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/mapletree-north-asia-commercial-trust" target="_blank" data-smartkarma-citation="entities:5127" rel="noopener">Mapletree North Asia Commercial Trust (MAGIC SP)</a> settles with insurers for HK$334m over damage to Festival Walk mall</li><li>New bonus GFA incentive scheme for developments that meet standards on digitalization and productivity</li><li><a href="https://www.smartkarma.com/entities/frasers-property-ltd" target="_blank" data-smartkarma-citation="entities:1670" rel="noopener">Frasers Property Ltd (FPL SP)</a> scraps plan to acquire Vietnam property developer</li></ul>

Mapletree North Asia Commercial Trust (MAGIC SP) settles with insurers for HK$334m over damage to Festival Walk mallNew bonus GFA incentive scheme for developments that meet standards on digitalization and productivityFrasers Property Ltd (FPL SP) scraps plan to acquire Vietnam property developer

ASEAN Builder's Scoop (25Nov21) - MAGIC Settles FW's Insurance Claims

<h2>Singapore</h2><h3><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> acquires third Data Centre in the Netherlands</h3><ul><li>KDCREIT has acquired a 100% interest in a freehold property with two data centre buildings in De Hurk, which is the largest business park in Eindhoven, the Netherlands, for EUR37.2m (~S$59.9m) from a fund affiliated with MCAP Global Finance (UK) LLP, the European subsidiary of Marathon Asset Management. The property, which is located at Dillenburgstraat 25A-25E, 25E1, 25F, 25G and 25J-25M, 5652 AM, will be named Eindhoven Campus. It is KDCREIT’s third asset in the Netherlands, and further strengthens its foothold in this key data centre market in Europe</li><li>Strategically located close to Eindhoven’s city centre and international airport, the property is well connected to the Netherland’s motorway network. Comprising two shell and core data centre buildings as well as a warehouse and an ancillary office building within the site, Eindhoven Campus has a combined NLA of approximately 83,841sqft and is fully leased with a WALE of 6.8 years by NLA and 8.5 years by GRI</li><li>Based on the independent valuation dated 7Jul21, the market value of the property was €35.4m (~S$57.1m). The acquisition is expected to be accretive to KDCREIT's DPU, and is funded by the proceeds from the recent equity fund raising and by debt denominated in EUR</li><li>Including the strategic addition of Eindhoven Campus, KDCREIT’s portfolio occupancy rate will improve from 98.0% as at 30Jun21 to 98.1%, while WALE will remain unchanged at 6.5 years.</li></ul>

SingaporeKeppel DC REIT (KDCREIT SP) acquires third Data Centre in the NetherlandsKDCREIT has acquired a 100% interest in a freehold property with two data centre buildings in De Hurk, which is the largest business park in Eindhoven, the Netherlands, for EUR37.2m (~S$59.9m) from a fund affiliated with MCAP Global Finance (UK) LLP, the European subsidiary of Marathon Asset Management. The property, which is located at Dillenburgstraat 25A-25E, 25E1, 25F, 25G and 25J-25M, 5652 AM, will be named Eindhoven Campus. It is KDCREIT’s third asset in the Netherlands, and further strengthens its foothold in this key data centre market in EuropeStrategically located close to Eindhoven’s city centre and international airport, the property is well connected to the Netherland’s motorway network. Comprising two shell and core data centre buildings as well as a warehouse and an ancillary office building within the site, Eindhoven Campus has a combined NLA of approximately 83,841sqft and is fully leased with a WALE of 6.8 years by NLA and 8.5 years by GRIBased on the independent valuation dated 7Jul21, the market value of the property was €35.4m (~S$57.1m). The acquisition is expected to be accretive to KDCREIT's DPU, and is funded by the proceeds from the recent equity fund raising and by debt denominated in EURIncluding the strategic addition of Eindhoven Campus, KDCREIT’s portfolio occupancy rate will improve from 98.0% as at 30Jun21 to 98.1%, while WALE will remain unchanged at 6.5 years.

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>AIMS APAC REIT led the iEdge S-REIT index with a 10.3% total return, 2.2% revenue growth, and 5.7% net property income growth in FY26.</li><li>Retail investors were net buyers of S$1 billion in S-REITs, while institutional investors were net sellers of a similar amount.</li><li>CAREIT attracted institutional interest, with Cohen & Steers increasing its stake, and added 3,112 beds through acquisitions and expansions.</li></ul>

AIMS APAC REIT led the iEdge S-REIT index with a 10.3% total return, 2.2% revenue growth, and 5.7% net property income growth in FY26.Retail investors were net buyers of S$1 billion in S-REITs, while institutional investors were net sellers of a similar amount.CAREIT attracted institutional interest, with Cohen & Steers increasing its stake, and added 3,112 beds through acquisitions and expansions.

REIT Watch - S-REITs maintain pockets of resilience despite headwinds in H1

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/capitaland-ltd" target="_blank" data-smartkarma-citation="entities:55" rel="noopener">Capitaland (CAPL SP)</a> 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot</h3><ul><li>1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H20</li><li>1H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)</li><li>Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21</li><li>Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectively</li><li>Lodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management</li><li>1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and China</li><li>CAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.</li></ul>

SingaporeCapitaland (CAPL SP) 1H21 PATMI +846% YoY; Solid divestments and investments YTD, fund management and residential the bright spot1H21 revenue increased by 34.7% YoY to S$2,730m, mainly driven by development projects as more units were handed over in China and higher progressive revenue recognition from One Pearl Bank in Singapore, partially offset by lower handover of units in Vietnam. The increase was also attributed to lower rental rebates granted to tenants in Singapore and China, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation 2H201H21 PATMI increased by 845.5% YoY and came in at S$922.2m, while operating PATMI increased by 66% YoY to S$433.6m. CAPL booked portfolio/FV gains of S$489m and no FV losses/impairments in 1H21. As at 30Jun21, net D/E ratio was at 0.64x and total cash and available undrawn facilities amounted to ~S$14.8bn. CAPL made total S$3.6bn investments (&gt;S$3bn in new economy) and S$11.2bn gross divestments (effective value of S$3.3bn) YTD (vs annual recycling target of S$3bn)Residential – In SG, CAPL sold 197 units with sales value of S$330m (close to 6x of 1H20). ~92% of launched units have been sold. CanningHill Piers is targeted to be launched in 2H21. In China, CAPL sold 2,625 units in 1H21 (+48.4% YoY), which translated to sales value of RMB8,007m (+43% YoY). In terms of handovers from 3Q21 onwards, CAPL is expected to recognise ~RMB14.1bn from a total of ~6,700 units sold. In Vietnam, CAPL Achieved 80% of 1H21 handover plan of 177 units. Handover pipeline comprising 554 units with a value of S$193m expected to be handed over from 3Q21 onwards. ~87% of launched units have been sold as of 1H21. Two projects are targeted to be launched in 2H21Retail and Commercial – CN registered increase in shoppers’ traffic and tenant’s sales YoY in 2Q21, but SG’s recovery is interrupted by new restrictions  in 2Q21. SG’s shoppers’ traffic and tenant’s sales recorded low improvement in 2Q21. Retail occupancy in CN, SG, MY stood at 91.9%, 97.1% and 86% in 2Q21 (vs 90.7%, 97.2% and 87.6% in 1Q21 and 89%, 97.8% and 88.2% in 4Q20), respectively. Office occupancy in SG, Japan, South Korea and Germany stood at 90.4%, 93.9%, 96.8% and 95.5%, respectivelyLodging – &gt;3,000 units turned operational YTD 2021, bringing total operational units to 71,901 for 7M21 and &gt;8,300 new units secured via management contracts YTD 2021. There was an increase in overall 2Q21 RevPAU by 53% YoY and 19% QoQ from S$43 to S$66, led by Europe (+44% QoQ), China (+22%), Gulf Region (+19%), Singapore (+9%), SEA (+6%) and North Asia (+4%). CAPL is on track to meet 2023 target of 160K units under management with currently c.129K units under management1H21 fund management fee income came in at S$188.7m, a 29% YoY increase and 18% HoH. 1H21 fund AUM rose 6.9% YoY to S$83bn, on track to meet 2024 AUM target of S$100bn. CAPL set up 3 new private funds totalling US$800m in Korea, India, Hong Kong and ChinaCAPL is currently trading at 19.7x FY21E P/E and 0.92x P/B.

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

<h2>Singapore</h2><h3><a href="https://www.smartkarma.com/entities/frasers-logistics-commercial-trust" target="_blank" data-smartkarma-citation="entities:22748" rel="noopener">Frasers Logistics &amp; Commercial Trust (FLT SP)</a> to acquire six freehold properties in Germany, The Netherlands and The UK; Accretive by +1.8% to DPU</h3><ul><li>FLT has proposed an acquisition of interests in three freehold logistics and industrial properties located in Germany and a logistics and industrial property in the Netherlands, from subsidiaries of Frasers Property Limited (FPL SP); and two freehold properties, known as Connexion and Blythe Valley Park, located in the UK from subsidiaries of I.M. Properties. The acquisitions are positioned to capitalise on strong logistics industry tailwinds in The UK and Germany – the two largest e-commerce markets in Europe and among top 10 globally</li><li>The agreed property purchase price for the acquisition is approximately S$548.7m, representing a discount of ~2.5% to the aggregate appraised value of S$562.4m. The aggregate purchase consideration for the acquisition, excluding acquisition fee and other transaction costs is ~S$469.7m</li><li>As at 31Mar21, the acquisitions have a blended occupancy rate of 97.4% with a long WALB of 7.6 years, with tenants that include established third-party logistics companies and corporates, such as Hermes Germany GmbH, Gymshark Limited, Lounge Underwear Limited and BASF SE. All of the New EU Properties are 100% occupied with leases that have built-in consumer price indexation</li><li>With the acquisitions being freehold, the proportion of freehold assets in FLT’s portfolio will increase in proportion from 65.1% to 67.9% upon completion. Portfolio’s WALB will also extend from 4.4 years to 4.7 years</li><li>The estimated NPI yield is ~5%. On a 1H21 pro-forma basis, the acquisitions are expected to be both DPU and NAVPU accretive, at +1.8% and +0.9%, respectively. Funding for the acquisitions will be via a combination of proceeds from the equity fund raising (54.6%) and borrowings (remaining 45.4%). Post-acquisition, gearing would increase from 35.5% to 36.2% on pro-forma basis. The proposed acquisition is expected to be completed by Jun21.</li></ul><figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=03e35791bb&amp;attid=0.0.3&amp;permmsgid=msg-f:1700600348485070213&amp;th=1799bf01bc5bad85&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8xCEqA5_st0uV0EWFnw6XJqjbimQjVryOhbTImWN4xc62NjD9zqImfTW_0CazjDP53F1403yFCvywywt4e0OVlILLThfxaZmQCMoZ5GSG0nL1XYwY11V2LtGY&amp;disp=emb" width="695" height="336" class="editor-image img-responsive" data-image-whitelisted=""></figure>

SingaporeFrasers Logistics &amp; Commercial Trust (FLT SP) to acquire six freehold properties in Germany, The Netherlands and The UK; Accretive by +1.8% to DPUFLT has proposed an acquisition of interests in three freehold logistics and industrial properties located in Germany and a logistics and industrial property in the Netherlands, from subsidiaries of Frasers Property Limited (FPL SP); and two freehold properties, known as Connexion and Blythe Valley Park, located in the UK from subsidiaries of I.M. Properties. The acquisitions are positioned to capitalise on strong logistics industry tailwinds in The UK and Germany – the two largest e-commerce markets in Europe and among top 10 globallyThe agreed property purchase price for the acquisition is approximately S$548.7m, representing a discount of ~2.5% to the aggregate appraised value of S$562.4m. The aggregate purchase consideration for the acquisition, excluding acquisition fee and other transaction costs is ~S$469.7mAs at 31Mar21, the acquisitions have a blended occupancy rate of 97.4% with a long WALB of 7.6 years, with tenants that include established third-party logistics companies and corporates, such as Hermes Germany GmbH, Gymshark Limited, Lounge Underwear Limited and BASF SE. All of the New EU Properties are 100% occupied with leases that have built-in consumer price indexationWith the acquisitions being freehold, the proportion of freehold assets in FLT’s portfolio will increase in proportion from 65.1% to 67.9% upon completion. Portfolio’s WALB will also extend from 4.4 years to 4.7 yearsThe estimated NPI yield is ~5%. On a 1H21 pro-forma basis, the acquisitions are expected to be both DPU and NAVPU accretive, at +1.8% and +0.9%, respectively. Funding for the acquisitions will be via a combination of proceeds from the equity fund raising (54.6%) and borrowings (remaining 45.4%). Post-acquisition, gearing would increase from 35.5% to 36.2% on pro-forma basis. The proposed acquisition is expected to be completed by Jun21.

ASEAN Builder's Scoop (24May21) - FLT expands further into Europe

Singapore

Sasseur Real Estate Investment Trust is a Singapore-based real estate investment trust that invests in a diversified portfolio of income-producing retail outlet malls and related real estate assets, primarily in China. Its portfolio includes four outlet malls located in Chongqing, Hefei, and Kunming. The company was founded in Singapore in 2017.

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Sasseur (SASSR SP)

ASEAN Builder's Scoop (25Nov21) - MAGIC Settles FW's Insurance Claims

MAGIC settles FW's insurance claims; New bonus GFA incentive scheme; FPL cancels VN acquisition; SASSR new CFO; SPSB likely exceeds 2021 sales...

SCCM Asia Research

ASEAN Builder's Scoop (6Sep21)

KDCREIT acquires 3rd DC in Netherlands; Jul21 retail sales flat YoY; MEG rental revenues remain subdued; AGI gears up for Boracay casino; SDPR...

SCCM Asia Research

REIT Watch - S-REITs maintain pockets of resilience despite headwinds in H1

AIMS APAC REIT led the iEdge S-REIT index with a 10.3% total return, 2.2% revenue growth, and 5.7% net property income growth in FY26. Retail...

Singapore Exchange Ltd (SGX)

ASEAN Builder's Scoop (13Aug21) - CAPL Residential and FM Bright Spots

CAPL residential and FM bright spots; UOL turnaround story intact; SASSR sustained recovery momentum; CERT strong reversions, VLL muted land...

SCCM Asia Research

ASEAN Builder's Scoop (24May21) - FLT expands further into Europe

FLT expands further into Europe; SASSR appoints new CEO; Jem/Westgate to close for 2wks; RLC Chengdu project saves the day; Luxury penthouse demand...

SCCM Asia Research

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