dasin Retail Trust has a portfolio of seven retail malls and registered increases of 10.9 per cent in NPI and 32.5 per cent in DPU for FY2021. It maintains an occupancy rate of 93.9 per cent across a diversified tenant base with no single trade sector contributing over 25.0 per cent of its gross rental income. The Trust Manager also looks to source new expansion opportunities with its new strategic partner and major shareholder Sino-Ocean Capital.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Pure-play China S-Reits record strong 2021 growth

Lendlease Global Commercial REIT / Equity Bottom-Up

Lendlease Global Commercial REIT (LREIT SP)

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<p>In the year to date, Singapore-listed Reits and property trusts averaged total returns of close to 11 per cent. The 10 best-performing trusts were mostly mid-caps, which averaged 32 per cent total returns and own assets across industrial, retail, healthcare, office and hospitality sub-segments.</p>

<p>Among the 10 best performers, seven were recent inclusions into the FTSE EPRA Nareit Global Developed Index following the September review.<br><br>
The five trusts which received the highest amount of net institutional inflows this year were mid-cap REITs (data as of 28 October): ARA LOGOS Logistics Trust (+S$79 million), OUE Commercial REIT (+S$39 million), Starhill Global REIT (+S$36 million), Lendlease Global Commercial REIT (+S$27 million) and ESR-REIT (+S$26 million).<br><br>
In the month of October, the sector averaged 3 per cent in total returns. Retail investors net bought the sector with net inflows of S$158 million while institutional investors net sold S$195 million (data as at Oct 28).<br><br>
Four of the top five performers over the month were trusts with exposure to the retail or hospitality segments - Dasin Retail Trust (21 per cent), CDL Hospitality Trusts (15 per cent), Ascott Residence Trust (11 per cent), Lippo Malls Indonesia Retail Trust (8 per cent) and Keppel REIT (7 per cent). Three of them reported before market opened last Friday.<br><br>
CDLHT reported year-on-year (yoy) growth of 34.8 per cent in net property income for Q3 2021 attributable to the ongoing recovery from negative effects of the pandemic, broader distribution of vaccines as well as easing of travel restrictions which resulted in more accommodation demand.<br><br>
LMIRT declared Q3 2021 distribution per unit (DPU) of 0.09 cents, up 28.6 per cent yoy. The trust's rental revenue and gross revenue for the period grew 16.2 per cent and 7.0 per cent yoy respectively, due to income from the newly acquired Lippo Mall Puri, which contributed S$8.2 million to rental revenue and S$10.3 million to gross revenue for the quarter.</p>

<p>Keppel Reit reported 20.8 per cent yoy growth in distributable income from operations for the nine months of 2021, due mainly to contributions from Victoria Police Centre in Melbourne, Pinnacle Office Park in Sydney and Keppel Bay Tower in Singapore. The Reit noted that despite the pandemic, portfolio leasing activities remained positive with new leases and expansions seen from diverse industry sectors.</p>

<p>Aside from the three trusts above, more than half of the 40 S-Reits have also released financial results or business updates, before market opened last Friday.</p>

<p>Most of the trusts reported financial and operating metrics which were in line with analysts' estimates, with some exceeding expectations.</p>

<p>Among the trusts that have reported, 14 of them declared DPUs for the latest quarter or half year period. These trusts, on average, saw a 20 per cent year-on-year growth in declared DPUs. Some reasons provided for the increase in DPUs across these trusts include new acquisitions which boosted revenues, lower rental rebates which reduced expense and gradual reopening across the globe.<br><br><strong><em>REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/retail-and-hospitality-sector-s-reits-outperform-in-october"> read </a>the original version.</em></strong></p>
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    Top performer SREIT and property


In the year to date, Singapore-listed Reits and property trusts averaged total returns of close to 11 per cent. The 10 best-performing trusts were mostly mid-caps, which averaged 32 per cent total returns and own assets across industrial, retail, healthcare, office and hospitality sub-segments.

Among the 10 best performers, seven were recent inclusions into the FTSE EPRA Nareit Global Developed Index following the September review.  
The five trusts which received the highest amount of net institutional inflows this year were mid-cap REITs (data as of 28 October): ARA LOGOS Logistics Trust (+S$79 million), OUE Commercial REIT (+S$39 million), Starhill Global REIT (+S$36 million), Lendlease Global Commercial REIT (+S$27 million) and ESR-REIT (+S$26 million).  
In the month of October, the sector averaged 3 per cent in total returns. Retail investors net bought the sector with net inflows of S$158 million while institutional investors net sold S$195 million (data as at Oct 28).  
Four of the top five performers over the month were trusts with exposure to the retail or hospitality segments - Dasin Retail Trust (21 per cent), CDL Hospitality Trusts (15 per cent), Ascott Residence Trust (11 per cent), Lippo Malls Indonesia Retail Trust (8 per cent) and Keppel REIT (7 per cent). Three of them reported before market opened last Friday.  
CDLHT reported year-on-year (yoy) growth of 34.8 per cent in net property income for Q3 2021 attributable to the ongoing recovery from negative effects of the pandemic, broader distribution of vaccines as well as easing of travel restrictions which resulted in more accommodation demand.  
LMIRT declared Q3 2021 distribution per unit (DPU) of 0.09 cents, up 28.6 per cent yoy. The trust's rental revenue and gross revenue for the period grew 16.2 per cent and 7.0 per cent yoy respectively, due to income from the newly acquired Lippo Mall Puri, which contributed S$8.2 million to rental revenue and S$10.3 million to gross revenue for the quarter.

Keppel Reit reported 20.8 per cent yoy growth in distributable income from operations for the nine months of 2021, due mainly to contributions from Victoria Police Centre in Melbourne, Pinnacle Office Park in Sydney and Keppel Bay Tower in Singapore. The Reit noted that despite the pandemic, portfolio leasing activities remained positive with new leases and expansions seen from diverse industry sectors.

Aside from the three trusts above, more than half of the 40 S-Reits have also released financial results or business updates, before market opened last Friday.

Most of the trusts reported financial and operating metrics which were in line with analysts' estimates, with some exceeding expectations.

Among the trusts that have reported, 14 of them declared DPUs for the latest quarter or half year period. These trusts, on average, saw a 20 per cent year-on-year growth in declared DPUs. Some reasons provided for the increase in DPUs across these trusts include new acquisitions which boosted revenues, lower rental rebates which reduced expense and gradual reopening across the globe.  REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Retail and hospitality sector S-Reits outperform in October

<p><em><strong>Non- SGX Report: These equity research reports are not written by the SGX</strong>.&nbsp;SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
<p>Initiating Coverage</p>
<h2>Dasin Retail Trust</h2>
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<p><strong>COMPANY DESCRIPTION</strong><br><span style="font-size: var(--content-font-size);">Dasin Retail Trust (DRT) is a China retail property trust listed on SGX providing direct exposure to Guangdong Hong Kong Macau Greater Bay Area (Greater Bay Area). It has a portfolio of seven retail malls in Zhongshan, Zhuhai and Foshan cities in Guangdong. These properties host a tenant base of over 500 local and international retailers.</span></p>
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<p><strong>SUMMARY</strong><br>Owing to the COVID-19 pandemic, Revenue for FY2020 was impacted by lower rental income and rental rebates provided to tenants. However, the Group, comprising DRT and its subsidiaries, recorded a 15.1% year-on-year (y-o-y) growth in revenue for the financial year ended 31 December 2020 mainly due to contributions from acquisitions completed in 2019 and 2020. During the period, the Group reported a Distribution Per Unit (DPU) of 3.94 cents compared to 6.82 cents in FY2019. During the period, the Group’s earnings was negatively impacted by a net fair value loss on investment properties of S$104.7 million compared to a loss of S$20.8 million a year ago. Consequently, the Group reported a loss per share of 10.18 cents in FY2020.</p>
<p><strong>RECOMMENDATION</strong><br>Based on DRT reported NAV per share of S$1.41 as at 31 December 2020, the share is currently trading at a P/B of 0.37x, presenting a discount of approximately 63% to NAV. Our peer comparison results show that the Company could be undervalued, given a lower PB of 0.37x compared to peer average P/B of 0.87x. In addition, we note that DRT could be relatively attractive in terms of dividend yield. Our evaluation of the peer comparison results lead us to believe that it may be reasonable for DRT to trade at the P/B multiple of 0.51x. Adopting a relative valuation approach, we estimate a target price of S$0.719 which represent a 39.61% upside from the current price. We believe this upside could be justified by potential growth in the Group’s earnings as supported by the positive outlook on China’s economy and its strategic partnership with Sino-Ocean Capital. Given the above, we believe a buy recommendation is warranted on DRT.</p>
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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.
Initiating Coverage
Dasin Retail Trust



COMPANY DESCRIPTION Dasin Retail Trust (DRT) is a China retail property trust listed on SGX providing direct exposure to Guangdong Hong Kong Macau Greater Bay Area (Greater Bay Area). It has a portfolio of seven retail malls in Zhongshan, Zhuhai and Foshan cities in Guangdong. These properties host a tenant base of over 500 local and international retailers.

SUMMARY Owing to the COVID-19 pandemic, Revenue for FY2020 was impacted by lower rental income and rental rebates provided to tenants. However, the Group, comprising DRT and its subsidiaries, recorded a 15.1% year-on-year (y-o-y) growth in revenue for the financial year ended 31 December 2020 mainly due to contributions from acquisitions completed in 2019 and 2020. During the period, the Group reported a Distribution Per Unit (DPU) of 3.94 cents compared to 6.82 cents in FY2019. During the period, the Group’s earnings was negatively impacted by a net fair value loss on investment properties of S$104.7 million compared to a loss of S$20.8 million a year ago. Consequently, the Group reported a loss per share of 10.18 cents in FY2020.
RECOMMENDATION Based on DRT reported NAV per share of S$1.41 as at 31 December 2020, the share is currently trading at a P/B of 0.37x, presenting a discount of approximately 63% to NAV. Our peer comparison results show that the Company could be undervalued, given a lower PB of 0.37x compared to peer average P/B of 0.87x. In addition, we note that DRT could be relatively attractive in terms of dividend yield. Our evaluation of the peer comparison results lead us to believe that it may be reasonable for DRT to trade at the P/B multiple of 0.51x. Adopting a relative valuation approach, we estimate a target price of S$0.719 which represent a 39.61% upside from the current price. We believe this upside could be justified by potential growth in the Group’s earnings as supported by the positive outlook on China’s economy and its strategic partnership with Sino-Ocean Capital. Given the above, we believe a buy recommendation is warranted on DRT.




(Non-SGX Report) Initiating Coverage: Dasin Retail Trust

Singapore

Dasin Retail Trust is a Singapore-based retail property trust that invests in and develops income-producing real estate, primarily retail malls, in Greater China, with a focus on the Guangdong-Hong Kong-Macau Greater Bay Area. Its portfolio includes seven retail malls in Zhongshan, Zhuhai, and Foshan cities in Guangdong, PRC. The trust was listed on the Singapore Exchange on January 20, 2017, and is headquartered in Singapore.

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Dasin Retail Trust (DASIN SP)

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