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: 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

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/dasin-retail-trust" target="_blank" data-smartkarma-citation="entities:23743" rel="noopener">Dasin Retail Trust (DASIN SP)</a> terminates partnership with ARA Group; Enters into MoU with Sino-Ocean Capital Holding</h3><ul><li>The board of directors of Dasin Retail Trust Management has been informed by Mr. Zhang Zhencheng, Chairman and controlling shareholder of Dasin Retail Trust Management, as well as Aqua Wealth, a controlling unitholder of DASIN, that all relevant parties have agreed to terminate the SPA and will not be proceeding with the proposed transaction under the sales and purchase agreement</li><li>On the other hand, Mr Zhang Zhencheng had entered into a non-binding MOU with Sino-Ocean Capital Holding Limited on 5Jul21 in pursuance of a strategic partnership. Sino-Ocean Capital is a domestic real estate fund management company, and an alternative asset management company in China. Sino-Ocean Capital currently holds ~6.36% of the total issued units in DASIN via its affiliate Glory Class Ventures Limited</li><li>The Sino-Ocean Capital Partnership will involve an acquisition by Sino-Ocean Capital, Glory Class or any affiliate designated by Sino-Ocean Capital of 70.0% of the total issued share capital in Dasin Retail Trust Management from Mr. Zhang Zhencheng. In conjunction with this acquisition, Sino-Ocean Capital may also acquire such number of units in DASIN from Aqua Wealth which, when added to the units in DASIN currently held by Glory Class, will be no less than 25% of the total issued units in DASIN. The terms of the Sino-Ocean Capital Partnership will be subject to the execution of legally binding definitive documents between the parties which is expected to take place in Jul21</li><li>DASIN is also currently seeking to secure the refinancing of the offshore facilities and to that end is working to obtain the approvals for the refinancing from all the banks within the syndicate of lenders, while contemplating other possible solutions, including applying for a further extension.</li></ul>

SingaporeDasin Retail Trust (DASIN SP) terminates partnership with ARA Group; Enters into MoU with Sino-Ocean Capital HoldingThe board of directors of Dasin Retail Trust Management has been informed by Mr. Zhang Zhencheng, Chairman and controlling shareholder of Dasin Retail Trust Management, as well as Aqua Wealth, a controlling unitholder of DASIN, that all relevant parties have agreed to terminate the SPA and will not be proceeding with the proposed transaction under the sales and purchase agreementOn the other hand, Mr Zhang Zhencheng had entered into a non-binding MOU with Sino-Ocean Capital Holding Limited on 5Jul21 in pursuance of a strategic partnership. Sino-Ocean Capital is a domestic real estate fund management company, and an alternative asset management company in China. Sino-Ocean Capital currently holds ~6.36% of the total issued units in DASIN via its affiliate Glory Class Ventures LimitedThe Sino-Ocean Capital Partnership will involve an acquisition by Sino-Ocean Capital, Glory Class or any affiliate designated by Sino-Ocean Capital of 70.0% of the total issued share capital in Dasin Retail Trust Management from Mr. Zhang Zhencheng. In conjunction with this acquisition, Sino-Ocean Capital may also acquire such number of units in DASIN from Aqua Wealth which, when added to the units in DASIN currently held by Glory Class, will be no less than 25% of the total issued units in DASIN. The terms of the Sino-Ocean Capital Partnership will be subject to the execution of legally binding definitive documents between the parties which is expected to take place in Jul21DASIN is also currently seeking to secure the refinancing of the offshore facilities and to that end is working to obtain the approvals for the refinancing from all the banks within the syndicate of lenders, while contemplating other possible solutions, including applying for a further extension.

ASEAN Builder's Scoop (6Jul21) - DASIN Terminates ARA Partnership

<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: 141.25pt;"> </td><td style="width: 141.2pt;">PRIME (US$)</td><td style="width: 141.2pt;">KORE (US$)</td><td style="width: 141.2pt;">MUST (US$)</td></tr><tr><td style="width: 141.25pt;">Period</td><td style="width: 141.2pt;">1Q21</td><td style="width: 141.2pt;">1Q21</td><td style="width: 141.2pt;">1Q21</td></tr><tr><td style="width: 141.25pt;">Gross Revenue (S$ m)</td><td style="width: 141.2pt;">35.9 (+2.5% YoY)</td><td style="width: 141.2pt;">34.6 (-2.1% YoY)</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">NPI (S$ m)</td><td style="width: 141.2pt;">23.0 (-2.0% YoY)</td><td style="width: 141.2pt;">20.4 (-2.8% YoY)</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">DPU (S$ c)</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">NAV per Unit (S$)</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">Not Disclosed</td><td style="width: 141.2pt;">0.730</td></tr><tr><td style="width: 141.25pt;">P/B (x)</td><td style="width: 141.2pt;">0.99(Based on 4Q20 NAV)</td><td style="width: 141.2pt;">0.90 (Based on 4Q20 NAV)</td><td style="width: 141.2pt;">1.030 (Based on 4Q20 NAV)</td></tr><tr><td style="width: 141.25pt;">Occupancy (%)</td><td style="width: 141.2pt;">91.7</td><td style="width: 141.2pt;">91.6</td><td style="width: 141.2pt;">92.0</td></tr><tr><td style="width: 141.25pt;">Reversion (%)</td><td style="width: 141.2pt;">8.5</td><td style="width: 141.2pt;">5.7</td><td style="width: 141.2pt;">2.1</td></tr><tr><td style="width: 141.25pt;">Gearing (%)</td><td style="width: 141.2pt;">33.6</td><td style="width: 141.2pt;">37.5</td><td style="width: 141.2pt;">41.3</td></tr><tr><td style="width: 141.25pt;">Cost of Debt (%)</td><td style="width: 141.2pt;">2.8</td><td style="width: 141.2pt;">2.82</td><td style="width: 141.2pt;">3.18</td></tr><tr><td style="width: 141.25pt;">1 Yr Fwd Yield (%)</td><td style="width: 141.2pt;">8.24</td><td style="width: 141.2pt;">8.3</td><td style="width: 141.2pt;">8.00</td></tr><tr><td style="width: 141.25pt;">Debt Hedged (%)</td><td style="width: 141.2pt;">90.0</td><td style="width: 141.2pt;">84.7</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">Target Price</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td></tr><tr><td style="width: 141.25pt;">Rating</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td><td style="width: 141.2pt;">NA</td></tr></tbody></table><h3><a href="https://www.smartkarma.com/entities/prime-us-reit" target="_blank" data-smartkarma-citation="entities:28144" rel="noopener">Prime US REIT (PRIME SP)</a> 1Q21 Business Update – Robust operations metrics; Trading at an attractive 8+% USD yield  </h3><ul><li>1Q21 revenue and NPI came in +2.5% YoY and -2.0% YoY, respectively, to US$35.9m (25.2% BB est) and US$23.5m (26.7% BB est). 1Q21 DI came in -1.2% YoY at US$17.6m, which benefitted from lower interest cost. 1Q21 DPU was undisclosed</li><li>Leasing momentum remained robust with a positive rental reversion of +8.5% in 1Q21 (vs +8.7% in 4Q20 and +8.9% in 3Q20). Focusing on long-term leases – 57,647sqft of long-term leases were executed in 1Q21 at a rental reversion of +9.5%. Below-market portfolio in place rents (by 6.5%) also provide a buffer for rental reversion potential</li><li>Overall portfolio committed occupancy fell to 91.7% in 1Q21 (vs. 92.4% in 4Q20 and 92.6% in 3Q20). PRIME has ~100% of cash rental income with built-in rental escalations averaging over +2% pa. Portfolio occupancy still well above Class-A office average of 84.3%. Rent collections remained robust at 99% with minimal rent concessions. Portfolio WALE stood at 4.3%</li><li>Portfolio gearing stands at 33.8% (vs. 33.5% in 4Q20 and 32.7% in 3Q20) with average cost of debt of 2.8% pa. (vs. 2.7% in 4Q20 and 2.7% in 3Q20) and 90.0% of debt hedged</li><li>PRIME currently trades at 8.24% FY21E yield and 0.99x P/B.</li></ul>

SingaporeSREITs results in a glance (see detailed spreadsheet and calendar attached) PRIME (US$)KORE (US$)MUST (US$)Period1Q211Q211Q21Gross Revenue (S$ m)35.9 (+2.5% YoY)34.6 (-2.1% YoY)NANPI (S$ m)23.0 (-2.0% YoY)20.4 (-2.8% YoY)NADPU (S$ c)Not DisclosedNot DisclosedNANAV per Unit (S$)Not DisclosedNot Disclosed0.730P/B (x)0.99(Based on 4Q20 NAV)0.90 (Based on 4Q20 NAV)1.030 (Based on 4Q20 NAV)Occupancy (%)91.791.692.0Reversion (%)8.55.72.1Gearing (%)33.637.541.3Cost of Debt (%)2.82.823.181 Yr Fwd Yield (%)8.248.38.00Debt Hedged (%)90.084.7NATarget PriceNANANARatingNANANAPrime US REIT (PRIME SP) 1Q21 Business Update – Robust operations metrics; Trading at an attractive 8+% USD yield  1Q21 revenue and NPI came in +2.5% YoY and -2.0% YoY, respectively, to US$35.9m (25.2% BB est) and US$23.5m (26.7% BB est). 1Q21 DI came in -1.2% YoY at US$17.6m, which benefitted from lower interest cost. 1Q21 DPU was undisclosedLeasing momentum remained robust with a positive rental reversion of +8.5% in 1Q21 (vs +8.7% in 4Q20 and +8.9% in 3Q20). Focusing on long-term leases – 57,647sqft of long-term leases were executed in 1Q21 at a rental reversion of +9.5%. Below-market portfolio in place rents (by 6.5%) also provide a buffer for rental reversion potentialOverall portfolio committed occupancy fell to 91.7% in 1Q21 (vs. 92.4% in 4Q20 and 92.6% in 3Q20). PRIME has ~100% of cash rental income with built-in rental escalations averaging over +2% pa. Portfolio occupancy still well above Class-A office average of 84.3%. Rent collections remained robust at 99% with minimal rent concessions. Portfolio WALE stood at 4.3%Portfolio gearing stands at 33.8% (vs. 33.5% in 4Q20 and 32.7% in 3Q20) with average cost of debt of 2.8% pa. (vs. 2.7% in 4Q20 and 2.7% in 3Q20) and 90.0% of debt hedgedPRIME currently trades at 8.24% FY21E yield and 0.99x P/B.

ASEAN Builder's Scoop (19May21) - PRIME robust operations metrics

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/mapletree-commercial-trust" target="_blank" data-smartkarma-citation="entities:106" rel="noopener">Mapletree Commercial Trust (MCT SP)</a> to provide more tenant support amid stricter Covid-19 measures</h3>MCT said it is committed to providing the necessary rental and operating assistance to its retail tenants as Singapore tightens its Covid-19 measures till 13Jun. Since the start of the pandemic, MCT has implemented support packages comprising more than S$70m of rental rebates to help eligible retail tenants offset, on average, more than four months of fixed rent. This includes the passing on of property tax rebates, cash grants from the government and other mandated grants to qualifying tenants. MCT's properties have implemented health and safety protocols.Comments: Rental rebates are likely returning as F&amp;B tenants grapple with no-dining-in restrictions for ~1mo. We understand few tenants at Paragon have already requested for assistance but SPHREIT is still reviewing. We will keep track for every landlord’s decision and report accordingly.

SingaporeMapletree Commercial Trust (MCT SP) to provide more tenant support amid stricter Covid-19 measuresMCT said it is committed to providing the necessary rental and operating assistance to its retail tenants as Singapore tightens its Covid-19 measures till 13Jun. Since the start of the pandemic, MCT has implemented support packages comprising more than S$70m of rental rebates to help eligible retail tenants offset, on average, more than four months of fixed rent. This includes the passing on of property tax rebates, cash grants from the government and other mandated grants to qualifying tenants. MCT's properties have implemented health and safety protocols.Comments: Rental rebates are likely returning as F&amp;B tenants grapple with no-dining-in restrictions for ~1mo. We understand few tenants at Paragon have already requested for assistance but SPHREIT is still reviewing. We will keep track for every landlord’s decision and report accordingly.

ASEAN Builder's Scoop (17May21) - MCT to provide more tenant supports

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/frasers-centrepoint-trust" target="_blank" data-smartkarma-citation="entities:2870" rel="noopener">Frasers Centrepoint Trust (FCT SP)</a> to sell YewTee Point for S$220m; 75% upside from original purchase price</h3>FCT will divest YewTee Point for S$220m, having entered into a sale-and-purchase agreement with an unrelated third party. The transaction is expected to be completed on 28May21. The sales proceed will be used to repay debts and lower gearing level. The Choa Chu Kang mall was valued at S$200m by Savills as at 31Jan21. On a pro-forma FY20 (Sep20) basis, the DPU dilution is 2.33% and NAV would rise by 0.8%. The divestment is in line with the manager’s proactive portfolio management strategy to optimise the trust's portfolio composition. Upon completion of the divestment, FCT's retail portfolio will comprise nine retail properties, all located in the suburbs of Singapore.Comments: The S$220m offer price is ~16% higher than the latest book value (as at end FY20) and translates to S$2,986psf (based on NLA). It also represents a significant 75% upside from purchase price of S$125.7m in 2010.

SingaporeFrasers Centrepoint Trust (FCT SP) to sell YewTee Point for S$220m; 75% upside from original purchase priceFCT will divest YewTee Point for S$220m, having entered into a sale-and-purchase agreement with an unrelated third party. The transaction is expected to be completed on 28May21. The sales proceed will be used to repay debts and lower gearing level. The Choa Chu Kang mall was valued at S$200m by Savills as at 31Jan21. On a pro-forma FY20 (Sep20) basis, the DPU dilution is 2.33% and NAV would rise by 0.8%. The divestment is in line with the manager’s proactive portfolio management strategy to optimise the trust's portfolio composition. Upon completion of the divestment, FCT's retail portfolio will comprise nine retail properties, all located in the suburbs of Singapore.Comments: The S$220m offer price is ~16% higher than the latest book value (as at end FY20) and translates to S$2,986psf (based on NLA). It also represents a significant 75% upside from purchase price of S$125.7m in 2010.

ASEAN Builder's Scoop - FCT to Sell YewTee Point; Activists at SSREIT Asked ESR to Buy Assets

Singapore

Frasers Centrepoint Trust is a retail real estate investment trust focused on growing unitholder value through asset management, financial management and strategic investments.  The trust invests in retail properties in Singapore and overseas.

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Frasers Centrepoint Trust (FCT SP)

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ASEAN Builder's Scoop (17May21) - MCT to provide more tenant supports

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ASEAN Builder's Scoop - FCT to Sell YewTee Point; Activists at SSREIT Asked ESR to Buy Assets

Activists at SSREIT asked ESR to buy its assets; GLL to be acquired and delisted; Sheng Tai-IWG expands workspace in Melaka

SCCM Asia Research

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