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)

<p>Far East Hospitality Trust (FEHT SP) 2H21 DPU +10.9% YoY; Encouraging signs of recovery on RevPAR and RevPAU QoQ</p><p>Lendlease Global Commercial REIT (LREIT SP) to acquire remaining stake at JEM; DPU accretive by ~10%</p><p>Real estate blockchain firm Fraxtor receives capital markets services (CMS) licence from MAS</p>

Far East Hospitality Trust (FEHT SP) 2H21 DPU +10.9% YoY; Encouraging signs of recovery on RevPAR and RevPAU QoQLendlease Global Commercial REIT (LREIT SP) to acquire remaining stake at JEM; DPU accretive by ~10%Real estate blockchain firm Fraxtor receives capital markets services (CMS) licence from MAS

ASEAN Builder's Scoop (15Feb22) - FEHT Encouraging Signs of Recovery QoQ

<ul><li>New private home sales fell 58.0% MoM in Dec21; Closing 2021 with 29% YoY increase and 112% average take-up rate</li><li>Proxy advisory Institutional Shareholder Services (ISS) recommends voting against merger of ALLT-EREIT</li><li><a href="https://www.smartkarma.com/entities/doubledragon-properties-corp" target="_blank" data-smartkarma-citation="entities:23011" rel="noopener">Doubledragon Properties (DD PM)</a> completes Phase 4 of warehouse complex (Regina Capital)</li></ul>

New private home sales fell 58.0% MoM in Dec21; Closing 2021 with 29% YoY increase and 112% average take-up rateProxy advisory Institutional Shareholder Services (ISS) recommends voting against merger of ALLT-EREITDoubledragon Properties (DD PM) completes Phase 4 of warehouse complex (Regina Capital)

New Home Sales up 29% YoY in 2021; ISS Voting Against ALLT-EREIT Merger

<h2>Singapore</h2>
<h3>Cuscaden Peak minimum chain offer price for each <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994" rel="noopener">SPH REIT (SPHREIT SP)</a> unit stands at S$96.4c</h3>
<ul>
<li>The minimum chain offer price, which consortium Cuscaden Peak will have to offer for each SPHREIT if its acquisition bid for Singapore Press Holdings (SPH SP) succeeds is S$96.4c, fully in cash. The consortium had made a surprise rival bid to privatise SPH, following an earlier offer from Keppel Corp (KEP SP). Such an acquisition would take place by way of a scheme of arrangement. Subject to the finalisation of the terms of such a scheme, the completion of Cuscaden's proposed cash acquisition would result in an obligation for it to undertake a chain offer for all SPHREIT units as well, in accordance with the Singapore Code on Take-overs and Mergers</li>
<li>The minimum chain offer price shall be the simple average of the daily volume-weighted average traded prices of SPHREIT units, on either the latest 20 trading days, or whatever number of trading days there were within 30 calendar days before the announcement of the possible offer. The chain offer will not be made unless and until the possible scheme becomes effective in accordance with its terms, or – if Cuscaden undertakes the proposed acquisition in another method – is declared effective or unconditional, and/or is completed. Cuscaden's offer for SPH is S$2.10 per share in cash. Cuscaden comprises Hotel Properties, businessman Ong Beng Seng and two Temasek-linked entities – CLA Real Estate Holdings and Mapletree. Its proposal still needs to be accepted by the board of SPH.</li>
</ul>

Singapore
Cuscaden Peak minimum chain offer price for each SPH REIT (SPHREIT SP) unit stands at S$96.4c

The minimum chain offer price, which consortium Cuscaden Peak will have to offer for each SPHREIT if its acquisition bid for Singapore Press Holdings (SPH SP) succeeds is S$96.4c, fully in cash. The consortium had made a surprise rival bid to privatise SPH, following an earlier offer from Keppel Corp (KEP SP). Such an acquisition would take place by way of a scheme of arrangement. Subject to the finalisation of the terms of such a scheme, the completion of Cuscaden's proposed cash acquisition would result in an obligation for it to undertake a chain offer for all SPHREIT units as well, in accordance with the Singapore Code on Take-overs and Mergers
The minimum chain offer price shall be the simple average of the daily volume-weighted average traded prices of SPHREIT units, on either the latest 20 trading days, or whatever number of trading days there were within 30 calendar days before the announcement of the possible offer. The chain offer will not be made unless and until the possible scheme becomes effective in accordance with its terms, or – if Cuscaden undertakes the proposed acquisition in another method – is declared effective or unconditional, and/or is completed. Cuscaden's offer for SPH is S$2.10 per share in cash. Cuscaden comprises Hotel Properties, businessman Ong Beng Seng and two Temasek-linked entities – CLA Real Estate Holdings and Mapletree. Its proposal still needs to be accepted by the board of SPH.


ASEAN Builder's Scoop (2Nov21) - Cuscaden Peak Chain Offer for SPHREIT

<h3><a href="https://www.smartkarma.com/entities/lhn-ltd" target="_blank" data-smartkarma-citation="entities:27234" rel="noopener">LHN Ltd (LHN SP)</a> JV acquires Balestier hotel for S$15m; Another expansion on its Co-living business (BUY; TP S$0.42/share)</h3><p>LHN’s Coliwoo and Four Star have formed a JV to acquire Balestier Hotel for S$15m and intended to run and operate it as a Co-living hotel. Coliwoo will control 40% of the new JV company, while Four Star will control the remaining 60%. The Co-living hotel will operate under Coliwoo brand, a Co-living business that runs more than 800 rooms in Singapore in areas such as Balestier, Boon Lay, and Bukit Timah. Balestier Hotel is at 471 &amp; 473 Balestier Road, and the freehold property has a total GFA of about 10,000sqft. The seller of the hotel is an independent third party. The completion of the transaction is expected to be completed by 22Dec21.</p><p>Comments: This acquisition adds to 320 Balestier Road (acquired in 16Dec20) and 40 &amp; 42 Amber Road (acquired in 9Jun21), as well as acquisitions of 75 Beach Road and 115 Geylang Road, which are expected to add 166 keys to LHN’s Co-living portfolio in FY22E. These 4 projects with S$61.9m total investments should generate 10-20% return to bottom-line upon stabilization from FY23-24E onwards. We continue to like LHN for its efficient space optimization business as well as its expansion in the Co-living business. We reiterate BUY with TP S$0.42/share. LHN is trading at an attractive 4.4x FY21E P/E and ~4.5% yield.</p>

LHN Ltd (LHN SP) JV acquires Balestier hotel for S$15m; Another expansion on its Co-living business (BUY; TP S$0.42/share)LHN’s Coliwoo and Four Star have formed a JV to acquire Balestier Hotel for S$15m and intended to run and operate it as a Co-living hotel. Coliwoo will control 40% of the new JV company, while Four Star will control the remaining 60%. The Co-living hotel will operate under Coliwoo brand, a Co-living business that runs more than 800 rooms in Singapore in areas such as Balestier, Boon Lay, and Bukit Timah. Balestier Hotel is at 471 &amp; 473 Balestier Road, and the freehold property has a total GFA of about 10,000sqft. The seller of the hotel is an independent third party. The completion of the transaction is expected to be completed by 22Dec21.Comments: This acquisition adds to 320 Balestier Road (acquired in 16Dec20) and 40 &amp; 42 Amber Road (acquired in 9Jun21), as well as acquisitions of 75 Beach Road and 115 Geylang Road, which are expected to add 166 keys to LHN’s Co-living portfolio in FY22E. These 4 projects with S$61.9m total investments should generate 10-20% return to bottom-line upon stabilization from FY23-24E onwards. We continue to like LHN for its efficient space optimization business as well as its expansion in the Co-living business. We reiterate BUY with TP S$0.42/share. LHN is trading at an attractive 4.4x FY21E P/E and ~4.5% yield.

<h2>Singapore</h2><h3>Jul 21 new private home sales surge 82% MoM; On track for a record year (since 2013)</h3><ul><li>Sales of new private homes surged in Jul21 with developers selling 1,589 units, up 82% MoM from 872 units in Jun21. On a YoY basis, sales were up 47% from 1,080 units in Jul20. Including ECs sold, developers moved 1,744 new homes last month, 81% higher MoM and 53% higher YoY</li><li>Developers launched 1,104 units in Jul21, up 36% MoM and 27% YoY higher. There were no new ECs launched in Jun21. Jul21 take-up rate was robust at 144% (from 107% in Jun21 and 124% in Jul20). Pasir Ris 8 was the top seller last month, moving 418 units, or 86% of its 487 units, with median price of S$1,624psf</li><li>Sales in Jul21 were driven by Pasir Ris 8, followed by Normanton Park, which sold 125 units, Midwood, which sold 91 units and Sengkang Grand Residences, which sold 89 units. Excluding EC, sales volume in Jul21 was highest in OCR followed by RCR and CCR, respectively. The sales volume was 1,012 (64%), 438 (28%) and 139 (9%) units, respectively</li><li>Almost 50% of sales last month were priced below S$1.5m, 29% were between S$1.5-2m, and 21.5% were above S$2m. The average price paid for a unit last month was S$1.7m. In the first seven months of 2021, developers have sold an estimated 8,004 units. Barring new cooling measures, total new private home sales is on course to exceed 11,000 units (excluding ECs) by the end of 2021, locking in the highest annual new sales figure since 2013, which saw 14,948 new sales.</li></ul>

SingaporeJul 21 new private home sales surge 82% MoM; On track for a record year (since 2013)Sales of new private homes surged in Jul21 with developers selling 1,589 units, up 82% MoM from 872 units in Jun21. On a YoY basis, sales were up 47% from 1,080 units in Jul20. Including ECs sold, developers moved 1,744 new homes last month, 81% higher MoM and 53% higher YoYDevelopers launched 1,104 units in Jul21, up 36% MoM and 27% YoY higher. There were no new ECs launched in Jun21. Jul21 take-up rate was robust at 144% (from 107% in Jun21 and 124% in Jul20). Pasir Ris 8 was the top seller last month, moving 418 units, or 86% of its 487 units, with median price of S$1,624psfSales in Jul21 were driven by Pasir Ris 8, followed by Normanton Park, which sold 125 units, Midwood, which sold 91 units and Sengkang Grand Residences, which sold 89 units. Excluding EC, sales volume in Jul21 was highest in OCR followed by RCR and CCR, respectively. The sales volume was 1,012 (64%), 438 (28%) and 139 (9%) units, respectivelyAlmost 50% of sales last month were priced below S$1.5m, 29% were between S$1.5-2m, and 21.5% were above S$2m. The average price paid for a unit last month was S$1.7m. In the first seven months of 2021, developers have sold an estimated 8,004 units. Barring new cooling measures, total new private home sales is on course to exceed 11,000 units (excluding ECs) by the end of 2021, locking in the highest annual new sales figure since 2013, which saw 14,948 new sales.

Philippines

DoubleDragon Corporation is a Philippine investment management company primarily engaged in real estate development, including retail, office, hospitality, and industrial leasing. The company develops and operates community malls (CityMall), office towers, industrial warehouses (CentralHub), and hotels (Hotel101). It was founded in 2009 and is headquartered in Pasay City, Metro Manila, Philippines.

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DoubleDragon (DD PM)

ASEAN Builder's Scoop (15Feb22) - FEHT Encouraging Signs of Recovery QoQ

LREIT buys remaining JEM stake; RE blockchain Fraxtor obtains CMS license; DD Hotel to expand outside Phils; LLC acquires another plot at TRX City KL

SCCM Asia Research

New Home Sales up 29% YoY in 2021; ISS Voting Against ALLT-EREIT Merger

New home sales up 29% YoY in 2021; ISS voting against ALLT-EREIT merger; DD completes phase 4 warehouse complex; Indo new property tax breaks; SWB...

SCCM Asia Research

ASEAN Builder's Scoop (2Nov21) - Cuscaden Peak Chain Offer for SPHREIT

Cuscaden Peak chain offer for SPHREIT; URA rejects International Plaza's redevelopment plan; DD riding on hospitality tailwinds; DILD 9M21 mktg...

SCCM Asia Research

ASEAN Builder's Scoop (27Sep21)

LHN expands further its Co-living business; FIRT declines to acquire a ROFR asset; DD Hotel 101 Cebu Mactan begins constructions; 2Q21 Phils prop...

SCCM Asia Research

ASEAN Builder's Scoop (17Aug21)

SG new home sales on track for a record year; OHL SG resi >90% sold; FLI supported by resi recovery; FILRT focuses on BPO tenants; NOBLE shifts...

SCCM Asia Research

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