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

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 <div class='content-caption'>AA REIT-CEO</div>
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Engineer by training Koh Wee Lih has always been fascinated by the constantly shifting dynamics of the real estate industry.

“The changing nature of property use and property development is something that appeals to me,” the CEO of the manager of SGX-listed AIMS APAC REIT (AA REIT) said with a smile.

“As an engineer, I enjoy creating and assembling things – these same traits can be found in real estate, where you build structures from the ground up, and witness the gradual transformation of human lives that use these properties.”

Koh holds a Master of Business Administration, a Master of Science in Industrial and Operations Engineering, and a Bachelor of Science (Summa Cum Laude) in Aerospace Engineering from the University of Michigan.

He has nearly a quarter of a century of experience in investment, corporate finance and asset management, of which more than 16 years were in direct real estate, covering investments, developments, asset management and real estate private equity in the Asia Pacific region.

“Over the course of my career, which spanned several crises, including the bursting of the dot-com bubble and the Asian Financial Crisis, I have learned many lessons, such as saving for rainy days, maintaining robust cashflows, and prudent risk management,” Koh recalled.

“Learning is a lifelong process, and these lessons – big or small – help to shape who we are, and who we will be in the future. At the end of the day, change is the only constant, and it’s up to us to stay relevant.”

Koh was appointed Chief Executive of AIMS APAC REIT Management Ltd, the manager of AA REIT in January 2014. Prior to this appointment, he was the Head of Real Estate for the manager since October 2011, and its Senior Investment Manager since December 2008.

“During my career, I’ve been involved in office, residential and mixed-use developments, but my focus now is on industrial and light industrial properties, ranging from logistics facilities to warehouses and data centres,” he noted.

“These may not be your shiny, beautiful CBD Grade A office assets, but they are still the rear engine that keeps the economy humming, and are among some of the most resilient asset classes out there.”

AA REIT, previously known as MacarthurCook Industrial REIT (MI-REIT), listed on SGX in April 2007. During the 2009 Global Financial Crisis, MI-REIT was in dire financial straits when AIMS Financial Group acquired the distressed ASX-listed fund manager Macarthur Cook Ltd, which was owner of the manager of MI-REIT.

AIMS Financial Group is a diversified financial services and investment group, active in areas of mortgage lending, securitisation, investment banking, fund management, property investment, stockbroking and high-tech investment. AIMS Financial Group is also a strategic investor in the Sydney Stock Exchange.

Under AIMS Financial Group’s guidance as a Sponsor, and AIMS APAC REIT Management Ltd as its new manager, AA REIT was recapitalised, renamed, and turned around.

Raising Plot Ratios

Since then, AA REIT has grown significantly, with a market capitalisation of S$848.0 million and S$1.8 billion in total assets as at 30 September 2020.

It was established with the principal investment objective of owning and investing in a diversified portfolio of income-producing industrial, logistics, and business park real estate assets in the Asia-Pacific region.

The REIT’s existing portfolio comprises 28 properties, of which 26 are located throughout Singapore, with two in Australia – the first situated in Gold Coast, Queensland, and the other, its 49%-owned business park property Optus Centre, located in New South Wales.

To strengthen its portfolio for the long term, AA REIT will focus on asset enhancement initiatives, building out its properties with under-utilised plot ratios, and refurbishing older assets to ensure they remain contemporary and relevant.

It will also target the delivery of build-to-suit facilities for its tenants to help them grow and transform their businesses.

“Such organic growth strategies will help boost our rentals and total AUM value,” Koh said.

“Prospective tenants will naturally migrate to properties with better quality specs and facilities – that will help us lock-in longer dated leases, boost our portfolio occupancy rates, as well as improve our WALE,” he added, referring to weighted average lease expiry, a key industry yardstick.

The second prong of its growth strategy involves acquisitions. “A series of metrics will be used to analyse each opportunity, to see how they fit into the overall portfolio, including location, tenant profiles, and whether it is DPU-accretive – not just in the short term, but also over the long term,” Koh said, referring to distributions per unit, another closely watched sector benchmark.

AA REIT’s S$129.6 million acquisition of a logistics warehouse – 7 Bulim Street that was completed last month – is a case in point. “This deal will help us in the next stage of our growth,” he added.

With this purchase, AA REIT becomes the first industrial REIT with a presence in Singapore’s Jurong Innovation District, an advanced manufacturing campus with good connectivity to major expressways, as well as proximity to the future Tuas Mega Port and Tuas Checkpoint.

The inclusion of this modern, high-quality warehouse, 100% leased to a master tenant with a strong lease covenant, boosts AA REIT’s overall portfolio occupancy rate to 95.0%.

Shifting Demand Trends

Nevertheless, the REIT will continue to exercise prudence and caution in evaluating opportunities in the current environment. “We need to ensure that our capital management strategies are sound, as a robust balance sheet is required to support our growth efforts.”

Meanwhile, demand for industrial space, particularly for logistics and warehouse assets in Australia and Singapore, have proved resilient in the current environment, Koh said.

“More and more businesses have realised it’s critical to have a strong supply chain, and they cannot rely on a just-in-time inventory system – they need to stockpile or keep buffers for unexpected situations,” he added. “All these have driven overall demand for warehousing space from existing as well as new tenants.”

Demand patterns also continue to evolve, with information technology, biomedical and life sciences tenants seeking more business park space. “That’s where the new trends are,” Koh said.

“We’re keeping a close eye on JTC policies, which will provide clues on new segments that the government is focusing on,” he added, referring to Jurong Town Corporation, Singapore’s largest industrial landlord.

Nonetheless, navigating the REIT through a fluid environment brought about by the coronavirus pandemic is not without its challenges, Koh admitted.

“We’re adapting to the new normal, and steering in the direction that is relevant for all stakeholders,” he noted. “At the same time, we are trying to find meaningful and sustainable growth opportunities in this market.”

Another key focus for the REIT is managing relationships with its tenants and meeting their growth needs.

“Many of our tenants have been with us since our IPO, which was more than 12 years ago,” he added.

“We always tell them, ‘Focus on your core business, and let us take care of the real estate and real estate-related issues, so that you can achieve your best performance’. And when they perform well, we perform well too.”

When Koh is not managing the day-to-day operations of the REIT, he is spending time with his son and daughter, both in their pre-teens.

Apart from the principle of hard work, he wants his children to develop their moral compass early on. “This will equip them to make the right decisions in life,” he said.

“I also want them to understand the meaning of perseverance – because it’s always darkest before dawn – and to strive for excellence,” he added.

“The world is constantly evolving – they need to be able to keep ahead of the challenges and changes so as to deliver the best outcomes – for themselves as well as others around them.” 
 

AIMS APAC REIT

Managed by the Manager, AA REIT was established with the principal investment objective of owning and investing in a diversified portfolio of income-producing industrial, logistics and business park real estate, located throughout the Asia Pacific region. The real estate assets are utilised for a variety of purposes, including but not limited to warehousing and distribution activities, business park activities and manufacturing activities. AA REIT’s existing portfolio consists of 28 properties, of which 26 properties are located throughout Singapore, a property located in Gold Coast, Queensland, Australia and a 49.0% interest in one business park property, Optus Centre, which is located in Macquarie Park, New South Wales, Australia. 
AIMS Financial Group is the sole sponsor of AA REIT. Established in 1991, AIMS is a diversified financial services and investment group, active in the areas of mortgage lending, securitisation, investment banking, funds management, property investment, stock broking and high-tech investment. AIMS is also a strategic investor in the Sydney Stock Exchange.

The company website is: <a href="http://www.aimsapacreit.com/">www.aimsapacreit.com</a> 
Click <a href="https://www.sgx.com/securities/equities/O5RU">here </a>for the company's StockFacts page. 
For the three months ended 30 September 2020 financial results, click <a href="https://links.sgx.com/1.0.0/corporate-announcements/UG0QV4ZHZF6OA8FS/636490_AA_REIT_2Q_FY2021_Media_Release.pdf">here</a>.

 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations. 
For previous editions of kopi-C: the Company brew, please click <a href="https://www.sgx.com/research-education/market-dialogues">here</a>.   
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to <a href="///C:/Users/tanje/Downloads/jennifer.t@sgx.com">jennifer.t@sgx.com</a>.

 
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    AA REIT-CEO


Engineer by training Koh Wee Lih has always been fascinated by the constantly shifting dynamics of the real estate industry.

“The changing nature of property use and property development is something that appeals to me,” the CEO of the manager of SGX-listed AIMS APAC REIT (AA REIT) said with a smile.

“As an engineer, I enjoy creating and assembling things – these same traits can be found in real estate, where you build structures from the ground up, and witness the gradual transformation of human lives that use these properties.”

Koh holds a Master of Business Administration, a Master of Science in Industrial and Operations Engineering, and a Bachelor of Science (Summa Cum Laude) in Aerospace Engineering from the University of Michigan.

He has nearly a quarter of a century of experience in investment, corporate finance and asset management, of which more than 16 years were in direct real estate, covering investments, developments, asset management and real estate private equity in the Asia Pacific region.

“Over the course of my career, which spanned several crises, including the bursting of the dot-com bubble and the Asian Financial Crisis, I have learned many lessons, such as saving for rainy days, maintaining robust cashflows, and prudent risk management,” Koh recalled.

“Learning is a lifelong process, and these lessons – big or small – help to shape who we are, and who we will be in the future. At the end of the day, change is the only constant, and it’s up to us to stay relevant.”

Koh was appointed Chief Executive of AIMS APAC REIT Management Ltd, the manager of AA REIT in January 2014. Prior to this appointment, he was the Head of Real Estate for the manager since October 2011, and its Senior Investment Manager since December 2008.

“During my career, I’ve been involved in office, residential and mixed-use developments, but my focus now is on industrial and light industrial properties, ranging from logistics facilities to warehouses and data centres,” he noted.

“These may not be your shiny, beautiful CBD Grade A office assets, but they are still the rear engine that keeps the economy humming, and are among some of the most resilient asset classes out there.”

AA REIT, previously known as MacarthurCook Industrial REIT (MI-REIT), listed on SGX in April 2007. During the 2009 Global Financial Crisis, MI-REIT was in dire financial straits when AIMS Financial Group acquired the distressed ASX-listed fund manager Macarthur Cook Ltd, which was owner of the manager of MI-REIT.

AIMS Financial Group is a diversified financial services and investment group, active in areas of mortgage lending, securitisation, investment banking, fund management, property investment, stockbroking and high-tech investment. AIMS Financial Group is also a strategic investor in the Sydney Stock Exchange.

Under AIMS Financial Group’s guidance as a Sponsor, and AIMS APAC REIT Management Ltd as its new manager, AA REIT was recapitalised, renamed, and turned around.

Raising Plot Ratios

Since then, AA REIT has grown significantly, with a market capitalisation of S$848.0 million and S$1.8 billion in total assets as at 30 September 2020.

It was established with the principal investment objective of owning and investing in a diversified portfolio of income-producing industrial, logistics, and business park real estate assets in the Asia-Pacific region.

The REIT’s existing portfolio comprises 28 properties, of which 26 are located throughout Singapore, with two in Australia – the first situated in Gold Coast, Queensland, and the other, its 49%-owned business park property Optus Centre, located in New South Wales.

To strengthen its portfolio for the long term, AA REIT will focus on asset enhancement initiatives, building out its properties with under-utilised plot ratios, and refurbishing older assets to ensure they remain contemporary and relevant.

It will also target the delivery of build-to-suit facilities for its tenants to help them grow and transform their businesses.

“Such organic growth strategies will help boost our rentals and total AUM value,” Koh said.

“Prospective tenants will naturally migrate to properties with better quality specs and facilities – that will help us lock-in longer dated leases, boost our portfolio occupancy rates, as well as improve our WALE,” he added, referring to weighted average lease expiry, a key industry yardstick.

The second prong of its growth strategy involves acquisitions. “A series of metrics will be used to analyse each opportunity, to see how they fit into the overall portfolio, including location, tenant profiles, and whether it is DPU-accretive – not just in the short term, but also over the long term,” Koh said, referring to distributions per unit, another closely watched sector benchmark.

AA REIT’s S$129.6 million acquisition of a logistics warehouse – 7 Bulim Street that was completed last month – is a case in point. “This deal will help us in the next stage of our growth,” he added.

With this purchase, AA REIT becomes the first industrial REIT with a presence in Singapore’s Jurong Innovation District, an advanced manufacturing campus with good connectivity to major expressways, as well as proximity to the future Tuas Mega Port and Tuas Checkpoint.

The inclusion of this modern, high-quality warehouse, 100% leased to a master tenant with a strong lease covenant, boosts AA REIT’s overall portfolio occupancy rate to 95.0%.

Shifting Demand Trends

Nevertheless, the REIT will continue to exercise prudence and caution in evaluating opportunities in the current environment. “We need to ensure that our capital management strategies are sound, as a robust balance sheet is required to support our growth efforts.”

Meanwhile, demand for industrial space, particularly for logistics and warehouse assets in Australia and Singapore, have proved resilient in the current environment, Koh said.

“More and more businesses have realised it’s critical to have a strong supply chain, and they cannot rely on a just-in-time inventory system – they need to stockpile or keep buffers for unexpected situations,” he added. “All these have driven overall demand for warehousing space from existing as well as new tenants.”

Demand patterns also continue to evolve, with information technology, biomedical and life sciences tenants seeking more business park space. “That’s where the new trends are,” Koh said.

“We’re keeping a close eye on JTC policies, which will provide clues on new segments that the government is focusing on,” he added, referring to Jurong Town Corporation, Singapore’s largest industrial landlord.

Nonetheless, navigating the REIT through a fluid environment brought about by the coronavirus pandemic is not without its challenges, Koh admitted.

“We’re adapting to the new normal, and steering in the direction that is relevant for all stakeholders,” he noted. “At the same time, we are trying to find meaningful and sustainable growth opportunities in this market.”

Another key focus for the REIT is managing relationships with its tenants and meeting their growth needs.

“Many of our tenants have been with us since our IPO, which was more than 12 years ago,” he added.

“We always tell them, ‘Focus on your core business, and let us take care of the real estate and real estate-related issues, so that you can achieve your best performance’. And when they perform well, we perform well too.”

When Koh is not managing the day-to-day operations of the REIT, he is spending time with his son and daughter, both in their pre-teens.

Apart from the principle of hard work, he wants his children to develop their moral compass early on. “This will equip them to make the right decisions in life,” he said.

“I also want them to understand the meaning of perseverance – because it’s always darkest before dawn – and to strive for excellence,” he added.

“The world is constantly evolving – they need to be able to keep ahead of the challenges and changes so as to deliver the best outcomes – for themselves as well as others around them.”  
 

AIMS APAC REIT

Managed by the Manager, AA REIT was established with the principal investment objective of owning and investing in a diversified portfolio of income-producing industrial, logistics and business park real estate, located throughout the Asia Pacific region. The real estate assets are utilised for a variety of purposes, including but not limited to warehousing and distribution activities, business park activities and manufacturing activities. AA REIT’s existing portfolio consists of 28 properties, of which 26 properties are located throughout Singapore, a property located in Gold Coast, Queensland, Australia and a 49.0% interest in one business park property, Optus Centre, which is located in Macquarie Park, New South Wales, Australia. 
AIMS Financial Group is the sole sponsor of AA REIT. Established in 1991, AIMS is a diversified financial services and investment group, active in the areas of mortgage lending, securitisation, investment banking, funds management, property investment, stock broking and high-tech investment. AIMS is also a strategic investor in the Sydney Stock Exchange.

The company website is: www.aimsapacreit.com  
Click here for the company's StockFacts page.  
For the three months ended 30 September 2020 financial results, click here.

 

About kopi-C: the Company brew

Text: Jennifer Tan-Stanisic Photo: Company file  kopi-C is a regular column on the SGX Research website that features C-level executives of leading companies listed on Singapore Exchange. These interviews are profiles of senior management aimed at helping investors better understand the individuals who run these corporations.  
For previous editions of kopi-C: the Company brew, please click here.    
For more information, or if you would like your senior executives to be featured on SGX Market Dialogues, please send suggestions to jennifer.t@sgx.com.

 



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AIMS APAC REIT Builds on Expanding Industrial Demand

Engineer by training Koh Wee Lih has always been fascinated by the constantly shifting dynamics of the real estate...

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