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><a href="https://www.smartkarma.com/entities/esr-reit" target="_blank" data-smartkarma-citation="entities:10934" rel="noopener">ESR-REIT (EREIT SP)</a> to divest non-core industrial building for S$11.1m; 8% premium to book value (BUY; TP S$0.48/unit)</h3><ul><li>EREIT has entered into an agreement to divest an industrial building, 45 Changi South Avenue 2, for S$11.1m, a 7.8% premium to the property's independent valuation of S$10.3m</li><li>The net proceeds will be used to repay outstanding borrowings, finance upcoming asset enhancements and/or fund general working capital requirements. The divestment represents an opportunity for EREIT to divest one of their non-core assets at a premium to book value</li><li>The four-storey general industrial building has a GFA of 73,684sqft.</li></ul>Comments: Following the divestment of two assets in Apr21, EREIT continued to review its portfolio and divesting non-core assets. The multi-tenanted general industrial building contributed S$0.5m (or 0.2%) to EREIT’s FY20 Revenue and accounts for 0.7% of FY20 NAV. Assuming a 71.4% NPI margin (based on FY20 NPI Margin), the divestment yield would be 3.22%. The capital recycled into AEIs would lift future DPU (expected to return yield to cost of c.7-9%), if not maintained, should the proceeds are used to pare down debt (avg. cost of debt of 3.24%). The Sale Consideration also represents 33.7% higher than its purchase price of S$8.3m (acquired in 25Jul06). We have a BUY rating with TP of S$0.48/Unit.

SingaporeESR-REIT (EREIT SP) to divest non-core industrial building for S$11.1m; 8% premium to book value (BUY; TP S$0.48/unit)EREIT has entered into an agreement to divest an industrial building, 45 Changi South Avenue 2, for S$11.1m, a 7.8% premium to the property's independent valuation of S$10.3mThe net proceeds will be used to repay outstanding borrowings, finance upcoming asset enhancements and/or fund general working capital requirements. The divestment represents an opportunity for EREIT to divest one of their non-core assets at a premium to book valueThe four-storey general industrial building has a GFA of 73,684sqft.Comments: Following the divestment of two assets in Apr21, EREIT continued to review its portfolio and divesting non-core assets. The multi-tenanted general industrial building contributed S$0.5m (or 0.2%) to EREIT’s FY20 Revenue and accounts for 0.7% of FY20 NAV. Assuming a 71.4% NPI margin (based on FY20 NPI Margin), the divestment yield would be 3.22%. The capital recycled into AEIs would lift future DPU (expected to return yield to cost of c.7-9%), if not maintained, should the proceeds are used to pare down debt (avg. cost of debt of 3.24%). The Sale Consideration also represents 33.7% higher than its purchase price of S$8.3m (acquired in 25Jul06). We have a BUY rating with TP of S$0.48/Unit.

<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>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%).<h3>Residential property volume, prices could continue rising for the rest of 2021</h3>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.

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>SREITs results in a glance (see detailed spreadsheet and calendar attached)</h3>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
 
</td>
<td style="width: 136.6pt; height: 14.8pt;">
ECWREIT
</td>
<td style="width: 136.6pt; height: 14.8pt;">
DASIN
</td>
<td style="width: 136.6pt; height: 14.8pt;">
LREIT
</td>
<td style="width: 136.6pt; height: 14.8pt;">
IREIT (€)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 15.3pt;">
Period
</td>
<td style="width: 136.6pt; height: 15.3pt;">
2Q21
</td>
<td style="width: 136.6pt; height: 15.3pt;">
1H21
</td>
<td style="width: 136.6pt; height: 15.3pt;">
2H21
</td>
<td style="width: 136.6pt; height: 15.3pt;">
1H21
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 15.35pt;">
Gross Revenue (S$m)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
31.2 (10.6% YoY)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
51.3 (38.5% YoY)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
37 (+8.5%YoY)
</td>
<td style="width: 136.6pt; height: 15.35pt;">
23.6 (+31.6% YoY)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
NPI (S$m)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
27.9 (8.1% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
38.2 (26.3% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
26.5 (+10% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
19.3 (+23.4% YoY)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
DPU (S$ c)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.532 (10.5% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
2.98 (55.2% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
2.34 (+32.8% YoY)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.43 (+14.4% YoY)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
NAV per Unit (S$)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.93
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.46
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.79
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.5
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
P/B (x)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.88
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.34
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.08
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.81
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Occupancy (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
99.1
</td>
<td style="width: 136.6pt; height: 14.8pt;">
95.7
</td>
<td style="width: 136.6pt; height: 14.8pt;">
99.8 (Overall portfolio)
99.2 (313@Somerset)
100 (Sky Complex)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
95.9 (Overall)
99.8 (Germany)
85.2 (Spanish)
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 7.4pt;">
Reversion (%)
</td>
<td style="width: 136.6pt; height: 7.4pt;">
N/A
</td>
<td style="width: 136.6pt; height: 7.4pt;">
N/A
</td>
<td style="width: 136.6pt; height: 7.4pt;">
NA
</td>
<td style="width: 136.6pt; height: 7.4pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Gearing (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
37.6
</td>
<td style="width: 136.6pt; height: 14.8pt;">
36.7
</td>
<td style="width: 136.6pt; height: 14.8pt;">
32
</td>
<td style="width: 136.6pt; height: 14.8pt;">
33.3
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Cost of Debt (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
4.2
</td>
<td style="width: 136.6pt; height: 14.8pt;">
N/A
</td>
<td style="width: 136.6pt; height: 14.8pt;">
0.88
</td>
<td style="width: 136.6pt; height: 14.8pt;">
1.8
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
1 Yr Fwd Yield (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
7.36
</td>
<td style="width: 136.6pt; height: 14.8pt;">
9.59
</td>
<td style="width: 136.6pt; height: 14.8pt;">
5.78
</td>
<td style="width: 136.6pt; height: 14.8pt;">
6.67
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Debt Hedged (%)
</td>
<td style="width: 136.6pt; height: 14.8pt;">
100% of offshore facilities
</td>
<td style="width: 136.6pt; height: 14.8pt;">
N/A
</td>
<td style="width: 136.6pt; height: 14.8pt;">
Not Disclosed
</td>
<td style="width: 136.6pt; height: 14.8pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 14.8pt;">
Target Price
</td>
<td style="width: 136.6pt; height: 14.8pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 14.8pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 14.8pt;">
NA
</td>
<td style="width: 136.6pt; height: 14.8pt;">
NA
</td>
</tr>
<tr>
<td style="width: 136.65pt; height: 15.3pt;">
Rating
</td>
<td style="width: 136.6pt; height: 15.3pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 15.3pt;">
Under Review
</td>
<td style="width: 136.6pt; height: 15.3pt;">
NA
</td>
<td style="width: 136.6pt; height: 15.3pt;">
NA
</td>
</tr>
</tbody>
</table>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


ECWREIT


DASIN


LREIT


IREIT (€)




Period


2Q21


1H21


2H21


1H21




Gross Revenue (S$m)


31.2 (10.6% YoY)


51.3 (38.5% YoY)


37 (+8.5%YoY)


23.6 (+31.6% YoY)




NPI (S$m)


27.9 (8.1% YoY)


38.2 (26.3% YoY)


26.5 (+10% YoY)


19.3 (+23.4% YoY)




DPU (S$ c)


1.532 (10.5% YoY)


2.98 (55.2% YoY)


2.34 (+32.8% YoY)


1.43 (+14.4% YoY)




NAV per Unit (S$)


0.93


1.46


0.79


0.5




P/B (x)


0.88


0.34


1.08


0.81




Occupancy (%)


99.1


95.7


99.8 (Overall portfolio)
99.2 (313@Somerset)
100 (Sky Complex)


95.9 (Overall)
99.8 (Germany)
85.2 (Spanish)




Reversion (%)


N/A


N/A


NA


NA




Gearing (%)


37.6


36.7


32


33.3




Cost of Debt (%)


4.2


N/A


0.88


1.8




1 Yr Fwd Yield (%)


7.36


9.59


5.78


6.67




Debt Hedged (%)


100% of offshore facilities


N/A


Not Disclosed


NA




Target Price


Under Review


Under Review


NA


NA




Rating


Under Review


Under Review


NA


NA





ASEAN Builder's Scoop (10Aug21) - ECWREIT Steady as She Goes

<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: 241.969px;"> </td><td style="width: 241.969px;">CLCT</td><td style="width: 242.062px;">AIT</td></tr><tr><td style="width: 241.969px;">Period</td><td style="width: 241.969px;">1H21</td><td style="width: 242.062px;">1H21</td></tr><tr><td style="width: 241.969px;">Gross Revenue (S$m)</td><td style="width: 241.969px;">176.9 (74.2% YoY)</td><td style="width: 242.062px;">95.4 (-4% YoY)</td></tr><tr><td style="width: 241.969px;">NPI (S$m)</td><td style="width: 241.969px;">120.3 (84.4% YoY)</td><td style="width: 242.062px;">77.3 (+5% YoY)</td></tr><tr><td style="width: 241.969px;">DPU (S$ c)</td><td style="width: 241.969px;">4.23 (40.1% YoY)</td><td style="width: 242.062px;">0.042 (-9% YoY)</td></tr><tr><td style="width: 241.969px;">NAV per Unit (S$)</td><td style="width: 241.969px;">1.57</td><td style="width: 242.062px;">1.1</td></tr><tr><td style="width: 241.969px;">P/B (x)</td><td style="width: 241.969px;">0.86</td><td style="width: 242.062px;">1.32</td></tr><tr><td style="width: 241.969px;">Occupancy (%)</td><td style="width: 241.969px;">95.4 (Retail)94.0 (Business Park)</td><td style="width: 242.062px;">90</td></tr><tr><td style="width: 241.969px;">Reversion (%)</td><td style="width: 241.969px;">-2.1 (Retail)+6.7 (Business Park)</td><td style="width: 242.062px;">+8 (Bangalore)+12 (Chennai)+7-16% (Hyderabad)+21 (Pune)</td></tr><tr><td style="width: 241.969px;">Gearing (%)</td><td style="width: 241.969px;">35.9</td><td style="width: 242.062px;">33</td></tr><tr><td style="width: 241.969px;">Cost of Debt (%)</td><td style="width: 241.969px;">2.57</td><td style="width: 242.062px;">5.3</td></tr><tr><td style="width: 241.969px;">1 Yr Fwd Yield (%)</td><td style="width: 241.969px;">6.67</td><td style="width: 242.062px;">6.41</td></tr><tr><td style="width: 241.969px;">Debt Hedged (%)</td><td style="width: 241.969px;">78</td><td style="width: 242.062px;">77</td></tr><tr><td style="width: 241.969px;">Target Price</td><td style="width: 241.969px;">N/A</td><td style="width: 242.062px;">N/A</td></tr><tr><td style="width: 241.969px;">Rating</td><td style="width: 241.969px;">N/A</td><td style="width: 242.062px;">N/A</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) CLCTAITPeriod1H211H21Gross Revenue (S$m)176.9 (74.2% YoY)95.4 (-4% YoY)NPI (S$m)120.3 (84.4% YoY)77.3 (+5% YoY)DPU (S$ c)4.23 (40.1% YoY)0.042 (-9% YoY)NAV per Unit (S$)1.571.1P/B (x)0.861.32Occupancy (%)95.4 (Retail)94.0 (Business Park)90Reversion (%)-2.1 (Retail)+6.7 (Business Park)+8 (Bangalore)+12 (Chennai)+7-16% (Hyderabad)+21 (Pune)Gearing (%)35.933Cost of Debt (%)2.575.31 Yr Fwd Yield (%)6.676.41Debt Hedged (%)7877Target PriceN/AN/ARatingN/AN/A

ASEAN Builder's Scoop (29Jul21) - CLCT Consecutive Quarterly Improvements

<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: 242.047px;"> </td><td style="width: 241.969px;">FCT</td><td style="width: 241.984px;">EREIT</td></tr><tr><td style="width: 242.047px;">Period</td><td style="width: 241.969px;">3Q21</td><td style="width: 241.984px;">2Q21</td></tr><tr><td style="width: 242.047px;">Gross Revenue (S$ m)</td><td style="width: 241.969px;">Not Disclosed</td><td style="width: 241.984px;">59.5 (+6.25% YoY)</td></tr><tr><td style="width: 242.047px;">NPI (S$ m)</td><td style="width: 241.969px;">Not Disclosed</td><td style="width: 241.984px;">42.9 (+9.4% YoY)</td></tr><tr><td style="width: 242.047px;">DPU (S$ c)</td><td style="width: 241.969px;">Not Disclosed</td><td style="width: 241.984px;">0.754 (13.9% YoY)</td></tr><tr><td style="width: 242.047px;">NAV per Unit (S$)</td><td style="width: 241.969px;">2.31 (Based on 1H21 NAV)</td><td style="width: 241.984px;">0.398</td></tr><tr><td style="width: 242.047px;">P/B (x)</td><td style="width: 241.969px;">1.04 (Based on 1H21 NAV)</td><td style="width: 241.984px;">1.1</td></tr><tr><td style="width: 242.047px;">Occupancy (%)</td><td style="width: 241.969px;">96.4</td><td style="width: 241.984px;">91.7</td></tr><tr><td style="width: 242.047px;">Reversion (%)</td><td style="width: 241.969px;">Not Disclosed</td><td style="width: 241.984px;">-0.2</td></tr><tr><td style="width: 242.047px;">Gearing (%)</td><td style="width: 241.969px;">33.9</td><td style="width: 241.984px;">42.9</td></tr><tr><td style="width: 242.047px;">Cost of Debt (%)</td><td style="width: 241.969px;">2.2</td><td style="width: 241.984px;">3.24</td></tr><tr><td style="width: 242.047px;">1 Yr Fwd Yield (%)</td><td style="width: 241.969px;">5.02</td><td style="width: 241.984px;">7.05</td></tr><tr><td style="width: 242.047px;">Debt Hedged (%)</td><td style="width: 241.969px;">59</td><td style="width: 241.984px;">75</td></tr><tr><td style="width: 242.047px;">Target Price</td><td style="width: 241.969px;">S$2.89</td><td style="width: 241.984px;">N/A</td></tr><tr><td style="width: 242.047px;">Rating</td><td style="width: 241.969px;">BUY</td><td style="width: 241.984px;">Under Review</td></tr></tbody></table>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) FCTEREITPeriod3Q212Q21Gross Revenue (S$ m)Not Disclosed59.5 (+6.25% YoY)NPI (S$ m)Not Disclosed42.9 (+9.4% YoY)DPU (S$ c)Not Disclosed0.754 (13.9% YoY)NAV per Unit (S$)2.31 (Based on 1H21 NAV)0.398P/B (x)1.04 (Based on 1H21 NAV)1.1Occupancy (%)96.491.7Reversion (%)Not Disclosed-0.2Gearing (%)33.942.9Cost of Debt (%)2.23.241 Yr Fwd Yield (%)5.027.05Debt Hedged (%)5975Target PriceS$2.89N/ARatingBUYUnder Review

ASEAN Builder's Scoop (23Jul21) - FCT Resilient Amidst Phase-2 Setback

Singapore

ESR-REIT is a real estate investment trust that invests in and manages a diversified portfolio of income-producing industrial properties. These properties include logistics, high-specifications industrial, business parks, and general industrial assets across Singapore, Australia, and Japan. The company is headquartered in Singapore and was founded in 2006.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

ESR-REIT (EREIT SP)

ASEAN Builder's Scoop (31Aug21)

EREIT non-core divestment continues; Park Hotel group losses CQ hotel mgmt; Mapletree expands UK student accommodation assets; AREIT growing AUM;...

SCCM Asia Research

ASEAN Builder's Scoop (24Aug21)

AAREIT issues S$250m perps; SG resi prices, volume continue rising; RCR offers IPO at 8% premium to NAV; CLI raises stake in reclamation firm MMDC;...

SCCM Asia Research

ASEAN Builder's Scoop (10Aug21) - ECWREIT Steady as She Goes

ECWREIT steady as she goes; DASIN boosted by acquisitions; LREIT robust occupancy levels; IREIT dual-currency trading; FPL well-positioned for...

SCCM Asia Research

ASEAN Builder's Scoop (29Jul21) - CLCT Consecutive Quarterly Improvements

CLCT consecutive quarterly improvements; AIT healthy collections, robust reversions; EREIT unvexed by Phase 2; Phils remaining tax reforms still...

SCCM Asia Research

ASEAN Builder's Scoop (23Jul21) - FCT Resilient Amidst Phase-2 Setback

FCT resilient amidst phase-2 setback; EREIT operations remain healthy; SSREIT removing syariah compliance; 2Q21 Industrial rents, prices up; APLN...

SCCM Asia Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)