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)

<h2>Singapore</h2>
<h3>Cuscaden Peak minimum chain offer price for each <a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994" rel="noopener">SPH REIT (SPHREIT SP)</a> unit stands at S$96.4c</h3>
<ul>
<li>The minimum chain offer price, which consortium Cuscaden Peak will have to offer for each SPHREIT if its acquisition bid for Singapore Press Holdings (SPH SP) succeeds is S$96.4c, fully in cash. The consortium had made a surprise rival bid to privatise SPH, following an earlier offer from Keppel Corp (KEP SP). Such an acquisition would take place by way of a scheme of arrangement. Subject to the finalisation of the terms of such a scheme, the completion of Cuscaden's proposed cash acquisition would result in an obligation for it to undertake a chain offer for all SPHREIT units as well, in accordance with the Singapore Code on Take-overs and Mergers</li>
<li>The minimum chain offer price shall be the simple average of the daily volume-weighted average traded prices of SPHREIT units, on either the latest 20 trading days, or whatever number of trading days there were within 30 calendar days before the announcement of the possible offer. The chain offer will not be made unless and until the possible scheme becomes effective in accordance with its terms, or – if Cuscaden undertakes the proposed acquisition in another method – is declared effective or unconditional, and/or is completed. Cuscaden's offer for SPH is S$2.10 per share in cash. Cuscaden comprises Hotel Properties, businessman Ong Beng Seng and two Temasek-linked entities – CLA Real Estate Holdings and Mapletree. Its proposal still needs to be accepted by the board of SPH.</li>
</ul>

Singapore
Cuscaden Peak minimum chain offer price for each SPH REIT (SPHREIT SP) unit stands at S$96.4c

The minimum chain offer price, which consortium Cuscaden Peak will have to offer for each SPHREIT if its acquisition bid for Singapore Press Holdings (SPH SP) succeeds is S$96.4c, fully in cash. The consortium had made a surprise rival bid to privatise SPH, following an earlier offer from Keppel Corp (KEP SP). Such an acquisition would take place by way of a scheme of arrangement. Subject to the finalisation of the terms of such a scheme, the completion of Cuscaden's proposed cash acquisition would result in an obligation for it to undertake a chain offer for all SPHREIT units as well, in accordance with the Singapore Code on Take-overs and Mergers
The minimum chain offer price shall be the simple average of the daily volume-weighted average traded prices of SPHREIT units, on either the latest 20 trading days, or whatever number of trading days there were within 30 calendar days before the announcement of the possible offer. The chain offer will not be made unless and until the possible scheme becomes effective in accordance with its terms, or – if Cuscaden undertakes the proposed acquisition in another method – is declared effective or unconditional, and/or is completed. Cuscaden's offer for SPH is S$2.10 per share in cash. Cuscaden comprises Hotel Properties, businessman Ong Beng Seng and two Temasek-linked entities – CLA Real Estate Holdings and Mapletree. Its proposal still needs to be accepted by the board of SPH.


ASEAN Builder's Scoop (2Nov21) - Cuscaden Peak Chain Offer for SPHREIT

<h2>Singapore</h2><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/233/730/original/image_54312508231633489341255.png?1633489342" class="editor-image img-responsive" data-smartkarma-image-id="233730"></figure><h3><a href="https://www.smartkarma.com/entities/sph-reit" target="_blank" data-smartkarma-citation="entities:5994" rel="noopener">SPH REIT (SPHREIT SP)</a> FY21 DPU +98.5% YoY; Rental reversions still weak, cap rate flat</h3><ul><li>2H21 revenue and NPI rose by 27% and 24.6% to S$137.2m and S$97.8m, respectively. FY21 revenue and NPI increased by 14.8% and 11.4% YoY to S$277.2m (107% of BB est) and S$202.7m (122% of BB est), respectively. The increase was mainly due to overall market recovery, lower rental assistance, and the full year contribution from Westfield Marion Shopping Centre</li></ul>

SingaporeSPH REIT (SPHREIT SP) FY21 DPU +98.5% YoY; Rental reversions still weak, cap rate flat2H21 revenue and NPI rose by 27% and 24.6% to S$137.2m and S$97.8m, respectively. FY21 revenue and NPI increased by 14.8% and 11.4% YoY to S$277.2m (107% of BB est) and S$202.7m (122% of BB est), respectively. The increase was mainly due to overall market recovery, lower rental assistance, and the full year contribution from Westfield Marion Shopping Centre

<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;">
<p> </p>
</td>
<td style="width: 141.2pt;">
<p>SPHREIT</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Period</p>
</td>
<td style="width: 141.2pt;">
<p>3Q21</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Gross Revenue (S$ m)</p>
</td>
<td style="width: 141.2pt;">
<p>69.6 (+82.8% YoY)</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>NPI (S$ m)</p>
</td>
<td style="width: 141.2pt;">
<p>Not Disclosed</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>DPU (S$ c)</p>
</td>
<td style="width: 141.2pt;">
<p>1.38 (+176.0% YoY)</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>NAV per Unit (S$)</p>
</td>
<td style="width: 141.2pt;">
<p>Not Disclosed</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>P/B (x)</p>
</td>
<td style="width: 141.2pt;">
<p>1.02 (Based on 2Q21 NAV)</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Occupancy (%)</p>
</td>
<td style="width: 141.2pt;">
<p>98.4</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Reversion (%)</p>
</td>
<td style="width: 141.2pt;">
<p>Not Disclosed</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Gearing (%)</p>
</td>
<td style="width: 141.2pt;">
<p>Not Disclosed</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Cost of Debt (%)</p>
</td>
<td style="width: 141.2pt;">
<p>1.86</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>1 Yr Fwd Yield (%)</p>
</td>
<td style="width: 141.2pt;">
<p>5.62</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Debt Hedged (%)</p>
</td>
<td style="width: 141.2pt;">
<p>58</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Target Price</p>
</td>
<td style="width: 141.2pt;">
<p>NA</p>
</td>
</tr>
<tr>
<td style="width: 141.25pt;">
<p>Rating</p>
</td>
<td style="width: 141.2pt;">
<p>NA</p>
</td>
</tr>
</tbody>
</table>

Singapore
SREITs results in a glance (see detailed spreadsheet and calendar attached)




 


SPHREIT




Period


3Q21




Gross Revenue (S$ m)


69.6 (+82.8% YoY)




NPI (S$ m)


Not Disclosed




DPU (S$ c)


1.38 (+176.0% YoY)




NAV per Unit (S$)


Not Disclosed




P/B (x)


1.02 (Based on 2Q21 NAV)




Occupancy (%)


98.4




Reversion (%)


Not Disclosed




Gearing (%)


Not Disclosed




Cost of Debt (%)


1.86




1 Yr Fwd Yield (%)


5.62




Debt Hedged (%)


58




Target Price


NA




Rating


NA





ASEAN Builder's Scoop (13Jul21) - SPHREIT No Mention of Rebates

Partner, River Valley Asset Management

River Valley Asset Management

Partner

Singapore-based boutique asset management firm

River Valley Asset Management is a Singapore-based boutique asset management firm. Our team at RVAM strongly believes in being a trusted steward of our clients' wealth across generations.

Each of our fund managers has years of rich portfolio management experience over multiple market cycles at world-class investment houses. We bring our clients the combined strength of our investment team to manage their financial portfolios and to provide bespoke guidance on all aspects of their financial health.

We offer multi-asset class expert investment advice to accredited investors who are family offices, high net worth individuals and institutional investors to preserve and grow our clients' wealth.

The fund management team of the company includes Homiyar Vasania, Anand Ramachandran and Jamshed Desai.

<p><span lang="EN-SG">As a mature economy with stable businesses, Singapore's equity benchmarks are dominated by Banks &amp; Government Linked Companies (GLC's) which have grown large over time. The large listed companies in Singapore (private as well as GLC’s) are now facing headwinds from tight labour markets resulting in rising costs and, in the absence of growth, the need to focus on raising productivity. <br></span><br><span lang="EN-SG"><span lang="EN-SG">It is therefore not surprising that the Singapore markets do not excite the average investor. However, within this space we have been finding many hidden gems which have consistently delivered and increasingly fit the needs of a Singaporean investor looking for stable returns in a low growth environment: the REIT marketplace. Over the last seven years the REIT index has delivered over 10% p.a. annualized return which stands in stark contrast to the meagre 4% returns from benchmark STI index.</span></span></p>

As a mature economy with stable businesses, Singapore's equity benchmarks are dominated by Banks &amp; Government Linked Companies (GLC's) which have grown large over time. The large listed companies in Singapore (private as well as GLC’s) are now facing headwinds from tight labour markets resulting in rising costs and, in the absence of growth, the need to focus on raising productivity.   It is therefore not surprising that the Singapore markets do not excite the average investor. However, within this space we have been finding many hidden gems which have consistently delivered and increasingly fit the needs of a Singaporean investor looking for stable returns in a low growth environment: the REIT marketplace. Over the last seven years the REIT index has delivered over 10% p.a. annualized return which stands in stark contrast to the meagre 4% returns from benchmark STI index.

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.

Equity Bottom-Up

<ul><li>REIT Watch - Performance of S-Reits within the STI On Thursday night (Oct 12), the US Consumer Price Index (CPI) came in slightly higher than markets had anticipated, leading to higher expectations that the Federal Reserve will likely implement one more interest rate hike before the year ends.</li><li>The three S-Reits with the lowest gearing ratios are: Sasseur Reit (26.2 per cent), Frasers Logistics & Commercial Trust (28.6 per cent) and Paragon Reit (29.8 per cent).</li></ul>

REIT Watch - Performance of S-Reits within the STI On Thursday night (Oct 12), the US Consumer Price Index (CPI) came in slightly higher than markets had anticipated, leading to higher expectations that the Federal Reserve will likely implement one more interest rate hike before the year ends.The three S-Reits with the lowest gearing ratios are: Sasseur Reit (26.2 per cent), Frasers Logistics & Commercial Trust (28.6 per cent) and Paragon Reit (29.8 per cent).

REIT Watch - S-Reits among top gainers in STI for week starting Oct 9

Singapore

Paragon REIT is a real estate investment trust that primarily invests in income-producing retail properties across Singapore and the Asia-Pacific region. Its portfolio includes upscale retail malls, medical suites, and shopping centers such as Paragon, The Clementi Mall, and Westfield Marion Shopping Centre. The company is headquartered in Singapore and was founded in 2013.

Price Gauge
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Paragon REIT (PGNREIT SP)

ASEAN Builder's Scoop (2Nov21) - Cuscaden Peak Chain Offer for SPHREIT

Cuscaden Peak chain offer for SPHREIT; URA rejects International Plaza's redevelopment plan; DD riding on hospitality tailwinds; DILD 9M21 mktg...

SCCM Asia Research

ASEAN Builder's Scoop (5Oct21)

SPHREIT rental reversions still weak, cap rate flat; SLI ventures into leisure farms residential concept; Phils Sep21 inflation call at 5.2%; IOIPG...

SCCM Asia Research

ASEAN Builder's Scoop (13Jul21) - SPHREIT No Mention of Rebates

SPHREIT no mention of rebates; CAPL opens RC the Bund Shanghai; LMRT extends mall closure in Medan; SLI plans for 3bn shares follow-on offer; 2Q21...

SCCM Asia Research

Singapore - The Hidden Gems

As a mature economy with stable businesses, Singapore's equity benchmarks are dominated by Banks & Government Linked Companies (GLC's) which...

River Valley Asset Management

REIT Watch - S-Reits among top gainers in STI for week starting Oct 9

REIT Watch - Performance of S-Reits within the STI On Thursday night (Oct 12), the US Consumer Price Index (CPI) came in slightly higher than...

Singapore Exchange Ltd (SGX)

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52-week Range

Market Cap (USDm)

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