ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

<ul>
<li>The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.</li>
<li>The pasy week in insights on <a href="https://www.smartkarma.com/entities/bfi-finance-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:8447:1" rel="noopener">BFI Finance Indonesia</a> following the news that Jerry Ng of <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago</a> will take a controlling stake plus an update on microlender <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat</a>.</li>
<li>We also look at OVO's destiny, food delivery, and explore why Buy Now Pay Later is different in South East Asia plus the rising importance of ESG for Indonesian investors.</li>
</ul>


The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity bottom-up, from across South East Asia.
The pasy week in insights on BFI Finance Indonesia following the news that Jerry Ng of Bank Jago will take a controlling stake plus an update on microlender Bank Rakyat.
We also look at OVO's destiny, food delivery, and explore why Buy Now Pay Later is different in South East Asia plus the rising importance of ESG for Indonesian investors.


The Week That Was in ASEAN@Smartkarma - Bank Rakyat Indonesia, Buy Now Pay Later, and BFI Finance

Forensic Analyst

Jason Yap, CFA

Equity Bottom-Up

<ul>
<li>Singapore government introduced a moratorium on new data centres in 2019</li>
<li>As result, incumbent data centre REITs recalibrated their portfolio strategy including to pursue DPU and NAV growth through accretive overseas acquisitions </li>
<li>In Q2 2022, the moratorium is expected to be lifted with conditional approvals for applicants that meet certain sustainability requirements. We discuss the implications for <a href="https://www.smartkarma.com/entities/keppel-dc-reit" target="_blank" data-smartkarma-citation="entities:85:1" rel="noopener">Keppel DC REIT (KDCREIT SP)</a> </li>
</ul>


Singapore government introduced a moratorium on new data centres in 2019
As result, incumbent data centre REITs recalibrated their portfolio strategy including to pursue DPU and NAV growth through accretive overseas acquisitions 
In Q2 2022, the moratorium is expected to be lifted with conditional approvals for applicants that meet certain sustainability requirements. We discuss the implications for Keppel DC REIT (KDCREIT SP) 


Keppel DC REIT (KDCREIT SP) - Imminent Lifting of SG Data Centre Moratorium and Its Implications

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)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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 <img src='https://api2.sgx.com/sites/default/files/2022-01/Capture_15.PNG' alt='Keppel Group of S-REITs – Summary of Full Year Results' />
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 <div class='content-caption'>Keppel Group of S-REITs – Summary of Full Year Results</div>
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As at last Friday (Jan 28), 12 S-Reits have reported their full year financial results for the period ended Dec 31, 2021.

The majority reported a year-on-year (yoy) increase in full year distribution per unit (DPU). 
Among them, all three S-REITs under the Keppel Group - Keppel DC REIT, Keppel REIT and Keppel Pacific Oak US REIT - have announced their full year 2021 financial results last week. 
Keppel DC Reit (KDCReit) declared a DPU of 9.851 Singapore cents for FY 2021, a 7.4 per cent increase from 9.170 cents in FY 2020.

This was on the back of a 9.4 per cent y-o-y increase in FY 2021 distributable income, supported by contributions from new data centre acquisitions in Germany, the Netherlands and Australia, as well as the completion of asset enhancement initiatives in Dublin and Singapore.

Looking ahead, the Reit noted that it may also look to potentially acquire assets from its sponsor and Keppel's private data centre fund, which have more than S$2 billion of assets under management and development. 
Keppel Reit declared full year FY2021 DPU of 5.82 Singapore cents, representing an increase of 1.6 per cent year on year.

The Reit noted that the growth in distribution was due mainly to full-year contribution from Victoria Police Centre and Pinnacle Office Park, in Australia, which were added to the portfolio in FY 2020, as well as Keppel Bay Tower, in Singapore, which was acquired in May 2021.

However, the increase was partially offset by the impact of the divestment of 275 George Street, Australia, in July 2021 and lower occupancies in some buildings.

Keppel Pacific Oak US Reit's (KORE) FY 2021 distributable income increased 6.5 per cent year on year, bringing its full year DPU to 6.34 US cents, an increase of 1.8 per cent year on year.

KORE attributed its stronger performance to several factors, including contributions from new acquisitions during the year, as well as positive rental reversions and built-in annual rental escalations across the portfolio.

All three S-Reits under the Keppel Group have made commitments to maintain a sustainable portfolio, guided by the 3 key themes under their sustainability framework - environmental stewardship, responsible business, and people and community.

In particular, KDCReit aims to introduce renewable energy to at least 50 per cent of its colocation assets by 2030, as well as encourage the use of renewable energy at all other portfolio assets.

Keppel Reit 's Keppel Bay Tower, 8 Exhibition Street and Victoria Police Centre are already fully powered by renewable energy while its 8 Exhibition Street asset has achieved carbon neutrality.

All 3 S-Reits also target to achieve at least 20 hours of training hours per employee and contribute to Keppel Capital's target of more than 500 hours of staff volunteerism in 2022.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/real-estate/keppel-groups-s-reits-average-36-dpu-growth-for-fy2021"> read</a><a href="https://www.businesstimes.com.sg/companies-markets/full-steam-ahead-for-s-reits-earnings-season"> </a>the original version.
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    Keppel Group of S-REITs – Summary of Full Year Results


As at last Friday (Jan 28), 12 S-Reits have reported their full year financial results for the period ended Dec 31, 2021.

The majority reported a year-on-year (yoy) increase in full year distribution per unit (DPU).  
Among them, all three S-REITs under the Keppel Group - Keppel DC REIT, Keppel REIT and Keppel Pacific Oak US REIT - have announced their full year 2021 financial results last week.  
Keppel DC Reit (KDCReit) declared a DPU of 9.851 Singapore cents for FY 2021, a 7.4 per cent increase from 9.170 cents in FY 2020.

This was on the back of a 9.4 per cent y-o-y increase in FY 2021 distributable income, supported by contributions from new data centre acquisitions in Germany, the Netherlands and Australia, as well as the completion of asset enhancement initiatives in Dublin and Singapore.

Looking ahead, the Reit noted that it may also look to potentially acquire assets from its sponsor and Keppel's private data centre fund, which have more than S$2 billion of assets under management and development.  
Keppel Reit declared full year FY2021 DPU of 5.82 Singapore cents, representing an increase of 1.6 per cent year on year.

The Reit noted that the growth in distribution was due mainly to full-year contribution from Victoria Police Centre and Pinnacle Office Park, in Australia, which were added to the portfolio in FY 2020, as well as Keppel Bay Tower, in Singapore, which was acquired in May 2021.

However, the increase was partially offset by the impact of the divestment of 275 George Street, Australia, in July 2021 and lower occupancies in some buildings.

Keppel Pacific Oak US Reit's (KORE) FY 2021 distributable income increased 6.5 per cent year on year, bringing its full year DPU to 6.34 US cents, an increase of 1.8 per cent year on year.

KORE attributed its stronger performance to several factors, including contributions from new acquisitions during the year, as well as positive rental reversions and built-in annual rental escalations across the portfolio.

All three S-Reits under the Keppel Group have made commitments to maintain a sustainable portfolio, guided by the 3 key themes under their sustainability framework - environmental stewardship, responsible business, and people and community.

In particular, KDCReit aims to introduce renewable energy to at least 50 per cent of its colocation assets by 2030, as well as encourage the use of renewable energy at all other portfolio assets.

Keppel Reit 's Keppel Bay Tower, 8 Exhibition Street and Victoria Police Centre are already fully powered by renewable energy while its 8 Exhibition Street asset has achieved carbon neutrality.

All 3 S-Reits also target to achieve at least 20 hours of training hours per employee and contribute to Keppel Capital's target of more than 500 hours of staff volunteerism in 2022.   REIT Watch is a weekly column on The Business Times, read the original version.



REIT Watch - Keppel Group's S-Reits average 3.6% DPU growth for FY2021

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)

<ul><li><a href="https://www.smartkarma.com/entities/keppel-dc-reit" target="_blank" data-smartkarma-citation="entities:85" rel="noopener">Keppel DC REIT (KDCREIT SP)</a> 2H21 DPU +2.8% YoY; Rising portfolio valuations as Cap rates tighten in APAC</li><li><a href="https://www.smartkarma.com/entities/parkway-life-reit" target="_blank" data-smartkarma-citation="entities:13422" rel="noopener">Parkway Life REIT (PREIT SP)</a> Parkway Life REIT (PREIT SP) 4Q21 DPU came in flat; Consistently expensive but delivering stable results</li><li><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> CapitaLand Integrated Commercial Trust (CICT SP) to sell JCube at &lt;4% yield; Received a 10yrs ROFR on the potential redevelopment of the site  </li></ul>

Keppel DC REIT (KDCREIT SP) 2H21 DPU +2.8% YoY; Rising portfolio valuations as Cap rates tighten in APACParkway Life REIT (PREIT SP) Parkway Life REIT (PREIT SP) 4Q21 DPU came in flat; Consistently expensive but delivering stable resultsCapitaland Integrated Commercial Trust (CICT SP) CapitaLand Integrated Commercial Trust (CICT SP) to sell JCube at &lt;4% yield; Received a 10yrs ROFR on the potential redevelopment of the site  

ASEAN Builder's Scoop (25Jan22) - KDCREIT Rising Portfolio Valuations

<ul><li><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> and <a href="https://www.smartkarma.com/entities/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a> proposed merger to form Mapletree Pan Asia Commercial Trust (MPACT); DPU and NAV accretive to MCT unitholders</li><li>The transaction will be ~8.9% and ~6.5% of accretive to DPU and NAV, respectively, on a pro forma basis to MCT unitholders. As for MAGIC unitholders, total consideration is at an attractive premium over trading prices and implies a 1.0x P/NAV, translating into a 1-year total return of ~32.2%</li><li><a href="https://www.smartkarma.com/entities/capitaland-integrated-commercial-trust" target="_blank" data-smartkarma-citation="entities:105" rel="noopener">Capitaland Integrated Commercial Trust (CICT SP)</a> acquires 50% interest in Sydney office building for ~S$410m; DPU accretive by ~1%</li></ul>

Mapletree Commercial Trust (MCT SP) and Mapletree North Asia Commercial Trust (MAGIC SP) proposed merger to form Mapletree Pan Asia Commercial Trust (MPACT); DPU and NAV accretive to MCT unitholdersThe transaction will be ~8.9% and ~6.5% of accretive to DPU and NAV, respectively, on a pro forma basis to MCT unitholders. As for MAGIC unitholders, total consideration is at an attractive premium over trading prices and implies a 1.0x P/NAV, translating into a 1-year total return of ~32.2%Capitaland Integrated Commercial Trust (CICT SP) acquires 50% interest in Sydney office building for ~S$410m; DPU accretive by ~1%

ASEAN Builder's Scoop (3Jan22) - MCT/MAGIC Merger

Singapore

Keppel DC REIT is Asia's first pure-play data centre REIT listed on the Singapore Exchange. Keppel DC REIT's investment strategy is to principally invest, directly or indirectly, in a diversified portfolio of income-producing real estate assets which are used primarily for data centre purposes, as well as real estate related assets.

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Keppel DC REIT (KDCREIT SP)

The Week That Was in ASEAN@Smartkarma - Bank Rakyat Indonesia, Buy Now Pay Later, and BFI Finance

The Week That Was in ASEAN@Smartkarma is filled with an eclectic mix of differentiated, substantive, and actionable insights, macro and equity...

Angus Mackintosh