Global Gaming and Casinos Industry Specialist, Casino Business Review LLC

Howard J Klein

Global Gaming and Casinos Industry Specialist

Casino Business Review LLC

Extensive experience in marketing and development in the Asian gaming market

Global Gaming and Casinos Industry

Equity Bottom-Up

<ul>
<li>LVS is now entirely a balance sheet play in that its cash position vs. run rate assures good liquidity through the lingering covid crisis.</li>
<li>Maturities of its debt pose no problems for refis until '24,'25--and even minimal then.</li>
<li>Recurring sporadic covid outbreaks and Beijing policies impede GGR recovery. We are moving LVS from BUY to HOLD to reflect the value of its sustainability rather than growth.</li>
</ul>


LVS is now entirely a balance sheet play in that its cash position vs. run rate assures good liquidity through the lingering covid crisis.
Maturities of its debt pose no problems for refis until '24,'25--and even minimal then.
Recurring sporadic covid outbreaks and Beijing policies impede GGR recovery. We are moving LVS from BUY to HOLD to reflect the value of its sustainability rather than growth.


Las Vegas Sands:  Totally Asia Facing, It Is Valued on Financial Strength Amid Covid Challenges

<ul>
<li>DCF valuation now at $44.51 indicating stock could be 24% undervalued here.</li>
<li>Sentiment on Las Vegas asset sale has turned negative as to timing as some investors believe it was hasty given the recovery of the Vegas market.</li>
<li>Strong balance sheet provides long term solvency with current ratio of 2.1 as rumors of China lockdown easing persist since last week.</li>
</ul>


DCF valuation now at $44.51 indicating stock could be 24% undervalued here.
Sentiment on Las Vegas asset sale has turned negative as to timing as some investors believe it was hasty given the recovery of the Vegas market.
Strong balance sheet provides long term solvency with current ratio of 2.1 as rumors of China lockdown easing persist since last week.


Las Vegas Sands: Totally Asia Facing, Is Held Hostage to Travel Bans Remains Attractive at US$33.98

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.

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-05/Capture_4.PNG' alt='S-Reits with significant Singapore-based retail assets' />
 </figure>
 <div class='content-caption'>S-Reits with significant Singapore-based retail assets</div>
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<html><body>Singapore focused office S-Reits remain poised to benefit as more employees return to the office. The Urban Redevelopment Authority (URA) office rental index in the Central Region grew 1.6 per cent and for a second consecutive quarter in Q1 2022 driven by limited supply. 
CBRE Research also expects Core Central Business District (CBD) rents to increase by 6.9 per cent year on year for the whole of 2022. 
SGX lists 6 S-Reits with exposure to Singapore-based office assets. Keppel REIT is a pure-play office S-REIT while CapitaLand Integrated Commercial Trust (CICT), Mapletree Commercial Trust (MCT), Suntec REIT, OUE Commercial REIT and Lendlease Global Commercial REIT are diversified S-REITs with exposure to Singapore office properties. 
Keppel Reit reported a 4.3 per cent year-on-year growth in distributable income for Q1 2022 mainly from its acquisition of Keppel Bay Tower last year. 
Most of its new leases for Q1 2022 were in Singapore (Ocean Financial Centre, Marina Bay Financial Centre, and One Raffles Quay), with average signing rent for Singapore office leases at S$11.15 psf pm, higher than Singapore’s average core CBD Grade A office rents (S$10.95 psf pm). 
CICT reported improved portfolio occupancy of 92.3 per cent in its Singapore portfolio and has seen a 9.3 per cent increase in rent reversion in Q1 2022. 
CICT most recently completed its acquisition of a 70 per cent interest in CapitaSky (formerly known as 79 Robinson Road) which has a committed occupancy of 92.9 per cent and net property income yield of 4 per cent. 
MCT reported that its FY21/22 gross revenue from office/business park assets grew 1.9 per cent year on year driven by higher contributions from Mapletree Business City, mTower and MLHF. All its office/business park assets reported strong occupancy rates, with mTower observing significant growth from 75 per cent to 84.7 per cent. 
Mapletree Anson closed its transitional vacancy as it reported full commitment. MCT expects positive leasing momentum for office/business park to continue through to the new financial year. 
Suntec Reit saw its office committed occupancy strengthen to 97.5 per cent and recorded a 3.2 per cent increase in rent reversion for FY21. 
The Reit noted income contribution from its Singapore office portfolio is expected to grow, driven by cumulative positive rent reversions achieved in the past 11 quarters and full impact of revenue from leases committed in 2021. 
OUE Commercial Reit noted that average passing rents of its Singapore office properties were higher year on year, with OUE Bayfront hitting a high of S$12.49 psf. 
Its office properties were observed to record higher valuations ranging from 0.2 to 7.5 per cent year on year, compared to its other segments. 
Lendlease Global Commercial Reit completed its 100 per cent direct interest in Jem. Its Jem office component is fully leased to the Ministry of National Development on a 30-year master lease with a rent review every five years. REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/tenant-sales-back-at-pre-covid-levels-for-retail-s-reits"> </a><a href="https://www.businesstimes.com.sg/companies-markets/singapore-based-office-s-reits-report-improved-metrics-and-higher-rents">read </a>the original version.</body></html>


      
    
    S-Reits with significant Singapore-based retail assets

Singapore focused office S-Reits remain poised to benefit as more employees return to the office. The Urban Redevelopment Authority (URA) office rental index in the Central Region grew 1.6 per cent and for a second consecutive quarter in Q1 2022 driven by limited supply.  
CBRE Research also expects Core Central Business District (CBD) rents to increase by 6.9 per cent year on year for the whole of 2022.  
SGX lists 6 S-Reits with exposure to Singapore-based office assets. Keppel REIT is a pure-play office S-REIT while CapitaLand Integrated Commercial Trust (CICT), Mapletree Commercial Trust (MCT), Suntec REIT, OUE Commercial REIT and Lendlease Global Commercial REIT are diversified S-REITs with exposure to Singapore office properties.  
Keppel Reit reported a 4.3 per cent year-on-year growth in distributable income for Q1 2022 mainly from its acquisition of Keppel Bay Tower last year.  
Most of its new leases for Q1 2022 were in Singapore (Ocean Financial Centre, Marina Bay Financial Centre, and One Raffles Quay), with average signing rent for Singapore office leases at S$11.15 psf pm, higher than Singapore’s average core CBD Grade A office rents (S$10.95 psf pm).  
CICT reported improved portfolio occupancy of 92.3 per cent in its Singapore portfolio and has seen a 9.3 per cent increase in rent reversion in Q1 2022.  
CICT most recently completed its acquisition of a 70 per cent interest in CapitaSky (formerly known as 79 Robinson Road) which has a committed occupancy of 92.9 per cent and net property income yield of 4 per cent.  
MCT reported that its FY21/22 gross revenue from office/business park assets grew 1.9 per cent year on year driven by higher contributions from Mapletree Business City, mTower and MLHF. All its office/business park assets reported strong occupancy rates, with mTower observing significant growth from 75 per cent to 84.7 per cent.  
Mapletree Anson closed its transitional vacancy as it reported full commitment. MCT expects positive leasing momentum for office/business park to continue through to the new financial year.  
Suntec Reit saw its office committed occupancy strengthen to 97.5 per cent and recorded a 3.2 per cent increase in rent reversion for FY21.  
The Reit noted income contribution from its Singapore office portfolio is expected to grow, driven by cumulative positive rent reversions achieved in the past 11 quarters and full impact of revenue from leases committed in 2021.  
OUE Commercial Reit noted that average passing rents of its Singapore office properties were higher year on year, with OUE Bayfront hitting a high of S$12.49 psf.  
Its office properties were observed to record higher valuations ranging from 0.2 to 7.5 per cent year on year, compared to its other segments.  
Lendlease Global Commercial Reit completed its 100 per cent direct interest in Jem. Its Jem office component is fully leased to the Ministry of National Development on a 30-year master lease with a rent review every five years.  REIT Watch is a weekly column on The Business Times, read the original version.


REIT Watch - Singapore-based Office S-REITs report improved metrics and higher rents 

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/yanlord-land-group-ltd" target="_blank" data-smartkarma-citation="entities:14152" rel="noopener">Yanlord Land (YLLG SP)</a> Mar22 contracted pre-sales rose 0.8% YoY; 1Q22 presales down 11.4% YoY </li><li><a href="https://www.smartkarma.com/entities/las-vegas-sands-corp" target="_blank" data-smartkarma-citation="entities:807" rel="noopener">Las Vegas Sands (LVS US)</a> given one more year to begin construction of its S$4.5bn Marina Bay Sands extension</li><li><a href="https://www.smartkarma.com/entities/capitaland-investment-ltd-si" target="_blank" data-smartkarma-citation="entities:33774" rel="noopener">Capitaland Investment (CLI SP)</a> to issue S$400m worth of fixed rate notes at 3.33% due 2027</li></ul>

Yanlord Land (YLLG SP) Mar22 contracted pre-sales rose 0.8% YoY; 1Q22 presales down 11.4% YoY Las Vegas Sands (LVS US) given one more year to begin construction of its S$4.5bn Marina Bay Sands extensionCapitaland Investment (CLI SP) to issue S$400m worth of fixed rate notes at 3.33% due 2027

ASEAN Builder's Scoop (7Apr22) - YLLG Mar22 Presales Inched up 0.8% YoY

<figure>
 <img src='https://api2.sgx.com/sites/default/files/2022-04/sreit.PNG' alt='SREIT asset' />
 </figure>
 <div class='content-caption'>SREIT asset</div>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN" "http://www.w3.org/TR/REC-html40/loose.dtd">
<html><body>Singapore's Central Business District (CBD) saw Grade A office rents record the fastest quarterly growth since rents turned around in Q2 2021, according to JLL Singapore in a recent report. 
Grade A office rents in the CBD rose 2.3 per cent to S$10.46 per square foot (psf) per month (pm) in the latest quarter, up from Q4 2021's S$10.23. Rental rates have recovered by 6.9 per cent from its recent lows in Q1 2021. 
Office Reits may also be poised to benefit from a growth in demand for office space as up to 75 per cent of office workers are allowed to return to their workplaces, even as hybrid working continues. 
Listed on SGX are 5 S-Reits with Singapore office properties in their portfolios. They are, Keppel Reit which is a pure-play office S-Reit, and diversified S-Reits CapitaLand Integrated Commercial Trust (CICT), Suntec Reit, Mapletree Commercial Trust (MCT), and OUE Commercial Reit (OUE C-Reit). Keppel Reit in FY21 had a tenant retention rate of 62 per cent and noted that a majority of new and expansion leases were in Singapore. 
Its weighted average signing rent for Singapore office leases was approximately S$10.56 psf pm. 
Building valuations for Marina Bay Financial Centre Towers 1 &amp; 2, One Raffles Quay and Keppel Bay Tower increased due to higher rental rates. 
OUE C-Reit which has a portfolio of 3 office properties in Singapore's CBD noted in its FY21 results that average passing rents of Singapore office properties at Dec 2021 were higher year on year, with OUE Bayfront hitting a high of S$12.49 psf due to the successful renewal of an anchor tenant. The Reit expects positive leasing momentum to continue in 2022, supported by the technology sector amid a limited supply pipeline. 
CICT recently announced its proposed acquisition of 70 per cent interest in 79 Robinson Road which has a building occupancy rate of 92.9 per cent. The acquisition is expected to offer pro forma annualised net property income yield of 4 per cent, distribution per unit accretion of 2.9 per cent, and is expected to complete in Q2 2022. 
Across the broader S-Reits sector, S-Reits demonstrated resiliency amid the backdrop of rising inflation and a rate hike cycle with the iEdge S-Reit Index posting 1.3 per cent total returns in Q1 2022, outperforming the average decline of 4.9 per cent across global Reit hubs. 
Despite rising interest rates, S-Reits have an average distribution yield of 6.3 per cent, around 400 bps spread over Singapore's 10-year government bond yields. The sector has an average gearing ratio of about 37 per cent (current regulatory ceiling is 50 per cent) and has an average 75 per cent of their borrowings pegged at fixed rates (entered directly in fixed rates or hedged through floating-to-fixed interest rate swaps). 
The top 5 performing S-Reits and property trusts in Q1 2022 averaged 14.1 per cent total returns, outperforming STI's 9.6 per cent, and are mainly from the hospitality and office sub-segments. They are: Suntec Reit (+17.6 per cent), Frasers Hospitality Trust (+15.1 per cent), Far East Hospitality Trust (+13.1 per cent), CDL Hospitality Trusts (+13.0 per cent), and Ascott Residence Trust (+11.5 per cent). 
Drivers that potentially drove the sub-segments were the continued reopening theme and relaxation of Covid measures across Singapore and the region, as well as the positive momentum in office rental rates.  REIT Watch is a weekly column on The Business Times,<a href="https://www.businesstimes.com.sg/companies-markets/singapore-office-s-reits-poised-to-benefit-from-positive-rental-momentum-0"> read </a>the original version.</body></html>


      
    
    SREIT asset

Singapore's Central Business District (CBD) saw Grade A office rents record the fastest quarterly growth since rents turned around in Q2 2021, according to JLL Singapore in a recent report.  
Grade A office rents in the CBD rose 2.3 per cent to S$10.46 per square foot (psf) per month (pm) in the latest quarter, up from Q4 2021's S$10.23. Rental rates have recovered by 6.9 per cent from its recent lows in Q1 2021.  
Office Reits may also be poised to benefit from a growth in demand for office space as up to 75 per cent of office workers are allowed to return to their workplaces, even as hybrid working continues.  
Listed on SGX are 5 S-Reits with Singapore office properties in their portfolios. They are, Keppel Reit which is a pure-play office S-Reit, and diversified S-Reits CapitaLand Integrated Commercial Trust (CICT), Suntec Reit, Mapletree Commercial Trust (MCT), and OUE Commercial Reit (OUE C-Reit). Keppel Reit in FY21 had a tenant retention rate of 62 per cent and noted that a majority of new and expansion leases were in Singapore.  
Its weighted average signing rent for Singapore office leases was approximately S$10.56 psf pm.  
Building valuations for Marina Bay Financial Centre Towers 1 &amp; 2, One Raffles Quay and Keppel Bay Tower increased due to higher rental rates.  
OUE C-Reit which has a portfolio of 3 office properties in Singapore's CBD noted in its FY21 results that average passing rents of Singapore office properties at Dec 2021 were higher year on year, with OUE Bayfront hitting a high of S$12.49 psf due to the successful renewal of an anchor tenant. The Reit expects positive leasing momentum to continue in 2022, supported by the technology sector amid a limited supply pipeline.  
CICT recently announced its proposed acquisition of 70 per cent interest in 79 Robinson Road which has a building occupancy rate of 92.9 per cent. The acquisition is expected to offer pro forma annualised net property income yield of 4 per cent, distribution per unit accretion of 2.9 per cent, and is expected to complete in Q2 2022.  
Across the broader S-Reits sector, S-Reits demonstrated resiliency amid the backdrop of rising inflation and a rate hike cycle with the iEdge S-Reit Index posting 1.3 per cent total returns in Q1 2022, outperforming the average decline of 4.9 per cent across global Reit hubs.  
Despite rising interest rates, S-Reits have an average distribution yield of 6.3 per cent, around 400 bps spread over Singapore's 10-year government bond yields. The sector has an average gearing ratio of about 37 per cent (current regulatory ceiling is 50 per cent) and has an average 75 per cent of their borrowings pegged at fixed rates (entered directly in fixed rates or hedged through floating-to-fixed interest rate swaps).  
The top 5 performing S-Reits and property trusts in Q1 2022 averaged 14.1 per cent total returns, outperforming STI's 9.6 per cent, and are mainly from the hospitality and office sub-segments. They are: Suntec Reit (+17.6 per cent), Frasers Hospitality Trust (+15.1 per cent), Far East Hospitality Trust (+13.1 per cent), CDL Hospitality Trusts (+13.0 per cent), and Ascott Residence Trust (+11.5 per cent).  
Drivers that potentially drove the sub-segments were the continued reopening theme and relaxation of Covid measures across Singapore and the region, as well as the positive momentum in office rental rates.   REIT Watch is a weekly column on The Business Times, read the original version.


REIT Watch - Singapore office S-Reits poised to benefit from positive rental momentum

United States

Las Vegas Sands Corp. owns and operates casino resorts and convention centers. The Company operates in the United States, Macau and Singapore. Las Vegas Sand Corp's casinos offer a wide range of gaming activities and entertainment as well as overnight accommodations, while its expo centers host a wide range of entertainment shows, expositions, and other activities.

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Las Vegas Sands (LVS US)

Las Vegas Sands: Totally Asia Facing, It Is Valued on Financial Strength Amid Covid Challenges

The shares of LVS are priced close to DCF value. The continuing pandemic impedes recovery but the company's strong balance sheet is a reason to...

Howard J Klein

Las Vegas Sands: Totally Asia Facing, Is Held Hostage to Travel Bans Remains Attractive at US$33.98

LVS shares are trading below pandemic lows, its DCF valuation much higher--all due to travel bans and lockdowns which could ease and trigger a big...

Howard J Klein

REIT Watch - Singapore-based Office S-REITs report improved metrics and higher rents

Singapore focused office S-Reits remain poised to benefit as more employees return to the office. The Urban Redevelopment...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (7Apr22) - YLLG Mar22 Presales Inched up 0.8% YoY

YLLG Mar22 Presales Inched up 0.8% YoY; LVS given a year's grace for MBS extension; SMPH's to open newest mall in Roxas City; MGSB's M Arisa sees...

SCCM Asia Research

REIT Watch - Singapore office S-Reits poised to benefit from positive rental momentum

Singapore's Central Business District (CBD) saw Grade A office rents record the fastest quarterly growth since rents turned...

Singapore Exchange Ltd (SGX)

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