Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Event-Driven

<p>On 4th January 2021, Small-cap logistics JREIT <a href="https://www.smartkarma.com/entities/cre-logistics-reit-inc" target="_blank" data-smartkarma-citation="entities:26745:1" rel="noopener">CRE Logistics REIT (3487 JP)</a> (<strong>"CRE"</strong>) announced a follow-on equity offering to fund their acquisition of three logistics properties. As discussed in <a href="https://www.smartkarma.com/insights/jreit-offering-cre-logistics-reit-3487-jp-take-it-vs-comps" target="_blank" data-smartkarma-citation="insights:46779" rel="noopener">JREIT Offering: CRE Logistics REIT (3487 JP) - Take It (Vs Comps)</a>, I advised being LONG vs comps from the Pricing Date (13th January 2021) and since then CRE logistics has gained +44.6%, outperforming its comps and the overall JREIT market by +9.1% and +18.7% respectively. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/227/501/original/Last+Offering+Performance.png?1630569996" class="editor-image img-responsive" data-smartkarma-image-id="227501"></figure><div class="content-caption">Source: Quiddity [Data: Capital IQ]</div></section><p>Today after market close, CRE launched another follow-on equity offering. </p><p>This time, the total offer quantity will be 64,550 units and that means the total offer size would be around ¥13bn (~US$120mn) which is slightly larger than last time (~US$106mn) but still quite small in comparison to some of the other recent JREIT offerings. However, historically such follow-on equity offerings have acted as catalysts for strong secondary market performance in the weeks following the Pricing Date and in this insight, we will take a look at whether CRE has the potential to perform as well as it did last time. </p><p><em>More below the fold.</em> </p><hr><p><em>For a primer on J-REIT Offerings, their history, their patterns, etc, please refer to <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>.</em></p>

On 4th January 2021, Small-cap logistics JREIT CRE Logistics REIT (3487 JP) ("CRE") announced a follow-on equity offering to fund their acquisition of three logistics properties. As discussed in JREIT Offering: CRE Logistics REIT (3487 JP) - Take It (Vs Comps), I advised being LONG vs comps from the Pricing Date (13th January 2021) and since then CRE logistics has gained +44.6%, outperforming its comps and the overall JREIT market by +9.1% and +18.7% respectively. Source: Quiddity [Data: Capital IQ]Today after market close, CRE launched another follow-on equity offering. This time, the total offer quantity will be 64,550 units and that means the total offer size would be around ¥13bn (~US$120mn) which is slightly larger than last time (~US$106mn) but still quite small in comparison to some of the other recent JREIT offerings. However, historically such follow-on equity offerings have acted as catalysts for strong secondary market performance in the weeks following the Pricing Date and in this insight, we will take a look at whether CRE has the potential to perform as well as it did last time. More below the fold. For a primer on J-REIT Offerings, their history, their patterns, etc, please refer to J-REIT Offering Primer: Get Ready for Offering Season 2021.

CRE Logistics (3487 JP): Can They Do Better Than Last Time?

APAC IPOs & Placements

Zhen Zhou, Toh

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Mitsubishi Estate Logistics / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/mitsubishi-estate-logistics" target="_blank" data-smartkarma-citation="entities:25867:1" rel="noopener">Mitsubishi Estate Logistics (3481 JP)</a> is looking raise US$157m to acquire properties. We have covered previous placements in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/mitsubishi-estate-logistic-reit-placement-becoming-a-regular" target="_blank" data-smartkarma-citation="insights:32576" rel="noopener">Mitsubishi Estate Logistic REIT Placement - Becoming a Regular</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/mitsubishi-estate-logistic-reit-placement-back-for-its-annual-placement" target="_blank" data-smartkarma-citation="insights:42173" rel="noopener">Mitsubishi Estate Logistic REIT Placement - Back for Its Annual Placement</a> </li>
</ul>
</div>
<div>
<p>In this note, we will look at the assets to be acquired, impact on forecast and portfolio, and run the deal through our framework.</p>
</div>


Mitsubishi Estate Logistics (3481 JP) is looking raise US$157m to acquire properties. We have covered previous placements in:




Mitsubishi Estate Logistic REIT Placement - Becoming a Regular 

Mitsubishi Estate Logistic REIT Placement - Back for Its Annual Placement 



In this note, we will look at the assets to be acquired, impact on forecast and portfolio, and run the deal through our framework.


Mitsubishi Estate Logistic REIT Placement - Earlier than Before but Still a Well-Flagged Deal

<p>Today after the close, small-cap logistics JREIT <a href="https://www.smartkarma.com/entities/mitsubishi-estate-logistics" target="_blank" data-smartkarma-citation="entities:25867:1" rel="noopener">Mitsubishi Estate Logistics (3481 JP)</a> ("MEL") announced a <a href="https://mel-reit.co.jp/file/en-news-dd1ec7deddb6aa14bb62fd8762edcf46e6deef85.pdf" target="_blank" rel="noopener">follow-on equity offering</a> to fund part of their <a href="https://mel-reit.co.jp/file/en-news-4d5467181cf32a31228972be29054c2a2deca660.pdf" target="_blank" rel="noopener">recent acquisition</a> of five logistics properties. </p><p>The primary offer quantity is 41,000 units and there is also an over-allotment quantity of 2,050 units. The size of this offering could be around ¥16.6bn (~US$157mn).</p><div><p>The Offer Price will be determined between 1st March and 3rd March (typically it has been the first day of this window for most JREIT offerings) and the two business days following the offer price determination day (pricing date) will be the application date. </p></div><div><p><em>More below the fold.</em></p></div>

Today after the close, small-cap logistics JREIT Mitsubishi Estate Logistics (3481 JP) ("MEL") announced a follow-on equity offering to fund part of their recent acquisition of five logistics properties. The primary offer quantity is 41,000 units and there is also an over-allotment quantity of 2,050 units. The size of this offering could be around ¥16.6bn (~US$157mn).The Offer Price will be determined between 1st March and 3rd March (typically it has been the first day of this window for most JREIT offerings) and the two business days following the offer price determination day (pricing date) will be the application date. More below the fold.

JREIT Offering: Mitsubishi Estate Logistics (3481 JP) - Avoidable

CRE Logistics REIT / Equity Capital Markets

<p>On 4th January 2021, Small-cap logistics JREIT <a href="https://www.smartkarma.com/entities/cre-logistics-reit-inc" target="_blank" data-smartkarma-citation="entities:26745:1" rel="noopener">CRE Logistics REIT (3487 JP)</a> announced a follow-on equity offering in order to fund their recent acquisition of three logistics properties. </p><p>The primary offer quantity is 73,000 units and the over-allotment quantity is 3,650 units (upper limit). The size of this offering could be around ¥11bn (~US$106mn). </p><p>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 day following the offer price determination day (pricing date) will be the application date. </p>

On 4th January 2021, Small-cap logistics JREIT CRE Logistics REIT (3487 JP) announced a follow-on equity offering in order to fund their recent acquisition of three logistics properties. The primary offer quantity is 73,000 units and the over-allotment quantity is 3,650 units (upper limit). The size of this offering could be around ¥11bn (~US$106mn). 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 day following the offer price determination day (pricing date) will be the application date. 

JREIT Offering: CRE Logistics REIT (3487 JP) - Take It (Vs Comps)

<p>In 2020, we have so far witnessed 15 follow-on JREIT offerings cumulatively raising JPY463bn (~US$4.5bn). This has been something of a weak year, understandable because of the covid-19 crisis which hit equity market and JREIT prices in March, and keeping them soft for months afterwards.</p>
<p>Historically, January and February are the busiest months, for a variety of reasons.</p>
<p>From 2015-2020, on average, there have been ~7 offerings from the top 40 JREITs announced within the first two months of the calendar year accounting for roughly a third of the total number of offerings in each year during that period. </p>
<section class="figure">
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<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/179/233/original/Number%20of%20Historical%20Offerings%20by%20Calendar%20Month.png?1608207336" class="editor-image img-responsive" data-smartkarma-image-id="179233"></figure>
</section>
</section>
</section>
Source: Quiddity, Capital IQ (Data)</div>
In this insight, we take a look at the prospective candidates who are most likely to launch follow-on equity offerings near-term, and we look at the performance characteristics of J-REIT follow-on offerings and the likelihood of profit from participating in the event.</section>

In 2020, we have so far witnessed 15 follow-on JREIT offerings cumulatively raising JPY463bn (~US$4.5bn). This has been something of a weak year, understandable because of the covid-19 crisis which hit equity market and JREIT prices in March, and keeping them soft for months afterwards.
Historically, January and February are the busiest months, for a variety of reasons.
From 2015-2020, on average, there have been ~7 offerings from the top 40 JREITs announced within the first two months of the calendar year accounting for roughly a third of the total number of offerings in each year during that period. 









Source: Quiddity, Capital IQ (Data)
In this insight, we take a look at the prospective candidates who are most likely to launch follow-on equity offerings near-term, and we look at the performance characteristics of J-REIT follow-on offerings and the likelihood of profit from participating in the event.

J-REIT Offering Primer: Get Ready for Offering Season 2021

Japan

Mitsubishi Estate Logistics REIT Investment Corporation operates real estate investment trust businesses. The Company provides logistics facilities investment trusts, business offices investment trusts, and other services. Mitsubishi Estate Logistics REIT Investment offers its services throughout Japan.

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Mitsubishi Estate Logistics (3481 JP)

CRE Logistics (3487 JP): Can They Do Better Than Last Time?

CRE has launched a US$120mn equity offering to fund their recent property acquisition. Although CRE outperformed peers after their last offering,...

Janaghan Jeyakumar, CFA

Mitsubishi Estate Logistic REIT Placement - Earlier than Before but Still a Well-Flagged Deal

Mitsubishi Estate Logistics (3481 JP) is looking raise US$157m to acquire properties. In this note, we will look at the assets to be acquired and...

Zhen Zhou, Toh

JREIT Offering: Mitsubishi Estate Logistics (3481 JP) - Avoidable

Mitsubishi Estate Logistics (3481 JP) is conducting an offering. The deal is accretive but the fund has low-leverage and low yield vs peers, and...

Janaghan Jeyakumar, CFA

JREIT Offering: CRE Logistics REIT (3487 JP) - Take It (Vs Comps)

This is a large secondary offering to finance an accretive transaction for what has heretofore been the smallest logistics REIT in Japan. Wait...

Janaghan Jeyakumar, CFA

J-REIT Offering Primer: Get Ready for Offering Season 2021

JREIT Follow-On Offerings - A Primer: January and February are the busiest times of the year for a variety of reasons and there are multiple...

Janaghan Jeyakumar, CFA

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