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Friday, December 31, 2010

CacheLog secures another long-term end-user

CacheLog secures another long-term end-user:
Key Points
  • A highly regarded multinational corporation has committed to occupy approximately 280,000 sq ft, representing over 12% of the gross floor area, at CWT Commodity Hub for approximately nine years. 
  • The commitment means certainty of occupancy for the specific premises for four years beyond the present master lease. 
  • The agreement to lease from April 2015 to April 2019 has a rental value of S$20.0 million and is inclusive of additional rent for end- user specific asset enhancement works to be funded by Cache.
Related Posts


First Reit rights issue - Use of proceeds for MRCCC acquisition

First Reit rights issue - Use of proceeds for MRCCC acquisition:
Key Points
  • Out of the net proceeds of the Rights Issue of S$167.3 million, S$121.7 million has been used towards part financing the MRCCC Acquisition. Such use is in accordance with the stated use and in accordance with the percentage of the net proceeds of the Rights Issue allocated to such use. 
  • The remainder of the cost of the MRCCC Acquisition will be financed by way of a transferable term loan of up to S$50.0 million for a term of four years from Oversea-Chinese Banking Corporation Limited.

Related Posts


Issue and listing of new units in first reit for the rights issue

Issue and listing of new units in first reit for the rights issue:
Key Points
  • An aggregate of 345,664,382 Rights Units has been issued, bringing the total number of First REIT units (“Units”) in issue to 622,195,888 Units.
  • The Rights Units will, upon allotment and issue, rank pari passu in all respects with the existing Units in issue as at the date of issue of the Rights Units, including the right to any distributions which may accrue for the period from 1 October 2010 to 31 December 2010 as well as all distributions thereafter.
  • The Rights Units will be listed and quoted on the Main Board of Singapore Exchange Securities Trading Limited (the “SGX-ST”) with effect from 9.00 a.m. on 31 December 2010.
Author's Note
The newly issued units will also be eligible for the upcoming quarterly distribution from 1 Oct 2010 to 31 Dec 2010. The official completion of the 2 new acquisitions has not been announced. So far only the news of the Use of proceeds of rights issue for the MRCCC acquisition has been released. Since the earnings of the 2 new properties has not come in, the upcoming DPU is expected to be diluted. It will only be back to normal after the new properties start contributing their earnings.
Related Posts


Wednesday, December 29, 2010

First Reit - results of the rights issue

First Reit - results of the rights issue:
Key Points
  • Valid acceptances and excess applications for a total of 425,875,570 Right
    Units (as defined herein), representing approximately 123.2% of the total number of Rights Units available under the underwritten renounceable rights issue (the “Rights Issue”) of 345,664,382 new units in First REIT (“Rights Units”), were received as at the close of the Rights Issue on 22 December 2010.
  • The Manager expects that the Rights Units will be issued on or about 30 December 2010.
  • The Manager further expects that the Rights Units will be listed and quoted on the Main Board of the SGX-ST with effect from 9.00 a.m. on 31 December 2010.
Related Posts



Monday, December 27, 2010

MapletreeLog acquires N S Tang Building - 24 DEC 2010

Mapletreelog expands Singapore portfolio with another acquisition:
Key Points
  • MapletreeLog acquires N S Tang Building (the “Property”) located at 36 Loyang Drive, Loyang Industrial Estate, Singapore from N.S. Tang (Pte) Ltd (“N S Tang”) at a purchase price of S$13.8 million. 
  • The acquisition was signed and completed on 24 Dec 2010 upon receipt of JTC’s approval.
  • Strategic location and good building specifications for aerospace industry use.
  • Initial net property yield of 8% on a 5-year sale-and-leaseback arrangement with annual escalation.
  • With the addition of this Property, MapletreeLog's total portfolio will increase to 95 properties and its total book value to approximately S$ 3,471 million. 
  • This is the last of the four potential acquisitions identified in the recent equity fund raising exercise announced on 21 September 2010 and was
    funded from its net proceeds.
Related Posts



Thursday, December 23, 2010

Updated Target Price by DBS

Updated Target Price by DBS:

REIT Brokerage Recommendation Target Price (S$) Date
CacheLog DBS Vickers BUY 1.74 17/12/10
FrasersCT DBS BUY 1.11 17/12/10
MapleTreeLog DBS Vickers BUY 1.01 17/12/10
CDL H-Trust DBS Vickers BUY 2.28 17/12/10
CapitaMall DBS Vickers BUY 2.09 17/12/10
PLife DBS Vickers BUY 1.84 17/12/10
AscottReit DBS Vickers BUY 1.38 17/12/10

Latest updates at Stock Target Price.

Tuesday, December 21, 2010

K-Reit completes acquisition of 77 King Street

(I) COMPLETION OF ACQUISITION OF 77 KING STREET
(II) USE OF PROCEEDS FROM THE NOV 2009 RIGHTS ISSUE 
Key Points
  • Further to the announcement dated 19 July 2010 in relation to the acquisition of 100% interest in Lots 1, 3, 4 and 5, 77 King Street, Sydney, Australia (the “Acquisition”), the Acquisition has been completed.
  • The Acquisition was financed with S$19.4 million from K-REIT Asia’s rights issue in November 2009 (the “Rights Issue”) and additional borrowings. 
  • Such use of proceeds of the Rights Issue is in accordance with the stated use and the percentage of the proceeds allocated to such use.
  • As at the date of this announcement, the Manager has disbursed all the proceeds from the Rights Issue.
Related Posts


SUNTEC Reit announces details of Advanced Distribution

SUNTEC Reit announces details of Advanced Distribution.
Key Points
  • Advanced Distribution of 1.723 cents per unit in Suntec REIT (“Unit”) which comprises a taxable income component of 1.630 cents per Unit and a tax-exempt income component of 0.093 cents per Unit will be paid on 5 January 2011.
  • Unitholders of Suntec REIT whose securities accounts with The Central Depository (Pte) Limited are credited with Units as at 5.00 p.m. on 8 December 2010 will be entitled to the Advanced Distribution that will be paid on 5 January 2011.
  • The New Units issued under the Private Placement (as defined in the Announcement) and the Deferred Units (as defined in its announcement dated 9 December 2010) will not be entitled to the Advanced Distribution. 
  • All Units will be entitled to the distribution for the period from 9 December 2010 to 31 December 2010.
Related Posts



MapletreeLog completes of Acquisition of 44 & 46 Changi South Street 1, Singapore

MapletreeLog completes of Acquisition of 44 & 46 Changi South Street 1, Singapore.
Key Points
  • Further to its press release dated 2 December 2010 regarding the acquisition of the property at 44 & 46 Changi South Street 1, Singapore for a purchase price of S$16.8 million, Mapletree Logistics Trust Management Ltd., Mapletree Logistics has completed the acquisition on 20 Dec 2010.
  • The acquisition was fully funded by proceeds raised in the recent equity fund raising exercise announced on 21 September 2010 (“EFR announcement”). 
  • This was one of the Potential Acquisitions as identified in the EFR announcement.
Related Posts




Thursday, December 16, 2010

K-Reit completes acquisition of a one-third interest in MBFC Towers 1 & 2 and Marina Bay Link Mall - 15 DEC 2010

i) Completion of acquisition of a one-third interest in Marina Bay Financial Centre Towers 1 & 2 and Marina Bay Link Mall and divestment of Keppel Towers and GE Tower;
ii) Use of proceeds from K-Reit Asia’s November 2009 rights issue.
Key Points
  • The acquisition of a one-third interest in Marina Bay Financial Centre Towers 1 & 2 and Marina Bay Link Mall (including the assignment to K-REIT Asia of the loan made by Bayfront Development Pte. Ltd. to BFC Development Pte. Ltd.) (“BFC”) (the “MBFC Acquisition”) and the divestment of Keppel Towers and GE Tower (the “KTGE Divestment”, together with the MBFC Acquisition, the “Transactions”) has been completed on 15 DEC 2010.
  • In relation to the use of proceeds from K-REIT Asia’s rights issue in November 2009 (the “Rights Issue”), the board of directors of the Manager, wishes to announce that to-date, out of the net proceeds of approximately S$616.0 million from the Rights Issue less the utilisation of approximately S$555.1 million made prior to this announcement, S$41.5 million has been used to partly finance the MBFC Acquisition.
Related Posts


Moody’s rating for Suntec Reit - 15 DEC 2010

Moody’s rating for Suntec Reit:
Key Points
  • Moody's Investors Service has downgraded Suntec Real Estate Investment Trust's ("Suntec") corporate family rating to Baa2 from Baa1 and the senior unsecured ratings to Baa3 from Baa2. 
  • The outlook for both ratings is stable.
  • Moody’s recent rating review was initiated subsequent to the announcement of the acquisition of a one-third interest in the Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall (the “Acquisition”), which has been completed with partial funding by a S$1,105 million term loan facility, and the remainder funded by S$417.9 million of net proceeds derived from the private placement of 313,000,000 new units in Suntec REIT.
  • The downgrade reflects the substantially debt-funded acquisition of the one-third stake in MBFC, which will weaken Suntec's financial profile to levels more appropriately positioned at Baa2.
  • The final funding structure, with approximately 71% of the acquisition debt-funded, is expected to increase the trust's Debt/Total Assets to between 38-40% from 33%, after taking into account the use of the proceeds from the repayment of a shareholder's loan from One Raffles Quay Pte Ltd to reduce existing borrowings. 
  • On the other hand, Moody's recognizes that the transaction has long-term strategic benefits, and provides Suntec with a larger exposure to Grade A properties in Singapore. The acquisition will also enable greater income diversification, with net property income contribution from Suntec City Mall and Suntec City Towers estimated to reduce from 75.9% to 58.9%. The benefits of the acquisition to Suntec's business profile are thus significant.
  • Suntec's Baa2 corporate family rating is underpinned by the trust's stable and recurring cash flow streams derived from its quality properties. Although Suntec's assets are highly concentrated -- with an estimated 59% of its net property income coming from Suntec City after the acquisition of MBFC -- the situation is mitigated by its well-diversified and good quality tenants.
  • The stable outlook reflects Moody's expectation of continued stable cash flow generation from its portfolio, supported by high occupancy and rental revenues. It also includes the assumption of further long-term acquisitive growth, which affords Suntec greater flexibility at its current rating level.
Related Posts



Tuesday, December 14, 2010

SGX Shortens Time-To-Market for Secondary Fund Raising

SGX Shortens Time-To-Market for Secondary Fund Raising:
Key Points
  • Singapore Exchange announced measures to facilitate and shorten time-to-market for secondary fund raising. These measures will take effect from 1 January 2011 with amendments to the securities listing rules applicable to both the Mainboard and Catalist board. 
  • Temporary measures on fund raising were initiated in January and February 2009 to enable companies to raise capital efficiently under tight credit conditions during a global credit crunch. Following a public consultation and review conducted earlier this year, SGX will formalize a majority of the temporary measures in the interests of both shareholders and listed issuers.
  • The measures that will be effective from 1 January 2011 are as follows:
    1. Shortening the notice of books closure date from 10 to 5 clear market days;
    2. Allowing issuers to undertake non-renounceable rights issue without specific shareholders' approval, provided the rights shares are priced at a discount not exceeding 10%;
    3. Allowing issuers to issue scrip dividends without shareholders' approval, provided shareholders are given a cash option; and
    4. Introducing a new practice note in the Listing Manual to provide guidance on sub-underwriting arrangements, including the need to seek specific shareholders' approval where sub-underwriting fees are paid to controlling shareholders and substantial shareholders.
Author's Note
With the new measures, rights issue can now be undertaken without specific shareholders' approval if rights shares are priced at a discount not exceeding 10%. The discount is with respect to the weighted average price for trades done on the Exchange for the full market day on which the rights issue is announced. Looking back at the rights issue exercises of Reits for the past couple of years, I cannot recall any with discount of less than 10%.

The pricing of rights shares is a very tricky business. Pricing it too low may result in the need to issue more new units in order to raise a certain amount of money, thereby diluting the per unit metrics such as distribution per unit and NAV per unit by a greater extent. Pricing it too high may discourage the existing share holders to subscribe to the rights shares. This may in turn result in the sponsor of the Reit having to take up the excess rights.

From the perspective of the Reit, it is more favourable for the price of rights shares to be as high as possible as more money can be raised for the same number of new units issued. Pricing it too low may have a long term impact on the per unit metrics of the Reit, as the Reit will have less money to make use of to bring up the per unit metrics.

There has been a number of successful private placement exercises with discounts of less than 10%.  These private placement exercises generally do not have much impact on the per unit metrics as the percentage increase in share base is very low. The Reit can thus raised the money for acquisition of new properties without causing too much dilution of the per unit metrics. Only thing about the private placement exercises is that unlike the rights issue, they are not open to all the existing share holders. With the new measure, it may be possible for the Reit to conduct more regular rights issue with discounts of less than 10%, and at a smaller percentage increase in share base similar to the private placement exercises.




Updated Target Price by OCBC for various Reits

Updated Target Price by OCBC:

REIT Recommendation Target Price (S$) Date
AscendasReit HOLD 2.210 10/12/10
AscottReit BUY 1.380 10/12/10
CapitaComm HOLD 1.520 10/12/10
CapitaMall HOLD 2.050 10/12/10
FrasersComm BUY 0.180 10/12/10
FrasersCT HOLD 1.500 10/12/10
LippoMapleTrust BUY 0.590 10/12/10
MapleTreeLog BUY 1.000 10/12/10
Starhill Gbl BUY 0.660 10/12/10
Suntec HOLD 1.500 10/12/10
 
Latest updates at Stock Target Price.

Extension of HGB title for Mochtar Riady Comprehensive Cancer Centre

Extension of HGB title for Mochtar Riady Comprehensive Cancer Centre (MRCCC):
Key Points
  • This announcement is further to:
    • the announcement dated 9 November 2010 in which Bowsprit Capital Corporation Limited,in its capacity as manager of First Real Estate Investment Trust (“First REIT” and asmanager of First REIT, the “Manager”), proposed the acquisition by First REIT of MochtarRiady Comprehensive Cancer Centre (“MRCCC” and the proposed acquisition of MRCCC,the “MRCCC Acquisition”) subject to, among others, the condition precedent that the in-principle approval for the renewal of the “Right to Build” (Hak Guna Bangunan or “HGB”1)title in relation to MRCCC be obtained from Badan Pertanahan Nasional (or the NationalLand Office of Indonesia).
    • the circular dated 10 November 2010 issued to unitholders of First REIT (“Unitholders”) to seek Unitholders’ approval for, among others, the MRCCC Acquisition.
    • the approval by Unitholders of the MRCCC Acquisition at First REIT’s Extraordinary General Meeting on 29 November 2010.
  • the National Land Office of Indonesia has extended the HGB title in relation to MRCCC (which was scheduled to expire on 27 August 2015) for a period of 20 years subject to, among others, the payment of a nominal premium and certain other standard conditions, and therefore the condition precedent described above has been satisfied. 
  • The amount of premium payable is approximately 193.2 million Indonesian Rupiah (approximately S$28,006.252) and is payable by the vendor of MRCCC. 
Related Posts



Friday, December 10, 2010

Singapore commercial property rents to rise 15-20% next year: CBRE

Singapore commercial property rents to rise 15-20% next year: CBRE:

Source of News

Singapore's commercial property sector will likely see a 15-20 per cent increase in rental values next year, after a 22 per cent growth this year, according to CBRE.

This will be driven by strong occupier demand for office space in Singapore despite plenty of supply coming on stream.

CBRE points to the Marina Bay Financial Centre (MBFC) as one example of strong demand. The first phase of MBFC was fully let out by the time its doors opened this year.

The property consultant said the supply pipeline is reasonable next year, with over 5 million square feet of office space currently under construction in the central business district. Half of the supply has already found tenants.

"From a relative standpoint, Singapore is quite competitive in terms of office occupation costs... Hong Kong office space is commanding almost double the rents Singapore is currently set at, so I think there is room for rental growth in Singapore, without it becoming uncompetitive," said Moray Armstrong, Executive Director, Office Services, CBRE.


Related Posts



SUNTEC Reit completes acquisition of a one-third interest in MBFC Towers 1 and 2, and the Marina bay Link Mall - 9 DEC 2010

SUNTEC Reit completes acquisition of a one-third interest in MBFC Towers 1 and 2, and the Marina bay Link Mall:
Key Points
  • SUNTEC Reit completes acquisition of a one-third interest in MBFC Towers 1 and 2, and the Marina bay Link Mall on 9 DEC 2010.
  • The Acquisition was partly financed with a S$1,105 million term loan facility entered into with Citibank, DBS Bank and Standard Chartered Bank, and partly financed with S$417.9 million of net proceeds derived from the private placement of 313,000,000 new units in Suntec REIT (“New Units”) at an issue price of S$1.37 per New Unit.
  • With this acquisition:
    • Suntec REIT’s office portfolio NLA has increased from approximately 1.9 million sq ft to approximately 2.4 million sq ft.
    • further strengthened its foothold in the Marina Bay precinct.
    • the value of Suntec REIT’s assets under management has increased to approximately S$6.8 billion.
Related Posts 




Thursday, December 9, 2010

SUNTEC Reit issues final tranche of 34,500,360 deferred units - 9 DEC 2010

SUNTEC Reit issues final tranche of 34,500,360 deferred units.
Key Points
  • 34,500,360 units in Suntec REIT (the “Deferred Units”) has been issued to Suntec City Development Pte Ltd, the last of six instalments of deferred units in Suntec REIT in part satisfaction of the purchase consideration for Suntec REIT’s initial portfolio of properties in its initial public offering.
  • With this issue of Deferred Units, together with the private placement of 313,000,000 new units in Suntec REIT (the “New Units”) issued at an issue price of S$1.37 per New Unit (the “Private Placement”) today, the total number of units in Suntec REIT (“Units”) in issue is 2,194,862,143.
  • The Deferred Units and New Units will commence trading on the Main Board of Singapore Exchange Securities Trading Limited (the “SGX-ST”) at 2.00 p.m. today.
Related Posts


SUNTEC Reit issues 313,000,000 new units for Private Placement - 9 DEC 2010

SUNTEC Reit issues 313,000,000 new units for Private Placement.
Key Points
  • Further to its announcements dated 29 November 2010 in relation to the private placement of 313,000,000 new units (“New Units”) in Suntec REIT at an issue price of S$1.37 per New Unit (the “Private Placement”), the Board of Directors of ARA Trust Management (Suntec) Limited, in its capacity as manager of Suntec REIT (the “Manager”), wishes to announce that the Manager has today issued the New Units. The New Units will commence trading on the Main Board of Singapore Exchange Securities Trading Limited
    (the “SGX-ST”) at 2.00 p.m. today.
  • The New Units issued pursuant to the Private Placement will, upon issue, rank pari passu in all respects with the Suntec REIT units in issue immediately prior to the issue of the New Units (“Existing Units”), other than in respect of the Advanced Distribution (as defined herein).
Related Posts



K-Reit Updated Target Price

K-Reit Updated Target Price:

CIMB UNDERPERFORM 1.43 19/10/10


Latest updates at Stock Target Price.

Related Posts


Wednesday, December 8, 2010

MapletreeLog Realises Value on Divestment of Singapore Property for S$12.5 million - 7 DEC 2010

MapletreeLog Realises Value on Divestment of Singapore Property for S$12.5 million.
Key Points
  • MapletreeLog has entered into an agreement to divest its property at 9 Tampines Street 92, Singapore 528871 (the “Property”) to Trans-cab Services Pte Ltd (“Trans-cab”) for a total consideration of S$12.5 million.
  • Based on the latest valuation as at 1 December 2010 by Colliers International (Singapore) Pte Ltd, the Property is valued at S$12 million.
  • Originally acquired at S$11.2 million, MapletreeLog is expected to realise a total net disposal gain of S$1.2 million with the divestment of this Property, after deducting transaction related costs and expenses. 
  • The sale is subject to approval by HDB and is expected to complete by 1Q 2011.
  • Upon completion of this divestment, MapletreeLog’s total portfolio will stand at 94 properties with a book value of approximately $3,457 million.  
Author's Note
According to the CEO of Mapletree Logistics Trust Management Ltd, the Property is one of the older assets, its building specifications are now a little outdated and offer limited growth to the portfolio. Following the disposal of the Property, the original capital can be redeploy for newer assets that can generate a better yield.

Related Posts


Moody's upgrades CapitaCommercial Trust's ratings to Baa1 - 8 DEC 2010

Moody's upgrades CapitaCommercial Trust's ratings to Baa1; outlook stable.  
Key Points
  • Moody's Investors Service has upgraded CapitaCommercial Trust's ("CCT") corporate family rating to Baa1 from Baa2 and the senior unsecured ratings to Baa2 from Baa3. The outlook for both ratings is stable.
  • The upgrade reflects CCT's operating and financial strength, as evidenced by its strong, predictable cash flows and high occupancy rates over the 2008/09 economic downturn.
  • CCT's track record and prudent approach towards managing its capital structure and pursuing its acquisitions also help maintain a strong and stable financial profile.



Monday, December 6, 2010

First Reit - Lodgement and despatch of offer information statement - 6 DEC 2010

First Reit - Lodgement and despatch of offer information statement.
Key Points
  • The manager of First REIT has today lodged with the MAS the offer information statement (“Offer Information Statement”) in relation to the issue of 345,664,382 new units in First REIT on a fully underwritten and renounceable basis to Eligible Unitholders on a pro rata basis of five Rights Units for every four existing Units held as at 5.00 p.m. on 3 December 2010 at the issue price of S$0.50 per Rights Unit, fractional entitlements to be disregarded, to raise gross proceeds of approximately S$172.8 million.
  • The Offer Information Statement is available on the website of the MAS at www.mas.gov.sg and will be despatched on 8 December 2010 to Eligible Unitholders.
Author's Note
For holders of the rights, do take note of the IMPORTANT DATES AND TIMES as indicated in the guidelines and OIS: 

Last date and time for trading of Rights Entitlements 16 December 2010 at 5.00 p.m.
Last date and time for acceptance of Rights Entitlements and payment for Right Units 22 December 2010 at 5.00 p.m. (9.30 p.m. for Electronic Applications through ATMs of Participating Banks)
Last date and time for application and payment for Excess Rights Units 22 December 2010 at 5.00 p.m. (9.30 p.m. for Electronic Applications through ATMs of Participating Banks)

The Offer Information Statement can also be found in the MAS Opera site. Look under the category Collective Investment Scheme Offers, and click on the Latest link.

Related Posts


Friday, December 3, 2010

CDL Hospitality Real Estate Investment Trust obtains ‘BBB-’ Investment Grade Rating Affirmation by Fitch Ratings - 3 DEC 2010

CDL Hospitality Real Estate Investment Trust obtains ‘BBB-’ Investment Grade Rating Affirmation by Fitch Ratings.
Key Points
  • M&C REIT Management Limited, as manager of CDL Hospitality Real Estate Investment Trust (“H-REIT”) (the “H-REIT Manager”), wishes to announce that H-REIT has received a rating affirmation of investment grade Long Term Issuer Default Rating of ‘BBB-’ (BBB minus) by Fitch Ratings on 3 December 2010, with a Stable Outlook maintained.



Mapletreelog acquires singapore property for S$16.8 million - 2 DEC 2010

Mapletreelog acquires singapore property for S$16.8 million.
Key Points
  • The Manager of MapletreeLog has signed a Put and Call Option Agreement today with JEP Precision Engineering Pte Ltd (the “Vendor”), to acquire its premises at 44 & 46 Changi South Street 1, Singapore (the “Property”) at a purchase price of S$16.8 million.
  • The Property comprises two connected single-storey air-conditioned warehouses and an ancillary office. Highly accessible from the Pan-Island Expressway and the East Coast Parkway, the Property is also a 5-minute drive from Changi International Airport.
  • The Vendor will lease back the Property for a period of 7 years with an option to extend for a further term of 7 years and rental escalation of 3.75% at the beginning of year 3, 5 and 7.
  • The acquisition provides an initial net property yield of 8.7% and the land lease has a balance of 26 years.
  • With the addition of this Property, MapletreeLog's total portfolio will increase to 95 properties and its total book value to approximately S$ 3,446 million. 
  • The acquisition is subject to approval by JTC and is expected to complete by December 2010. 
  • This is the third of the four potential acquisitions identified in the recent equity fund raising exercise announced on 21 September 2010 and will be funded from its net proceeds.
Related Posts



Wednesday, December 1, 2010

SUNTEC Reit Updated Target Price following Completion of Private Placement

SUNTEC Reit Updated Target Price following Completion of Private Placement:

CIMB OUTPERFORM 1.630 30/11/10
Phillip Securities HOLD 1.370 01/12/10


Tuesday, November 30, 2010

Cambridge completes acquisition of 511 and 513 Yishun Industrial Park A - 30 NOV 2010

Cambridge completes acquisition of 511 and 513 Yishun Industrial Park A.
Key Points
  • Completion of the acquisition of the property located at 511 and 513 Yishun Industrial Park A, Singapore 768768 and 768736 respectively.
  • Use of proceeds from the private placement and preferential offering of S$21.8 m for part payment of the purchase price for 511 & 513 Yishun Industrial Park A and estimated acquisition costs.
Related Posts


Monday, November 29, 2010

Starhill Gbl, MapleTreeLog Updated Target Price

Starhill Gbl, MapleTreeLog Updated Target Price:
Starhill Gbl Kim Eng BUY 0.800 25/11/10
MapleTreeLog OCBC BUY 1.000 23/11/10

Latest updates at Stock Target Price.


Suntec Reit successfully raised S$428.8 million through private placement - 29 NOV 2010

Suntec Reit successfully raised S$428.8 million through private placement:
Key Points
  • Private placement of 313 million new units in Suntec REIT have been fully subscribed at an issue price of S$1.37 per New Unit. 
  • The Issue Price represents a discount of 4.02% to the volume weighted average price of S$1.4274 per unit in Suntec REIT and 2.88% to the adjusted volume weighted average price of S$1.4106 per Unit for trades done for the full market day on 26 November 2010.
  • The net proceeds from the Private Placement which amount to approximately S$417.9 million will be used to partially finance the acquisition of a one-third interest in Marina Bay Financial Centre Towers 1 and 2 and the Marina Bay Link Mall. 
  • The Manager has on 26 November 2010 obtained the approval of unitholders of Suntec REIT at an extraordinary general meeting for the Acquisition.
  • In connection with the Private Placement, existing Unitholders will be entitled to receive a distribution income for the period from 1 October 2010 to the day immediately prior to 9 December 2010, being the expected date on which the New Units are issued pursuant to the Private Placement. 
  • The New Units are not entitled to the Advanced Distribution. 
Author's Note
The book closure for the advanced distribution will be at 5.00 p.m. on 8 December 2010. The actual quantum of the distribution per Unit under the Advanced Distribution will be announced at a later date. The next distribution thereafter will comprise Suntec REIT’s distributable income for the period from the day the New Units are issued (9 December 2010) to 31 December 2010. Quarterly distributions will resume thereafter.

Earlier part of the day the manager has announced the private placement with the range of issue price between S$1.34 and S$1.38 per New Unit. The final issue price S$1.37 is towards the top of the range. The Private Placement was 3.1 times oversubscribed.

Related Posts


MapletreeLog Expands Singapore Portfolio with Acquisition of Liang Huat Building - 26 NOV 2010

MapletreeLog Expands Singapore Portfolio with Acquisition of Liang Huat Building.
Key Points
  • The Manager of MapletreeLog has signed a Sale and Purchase agreement and completed the acquisition of the Liang Huat Building at 51 Benoi Road, Singapore at a purchase price of S$55 million.
  • The Property comprises six blocks of industrial warehouses, including two ancillary buildings. 
  • Strategically located in the Jurong area near the Joo Koon MRT station, it is also well-connected to the Ayer Rajah and Pan Island Expressways.
  • The acquisition provides an initial net property yield of 7.8%.
  • The vendor, Khai Wah Development Pte Ltd, is a wholly owned subsidiary of Ho Lee Group Pte Ltd (“Ho Lee Group”).
  • Currently, 40% of the Property is occupied by companies within the Ho Lee Group while the balance is leased to third parties.
  • The vendor will provide rental income guarantee for existing leases that are
    deemed to be below that of the market in the vicinity. 
  • The rental guarantee has a yearly escalation of 2% for a period of 5 years. 
  • Outgoings such as land rent, property tax and property maintenance of this multi-tenanted facility will also be borne by the vendor during this period.
  • With the addition of this Property, MapletreeLog’s total portfolio will increase to 94 properties with a book value of approximately $3.4 billion.
  • This acquisition is funded with the proceeds from the recent equity fund raising exercise announced on 21 September 2010 (“EFR Announcement”). 
  • This acquisition was one of the four potential acquisitions identified in the EFR Announcement and the second acquisition of the four to be completed.
Related Posts



Sunday, November 28, 2010

All about REIT - The IPO Prospectus

In recent weeks we have seen an increase in the number of companies going for IPO. The most notable ones being that of Global Logistics Properties (GLP) and Mapletree Industrial Trust (MIT), which are linked to GIC and Temasek Holdings respectively. Just last week, we were looking at the listing of Sabana Reit, the first Shari'ah Compliant Reit in SGX.

For an IPO, the main avenue for retail investors to access and evaluate a company will be the IPO prospectus. However, it is very unlikely for someone to read the whole IPO prospectus because it is usually a few hundred pages thick. For example, the IPO prospectus for Sabana Reit comes with a whopping 480 pages! So what shall we look out for in an IPO prospectus? I will be sharing here some of the main items I will look at in the IPO prospectus for a Reit. Though the sharing here is Reit-centric, I think most of the things should apply equally well for the IPO of normal companies. I shall use the IPO prospectus of Sabana Reit as a reference here.

Where to Find the IPO Prospectus
First and foremost is of course where to get hold of the IPO prospectus. I remember few years back when I was working near the SGX centre, I will frequently see a desk being placed outside, with a staff manning a few hundred copies of the IPO prospectus whenever there is an impending IPO. Thanks to the advent of technology, now we no longer need to go all the way to SGX centre to carry back the very thick prospectus. With the MAS Opera site, we can easily download the PDF copy of the prospectus through the internet. You can easily find the MAS Opera site by googling for the phrase "MAS Opera". The site should appear right at the top or near the top.

Once you are in the main page of the MAS Opera site, you should be able to see a category called "Collective Investment Scheme Offers". The IPO prospectus for Reits can be found under this category. This category also includes prospectus of Unit Trusts to be launched by Fund Houses. For normal companies you should look under the category "Share Offers".

Preliminary and Final Prospectus
When a company or a Reit has announced its intention for listing, it will usually lodge a preliminary IPO prospectus with the Monetary Authority of Singapore (MAS) first. When its nearer to the IPO date, the final prospectus will be lodged. There shouldn't be too much differences in the contents, except that the final prospectus should provide details of the important dates for the IPO, such as the subscription period and listing date. Both the Preliminary and Final Prospectus can be found in the MAS Opera site.

The Cover Pages
Without even going into the main contents IPO prospectus, the cover and the first few pages alone will usually give you a general idea about the company/Reit. For the Sabana Reit prospectus, it has provided in its cover pages the summary information about its IPO price, number of units to be issued, its nature of business, its strategies, the projected yield, the indicative timetable, etc.

Use of Proceeds
We should get some idea of what the proceeds raised for the IPO will be used for. Other than for acquisition of the initial properties from the Sponsor, sometimes it may also be used for initial debt payment, which is the case for Mapletree Industrial Trust.

For Sabana Reit, the details of the Use of Proceeds can be found in Pg 75. Most of the proceeds of about S$885 million will go into Acquisition of the Properties, with about S$34 million as transaction costs.

Projected Yield
The projected yield is a very important information for Reits and it will usually be provided in the prospectus, as it is mandatory for Reits to distribute at least 90% of its distributable income. The projected yield is calculated based on the IPO offer price of the Reit. For IPO prospectus of normal companies, this information may not be provided as some companies may be more focused on growth, and thus the dividend payout may not be that predictable.

In the Sabana Reit prospectus, the projected yield can be found in the cover pages, and more details are provided in the "PROFIT FORECAST AND PROFIT PROJECTION" section on Pg 36. The projected yields for Sabana Reit are 8.22% and 8.25% for 2010 and 2011 respectively, based on the issue price of S$1.05. This information can then be used to compare with yields of other Reits, preferably in the same sector, i.e. industrial Reits.

Initial Gearing
Sometimes comparing yield with other Reits alone is not sufficient. We should also compare the gearing. Gearing is defined as the debt over the total assets.
The gearing may not be provided in a standard section in the prospectus. You can search for key words like "Gearing" or "Aggregate Leverage" to find it.

For the Sabana Reit prospectus, the gearing or aggregate leverage can in fact be found in quite a number of places. One such place will be the section on "Capital structure that provides stability and future financing flexibility". Here the figure provided is 26.5%. This is lower than most of the industrial Reits, which are around 30 to 39%.

Sponsor
The sponsor of the Reit may not be something quantifiable like the yield or gearing, but it does give us an idea of how well the Reit can be supported in times of need. Market may give the Reit a premium by virtue of its sponsor. Most of the earlier Reits have sponsors that are either listed blue chip companies (Capitaland, Keppel Land) or government linked private companies (Mapletree Holdings). Recently we are seeing listing of Reits by smaller players such as CWT, sponsor of Cache Logistics Trust.

In the prospectus for Reits, there is usually a section about the Sponsor. For the Sabana Reit prospectus, it can be found on Pg 160. The sponsor of Sanaba Reit is Freight Links Group, a leading international total logistics solutions provider with a strong presence in Singapore and the Asia Pacific region. It is also listed in the SGX mainboard, though many may not be familiar with it before the IPO of Sabana Reit.

NAV per Unit
The NAV per unit is usually used to compare with the share price of the unit to determine how much it is in discount or in premium. The IPO price is usually higher than the NAV per unit. It may not be favourable if the price has too much premium over the NAV per unit. You may also need to compare with the market whether Reits are generally trading in premium or discount, and by how much.

For Sabana Reit the NAV per unit is S$0.99. This can be found in the section "UNAUDITED PRO FORMA BALANCE SHEET AS AT THE LISTING DATE" on Pg 35. The IPO price of S$1.05 is at about 6% premium.

Pro Forma Financial Statements
The Pro Forma statements will help you have a rough idea of how the Reit is going to be performing after IPO, like what is the net profit is going to be like based on the initial portfolio of properties. But you must take note of the assumptions made in the prospectus in coming out with the figures. The Reit may not perform as indicated in the Pro Forma statements as they are after all derived based on the assumptions made.

Others
Although the above figures and information are important to look at in the prospectus, it doesn't mean that other information is not important. If time allows, you should try to cover as much of the prospectus as possible. Items such as Risk factors are definitely worth a look in helping to evaluate the IPO. It will be good if you can look for external sources of information about the Reit and its sponsor, such as any analyst report about the IPO to get a better picture.

Now the above figures are primarily useful for comparing with Reits of similar nature in the market. They are not useful for predicting the opening price on the listing day, as that is usually sentiments driven. Personally I find that compared to normal companies, it is easier to gauge whether the price of a Reit has run up too much on listing day, as its yield cannot be too far off from its peers in the market.

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Thursday, November 25, 2010

SABANA REIT - Admission of 632,800,000 units to the Official List of SGX-ST

SABANA SHARI'AH COMPLIANT REIT - Admission of 632,800,000 units to the Official List of SGX-ST.

Press Release

Key Points
  • Admission of 632,800,000 units of Sabana Reit to the Official List of SGX-ST.
  • Trading in the units is expected to commence on "Ready" basis with effect from 2.00 p.m., Friday, 26 November 2010.
  • The short name is "Sabana REIT"and abbreviated name is "SABREIT".
Author's Note
The first Shari'ah Compliant Reit in SGX will commence trading tomorrow from 2.00 p.m. The counter is already available in the SGX website, with a code of M1GU.

Some of you may remember a couple of old news sometime back about plans for the first Shari'ah Compliant Reit in SGX. First was non other than Cambridge Industrial Trust. The manager was contemplating to convert the Reit into a Shari'ah Compliant Reit in early 2009. One of the reasons given was also about attracting investors from the Middle East. I remember there was even a report about the Reit being already more than 90% compliant. However, there was no subsequent follow-up about the plan. If it has gone ahead, Cambridge would have become the first Shari'ah Compliant Reit.

The other was a partnership agreement between ARA Asset Management and  Qatar-based Regency Group to jointly manage a Shariah-compliant REIT made up of mainly hospitality properties. It was announced at the end of 2009, and the plan was to list the Reit in the second half of 2010. Right now we are still in the second half of 2010, and there is still a possibility of the Reit being listed by 2010. Only thing is that with the listing of Sabana Reit, it will no longer be the first Shari'ah Compliant Reit as originally planned. But it will still be the first Shari'ah Compliant hospitality Reit (Sabana Reit is in the industrial sector). Anyway it remains to be seen whether these Shari'ah Compliant Reits will really be effective in attracting investments from the rich middle eastern countries.

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First Reit - Notice of Rights Issue Books Closure Date

First Reit - Notice of Rights Issue Books Closure Date.

Press Release

This is further to the announcement dated 10 November 2010 about the rights issue exercise and acquisition of 2 properties in Indonesia.

Key Points
  • The book closure date will be on 3 December 2010 at 5.00 p.m. for the purpose of determining the provisional allotments of Rights Units of Eligible Unitholders under the Rights Issue.
  • Eligible Unitholders whose securities accounts with CDP are credited with Units on 3 December 2010 at 5.00 p.m. will be entitled to participate in the Rights Issue.
  • The Rights Issue exercise is subject to approval by Unitholders at the extraordinary general meeting of Unitholders to be held on Monday, 29 November 2010.
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Tuesday, November 23, 2010

AIMSAMPI Reit Market Update - 23 NOV 2010

AIMSAMPI Reit Market Update. See press release.

Key Points
  • Sale of 23 Changi South Avenue 2 Singapore above book value.
  • Signing of three long term leases with high quality tenant at 23 Tai Seng Drive Singapore.
  • 100% occupancy achieved at 15 Tai Seng Drive Singapore.
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FrasersComm, SUNTEC Updated Target Price

FrasersComm, SUNTEC Updated Target Price:

FrasersComm OCBC BUY 0.170 23/11/10
Suntec OCBC BUY 1.630 19/11/10

Latest updates at Stock Target Price.


Monday, November 22, 2010

A-Reit explores regional investment opportunities - 22 NOV 2010

A-Reit explores regional investment opportunities. See press release.

Key Points
  • A-REIT will be expanding its investment scope to cover the Asia region.
  • Currently, the Manager is actively exploring investment opportunities in China and has set up a representative office in Shanghai, China to enhance the Manager’s visibility in the various business space sub-segments and micro property markets.
  • A-REIT’s portfolio will remain predominantly Singapore-based assets in the foreseeable future.
Author's Note
To date, all the properties of A-Reit are located in Singapore. It is also the only S-Reit to date to have undertaken development projects. The scope of the development projects are also in Singapore, subject to a cap of 10% of its total asset value by MAS regulation. The positive point about the expansion of its investment scope will be more investment opportunities will be opened up, as there may be very limited opportunities left in Singapore. Its sponsor, Ascendas Pte Ltd, has a real estate portfolio that includes science, business and industrial parks in countries such as India, China, South Korea, Vietnam, Malaysia and the Philippines. These can be potential targets for injection into A-REIT in the future. Of course the move also subject the Reit to other types of risks, currency risk being an example.

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Friday, November 19, 2010

Cambridge issues and list 38,483,354 new units pursuant to the preferential offering - 18 NOV 2010

Cambridge issues and list 38,483,354 new units pursuant to the preferential offering. See press release.

Key Points
  • This announcement is in relation to CIT’s equity fund raising comprising:
    • The private placement of 56,498,000 new units in CIT at an issue price of  S$0.531 per Placement Unit to raise gross proceeds of approximately S$30.0 million.
    • The pro-rata and non-renounceable preferential offering of 38,483,354 new units in CIT on the basis of one Preferential Unit for every twenty-five existing units in CIT held by Entitled Unitholders1 as at 5.00 p.m. on 29 October 2010, fractions of a Preferential Unit to be disregarded, at an issue price of S$0.531 per Preferential Unit to raise gross proceeds of approximately S$20.4 million.
  • The Manager wishes to announce that the issuance of the Preferential Units has been completed on 18 Nov 2010. With the issuance of the Preferential Units, the total number of Units in issue has increased to 1,057,065,216 Units.
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Cambridge Notice of Advanced Distribution - 18 NOV 2010

Cambridge Notice of Advanced Distribution. See press release.

This is a follow up of the earlier announcement dated 21 October 2010 relating to the Equity Fund Raising and acquisitions.

Key Points
  • Distribution of the distributable income for the period from 1 October
    2010 to 17 November 2010 in advance.
  • Advanced Distribution of 0.627 cents per Unit in cash will be paid on 6 December 2010.
  • Unitholders whose securities accounts with The Central Depository (Pte) Limited were credited with Units as at 5.00 p.m. on 29 October 2010 will be entitled to the Advanced Distribution.
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Monday, November 15, 2010

The Expanded First Reit Post Rights Issue and Acquisitions

First Reit has announced its proposed acquisitions of 2 Jakarta hospitals, and 5 for 4 rights issue on 9 Nov 2010, followed by more details on 11 Nov 2010. I have come across a couple of blog articles with the analysis of the rights issue and acquisitions in details, and have provided the links under the "Related Links" section below. I shall not be going through the numbers in details here, but will be taking a broader view of the whole exercise and also some additional points. Before that, for those who are new to First Reit, following are some background information.

Background
First Reit is a healthcare reit which has a portfolio of mainly hospitals and a hotel in Indonesia. It also owns some nursing homes and a hospital in Singapore. Its sponsor is the Lippo Group, which also co-sponsored the LippoMaple Indonesia Trust, an Indonesian retail reit, with Mapletree Pte Ltd, a fully owned subsidiary of Temasek Holdings. Following is a brief description of the Lippo Group:

"The Lippo Group is a major Indonesian conglomerate founded by its Chairman, Dr. Mochtar Riady in the 1950s. It consists of private and public companies in China mainland, Hong Kong and Macau; Indonesia, Philippines, Singapore and South Korea with US$11 billion in assets. Lippo Group has over 15 public-listed companies in different parts of Asia including Hong Kong, Indonesia and Singapore."

Developments Since 2009
First Reit has been rather quiet for the past 2 years. Other than some asset enhancement works, it has not undertaken any major moves such as acquisition of new properties that would have made significant impact on its DPU. Thus its DPU has been rather stable from quarter to quarter around 1.9 cents since 2009. Its stock price has also not been moving up as quickly as most of the other s-reits, and because of that its dividend yield has consistently been one of the top among the s-reits. Recently its share price has seen a very impressive surge, closing at a all time high of 0.980 cents on 8 Nov 2010, just a day before the release of the acquisitions and rights issue announcement. On 9 Nov 2010, the reit announced the proposed acquisitions of 2 Jakarta hospitals as well as a 5 for 4 rights issue. The details can be found under the "Related Posts" below.

What is the effect of the acquisition and rights exercise?
At first glance the whole exercise does not seem to be very favourable for the reit. The 5 for 4 rights issue is going to more than double the share base, and at a relatively cheap price of S$0.50. The gearing as at 30 Sep 2010 was 16.5%, which is at a very low level. Doesn't it make more sense to finance the acquisitions primarily by debt, with a smaller scale rights issue or private placement that is going to have less impact on the share base?

If we take a closer look at the total asset value of the reit as at 30 Sep 2010, we will find that there is very little room for the reit to borrow much without hitting the gearing limit. The total asset is only S$346.1m. To my knowledge, at the time of this writing First Reit does not having a rating by Fitch, Moody's or S&P, which means that it can only gear up to 35%. So financing primarily by debt will leave the reit with less choices as acquisition targets, as it can only look for acquisitions of smaller scale. Furthermore, even a smaller scale acquisition can easily drive up its gearing close to the gearing limit because of its low asset base.

The management may have wanted to make use of the recent positive reaction to equity raising exercises like rights issue, private placement and IPOs to undertake a larger scale equity raising, so that it will pave the way for future expansion plans. According to the press release on 11 Nov 2010. post acquisition and rights issue, the projected gearing is still at a low level of 17.25%. Though the gearing has not changed much from 16.5% before the exercise, the asset base is going to be almost doubled to S$603.4m, which is going to make a difference to the absolute amount of debt the reit can incur before hitting the gearing limit. This will allow the reit to have more choices to make further acquisitions, thus helping it to achieve its target of having a portfolio size of S$1 billion in the next two to three years.

DPU Post Exercise
The projected annual DPU post exercise is 6.40 Singapore cents. Based on the DPU of 1.94 Singapore cents for the quarter ending 30 Sep 2010, the annualized DPU before the exercise is 7.76 Singapore cents. Whichever way you may want to calculate and compare the yield before and after the exercise, whether it is by TERP or by using the last closing price before announcement of the rights issue, the absolute amount of distribution you are going to received per unit is going to be reduced. So for existing unit holders you must keep a close tab on the schedule for rights issue, and not forget to either sell the rights, exercise the rights, or partially sell and partially exercise the rights before the deadline in order not to lose out on anything.

Related Links
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Thursday, November 11, 2010

First Reit - Follow up details of the proposed acquisition and rights issue - 10 NOV 2010

Follow up details of the proposed acquisition and rights issue:
Key Points
  • Distribution in projection year 2011 is expected to rise from 8.57% to 9.14% following the acquisition of two new healthcare properties in Indonesia.
  • This is based on a forecast annualised DPU of 6.40 Singapore cents for the full financial year ending 31 December 2011, in relation to its enlarged portfolio and financing through a combination of the underwritten renounceable rights issue of 345,664,382 new Units at an issue price of S$0.50 per Rights Unit and bank loan.
  • Upon completion of the Acquisitions, First REIT’s aggregate leverage will also be lowered from 18.60% to 17.25% for the Projection Year 2011.
  • On completion of the Acquisitions, the conditional master lease agreements entered into with Lippo in relation to the Properties will commence for a 15 year lease term.
  • Rental income of both Properties comprise a base rent component which is payable quarterly in advance, and subject to a stepped up increase every year thereafter at a rate equal to 2 times of the percentage increase of Singapore’s Consumer Price Index for the preceding calendar year; as well as a variable rent component. 
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MapletreeLog - Details of cumulative distribution in connection with the recent equity fund raising - 10 NOV 2010

Details of cumulative distribution in connection with the recent equity fund raising. See press release.

This is further to its announcement dated 21 September 2010 on the Cumulative Distribution Books Closure Date in connection with the equity fund raising.

Key Points
  • The actual amount of the Cumulative Distribution for the period from 1 July 2010 to 14 October 2010 is 1.78 cents per unit. 
  • This comprises 1.54 cents per unit for the period 1 July 2010 to 30 September 2010 (as announced in the 2010 third quarter financial statement announcement) and 0.24 cents per unit for the period 1 October 2010 to 14 October 2010.
  • Unitholders whose securities accounts with The Central Depository (Pte) Limited were credited with units in MapletreeLog as at 5.00 pm on 29 September 2010 will be entitled to the Cumulative Distribution that will be paid on Monday 29 November 2010.
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