In today’s briefing:
- NTT DC REIT IPO: Global Index Inclusions Later This Year + A Kicker
- StubWorld: Haw Par Looking Stretched
- REIT Watch – 10 S-REITs with lowest gearing ratios average 33.5% as investors await rate cuts
NTT DC REIT IPO: Global Index Inclusions Later This Year + A Kicker
- NTT DC REIT (NTTDCR SP) could raise up to US$824m in its IPO if the overallotment option is exercised and the stock is expected to start trading on 14 July.
- Cornerstone investors will own 16.8% of shares out following the IPO but there is no lock-up on these shares. The sponsor will own 20%/25% depending on whether overallotment is exercised.
- NTT DC REIT (NTTDCR SP) should be added to the smallcap segment of global indices in November and December while inclusion in local indices will take a lot longer.
StubWorld: Haw Par Looking Stretched
- Haw Par Corp (HPAR SP)‘s discount to NAV has narrowed to a multi-year low; and the implied stub and simple ratio (HPAR/UOB) are similarly elevated. Shares are, however, pretty illiquid.
- Preceding my comments on Haw Par – and Singapore Land Group (SPLG SP) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
REIT Watch – 10 S-REITs with lowest gearing ratios average 33.5% as investors await rate cuts
- The US Federal Reserve maintained its benchmark interest rate, with analysts predicting a 75 basis points cut in 2025.
- The S-REIT sector maintains an average gearing ratio of 40%, with the 10 lowest averaging 33.5%.
- Sasseur REIT reported a 25.9% gearing ratio in 1Q25, with a 1.6% year-on-year increase in RMB rental income.
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