Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

Shinko Electric Industries / Event-Driven

<ul>
<li>JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.</li>
<li>The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.</li>
<li>In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.</li>
</ul>


JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.
The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.
In this insight, we take a look at Quiddity's final predictions for Potential ADDs/DELs for the August 2022 review.


JPX-Nikkei 400 2022 Rebal: Final Predictions

<ul>
<li>Yesterday after the close, <a href="https://www.smartkarma.com/entities/comforia-residential-reit-inc" target="_blank" data-smartkarma-citation="entities:8200:1" rel="noopener">Comforia Residential REIT (3282 JP)</a> ("CRR") announced a follow-on equity offering to fund part of their recently announced property acquisition. </li>
<li>The primary offer quantity is 22,960 units. In addition, there will also be an over-allotment quantity of 1,140 units. The total size of this offering could be roughly ¥7.4bn (~US$64mn). </li>
<li>Below, we take a look at the attractiveness of CRR's latest offering with greater emphasis on the potential for strong post-offering secondary market performance.</li>
</ul>


Yesterday after the close, Comforia Residential REIT (3282 JP) ("CRR") announced a follow-on equity offering to fund part of their recently announced property acquisition. 
The primary offer quantity is 22,960 units. In addition, there will also be an over-allotment quantity of 1,140 units. The total size of this offering could be roughly ¥7.4bn (~US$64mn). 
Below, we take a look at the attractiveness of CRR's latest offering with greater emphasis on the potential for strong post-offering secondary market performance.


Comforia Residential REIT (3282 JP):  Offering Could Trigger Outperformance Vs Comps

Japan Rental Housing Investment / Event-Driven

Japan Rental Housing Investment (8986 JP)

On Friday after market-close, midsize residential JREIT <a href="https://www.smartkarma.com/entities/japan-rental-housing-investment" target="_blank" data-smartkarma-citation="entities:20653:1" rel="noopener">Daiwa Securities Living (8986 JP)</a> (formerly known as "Japan Rental Housing Investment") launched a follow-on equity offerings to partially fund their recent acquisitions. <div>
The primary offer quantity is 70,476 units. In addition, there will also be an over-allotment quantity of 3,524 units. The total size of this offering could be roughly ¥8.5bn (~US$77mn). 
While such offerings are mostly of interest to primary market investors, we also see such offerings as catalysts for strong secondary market performance making these events worth tracking for secondary market investors too. We have previously discussed the historical pre- and post-offering performance of JREITs in <a href="https://www.smartkarma.com/insights/j-reit-offering-primer-get-ready-for-offering-season-2021" target="_blank" data-smartkarma-citation="insights:46416" rel="noopener">J-REIT Offering Primer: Get Ready for Offering Season 2021</a>. On average, J-REITs have historically outperformed the TSEREIT Index in the wake of follow-on equity offerings, with win rates exceeding 80%.
Below is a look at the details of Daiwa Securities Living (DSLIC)'s latest offering and an evaluation of its potential to trigger outperformance against the TSEREIT Index.  
</div>

On Friday after market-close, midsize residential JREIT Daiwa Securities Living (8986 JP) (formerly known as "Japan Rental Housing Investment") launched a follow-on equity offerings to partially fund their recent acquisitions. 
The primary offer quantity is 70,476 units. In addition, there will also be an over-allotment quantity of 3,524 units. The total size of this offering could be roughly ¥8.5bn (~US$77mn). 
While such offerings are mostly of interest to primary market investors, we also see such offerings as catalysts for strong secondary market performance making these events worth tracking for secondary market investors too. We have previously discussed the historical pre- and post-offering performance of JREITs in J-REIT Offering Primer: Get Ready for Offering Season 2021. On average, J-REITs have historically outperformed the TSEREIT Index in the wake of follow-on equity offerings, with win rates exceeding 80%.
Below is a look at the details of Daiwa Securities Living (DSLIC)'s latest offering and an evaluation of its potential to trigger outperformance against the TSEREIT Index.  


Daiwa Securities Living (8986 JP): Offering Could Trigger Outperformance Vs TSEREIT Index

Equity Capital Markets

Samty Residential Investment / Equity Capital Markets

Today after market-close, small-cap residential JREIT <a href="https://www.smartkarma.com/entities/samty-residential-investment" target="_blank" data-smartkarma-citation="entities:31049:1" rel="noopener">Samty Residential Investment (3459 JP)</a> launched a follow-on equity offering (<a href="https://www.samty-residential.com/file/news-4cc7711e97dee5986a62fe2ec3ff5b9eca89d0f2.pdf" target="_blank" rel="noopener">J-only</a>) to fund part of their recent property acquisition.The primary public offer quantity is 57,868 units and there is an over-allotment quantity of 2,893 units. The total size of the public offering could be approximately ¥7.9bn (~US$70mn).In addition to the public offering portion, there will be a third party allocation of 70,339 units which will be allocated for their Sponsor Group <a href="https://www.smartkarma.com/entities/samty-co-ltd" target="_blank" data-smartkarma-citation="entities:18956:1" rel="noopener">Samty Co Ltd (3244 JP)</a> and Daiwa Securities with whom they have a Sponsor Support Agreement. This portion could collectively amount to another ¥9.1bn (~US$83mn). The Offer Price will be determined between 19th July and 27th July 2021 (typically it has been the first day of this window for most JREIT offerings) and the business day following the offer price determination day ("Pricing Date") will be the Application Period. More below the fold.

Today after market-close, small-cap residential JREIT Samty Residential Investment (3459 JP) launched a follow-on equity offering (J-only) to fund part of their recent property acquisition.The primary public offer quantity is 57,868 units and there is an over-allotment quantity of 2,893 units. The total size of the public offering could be approximately ¥7.9bn (~US$70mn).In addition to the public offering portion, there will be a third party allocation of 70,339 units which will be allocated for their Sponsor Group Samty Co Ltd (3244 JP) and Daiwa Securities with whom they have a Sponsor Support Agreement. This portion could collectively amount to another ¥9.1bn (~US$83mn). The Offer Price will be determined between 19th July and 27th July 2021 (typically it has been the first day of this window for most JREIT offerings) and the business day following the offer price determination day ("Pricing Date") will be the Application Period. More below the fold.

JREIT Offering: Samty Residential (3459 JP) - Take It (Vs Comps)

Comforia Residential REIT / Equity Capital Markets

We have a second JREIT Offering within the first two trading days of the year! A few weeks ago, in my insight <a href="https://www.smartkarma.com/insights/j-reit-offering-primer-get-ready-for-offering-season-2021" target="_blank" data-smartkarma-citation="insights:46416" rel="noopener">J-REIT Offering Primer: Get Ready for Offering Season 2021</a> I discussed how January and February will be busy months for JREIT Offerings and I highlighted that <a href="https://www.smartkarma.com/entities/comforia-residential-reit-in" target="_blank" data-smartkarma-citation="entities:8200:1" rel="noopener">Comforia Residential Reit (3282 JP)</a> ("CRR") could be one of earliest candidates to launch an offering in 2021. <blockquote>
SPECIAL MENTION - <a href="https://www.smartkarma.com/entities/comforia-residential-reit-in" target="_blank" data-smartkarma-citation="entities:8200:1" rel="noopener">Comforia Residential Reit (3282 JP)</a>: This J-REIT has announced an equity offering in early-Jan in every year since 2014 and I expect them to be one of the earliest candidates to launch an equity offering in 2021. </blockquote>Today after market-close, CRR announced a <a href="https://www.comforia-reit.co.jp/file/en-news-17c37663552ef1c7dc6da5194b51b8cbd7d3108f.pdf" target="_blank" rel="noopener">follow-on equity offering</a> to partially fund their <a href="https://www.comforia-reit.co.jp/file/en-news-4efe88d4066425a0c98e8096ed7d18e04811c842.pdf" target="_blank" rel="noopener">acquisition of three residential properties</a>. The primary offering quantity is 20,360 units and the over-allotment quantity is 3,650 units. The size of the offering could be around ¥5.7bn (~US$55mn). The Offer Price will be determined between the 13th of January and 18th of January (typically it has been the first day of this window for most JREIT offerings) and the two business days after the price determination day (pricing date) will be the application period.More below the fold.

We have a second JREIT Offering within the first two trading days of the year! A few weeks ago, in my insight J-REIT Offering Primer: Get Ready for Offering Season 2021 I discussed how January and February will be busy months for JREIT Offerings and I highlighted that Comforia Residential Reit (3282 JP) ("CRR") could be one of earliest candidates to launch an offering in 2021. 
SPECIAL MENTION - Comforia Residential Reit (3282 JP): This J-REIT has announced an equity offering in early-Jan in every year since 2014 and I expect them to be one of the earliest candidates to launch an equity offering in 2021. Today after market-close, CRR announced a follow-on equity offering to partially fund their acquisition of three residential properties. The primary offering quantity is 20,360 units and the over-allotment quantity is 3,650 units. The size of the offering could be around ¥5.7bn (~US$55mn). The Offer Price will be determined between the 13th of January and 18th of January (typically it has been the first day of this window for most JREIT offerings) and the two business days after the price determination day (pricing date) will be the application period.More below the fold.

JREIT Offering: Comforia Residential Reit (3282 JP)  - Take It (Vs Comps)

Japan

Japan Rental Housing Investments Inc. is a real estate investment trust (REIT) which invests in securitized real estate products.  The Company mainly invests in residential properties.

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Japan Rental Housing Investment (8986 JP)

JPX-Nikkei 400 2022 Rebal: Final Predictions

I have segmented the JPX Nikkei 400 Potential ADDs and DELs based on conviction levels. The high-conviction ADDs might outperform the high...

Janaghan Jeyakumar, CFA

Comforia Residential REIT (3282 JP): Offering Could Trigger Outperformance Vs Comps

CRR launched a ~US$64mn follow-on public equity offering to fund their recently announced acquisition of six residential properties. This offering...

Janaghan Jeyakumar, CFA

Daiwa Securities Living (8986 JP): Offering Could Trigger Outperformance Vs TSEREIT Index

Mid-size Residential JREIT Daiwa Securities Living (8986 JP) launched a follow-on equity offering which could trigger outperformance vs TSEREIT...

Janaghan Jeyakumar, CFA

JREIT Offering: Samty Residential (3459 JP) - Take It (Vs Comps)

The Samty Residential offering is a small offering on a small REIT with a higher-than-market and higher-than-size-cohort dividend yield. Follow the...

Janaghan Jeyakumar, CFA

JREIT Offering: Comforia Residential Reit (3282 JP) - Take It (Vs Comps)

As I predicted late last year, Comforia has come with an equity offering to fund the purchase of three properties. Buy the Offering as it has...

Janaghan Jeyakumar, CFA

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