REIT Financial News - 28 JUN 2010: Moody's changes CCT's rating outlook to positive

Moody's changes CCT's rating outlook to positive. See:

• Press Release

Key Points

• Moody's Investors Service has today changed the rating outlook of CCT to positive from stable. 
• Moody's has affirmed CCT's Baa2 corporate family rating and Baa3 senior unsecured debt rating. 
• The change in outlook reflects CCT's demonstration of operational resiliency through the economic downturn, as evidenced by the high occupancy and decent rental growth of its Grade A office portfolio.
• The change in outlook further reflects CCT's improved capital structure, as it had successfully recapitalized its balance sheet -- through an equity issuance in June 2009 -- and its improving liquidity profile, including the increased use of medium-term unsecured financing.
• CCT's credit metrics have materially improved with Debt / EBITDA falling to 6.5x as of end of 1Q 2010 from 12x in 2008, and EBITDA/Interest increasing to 3.2x from 2.5x. CCT's level of encumbered asset also declined to 50% as of end of 1Q 2010 from its peak of 90% in 2008.
• CCT's current improved financial profile could weaken moderately due to continuing assets growth, the change in outlook factors in Moody's expectation that CCT's strategy to reconstitute its portfolio will enhance the quality of its property portfolio and thus its cash flow generation.

Author's Note
CCT closes at 1.22 today. In terms of closing price, this is the highest since around august 2008 after factoring in the rights issue.

REIT Financial News - 23 JUN 2010: Close of Private Placement by CDL H-Trust

Close of Private Placement by CDL H-Trust. See:

• Announcement

This follows the announcement of private placement a day earlier.

Key Points

• The issue price per New Stapled Security has been fixed at S$1.71 per New Stapled Security.
• The Joint Lead Managers and Underwriters have also exercised the upsize option such that the total number of New Stapled Securities to be issued pursuant to the Private Placement is 116,960,000.
• The gross proceeds from the Private Placement amount to approximately S$200.0 million.
• The trading of the New Stapled Securities on the SGX-ST is currently expected to commence at 2.00 p.m. on 1 July 2010. 

Author's Note
The actual number of new units of 116,960,000 is higher than the minimum amount of 84,750,000 units stated in the previous announcement. The increase is about 13.9% of the total number of units in issue as at 22 June 2010.


A very quick and rough estimate of the impact of the private placement on the impact based on this final number of new units:
Using the Q1 2010 DPU of 2.32 cents, we annualize it:
Annualized DPU = 2.32 x 4 = 9.28 cents
Assuming no. of units increased by 13.9%, the Annualized DPU = 9.28/1.39 = 6.68 cents
The share price before trading halt on 22 JUN = 1.89
Yield based on share price before trading halt on 22 JUN = 6.68/189 x 100 = 3.53%.

This is a very rough calculation to estimate the impact without taking in factors such as reduction of interest payment after paying off the debts. Do also take note that the Q1 2010 DPU of 2.32 cents is based on a 90% per out ratio. It would have been 2.58 cents for 100% per out ratio.

Stock Target Price - Updated Target Price for LMIR by OCBC

Updated Target Price for LMIR by OCBC:

OCBC BUY S$0.55

Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for CDL H Trust following its private placement exercise

Updated Target Price of CDL H Trust following its private placement exercise:

DMG BUY S$2.30
Phillip HOLD S$1.92

Latest updates at Stock Target Price.

REIT Financial News - 22 JUN 2010: CDL HOSPITALITY TRUSTS ANNOUNCES PRIVATE PLACEMENT OF S$150 MILLION

CDL HOSPITALITY TRUSTS ANNOUNCES PRIVATE PLACEMENT OF S$150 MILLION. See:

• Press Release
• Announcement
• Notice of Book Closure for advance distribution
  

Key Points

• Private placement of new stapled securities in CDLHT at an issue price of between S$1.71 and S$1.77 per new stapled security to raise a minimum gross proceeds of S$150.0 million.
• the Manager intends to use approximately S$116.3 million of the net proceeds from the private placement to repay the Singapore dollar portion of the one-year bridging facility that was used to finance the recent acquisition of Australian properties comprising Novotel Brisbane, Mercure Brisbane, Ibis Brisbane, Mercure Perth and Ibis Perth in 1Q 2010.
• The balance of the proceeds will be used to reduce debt levels arising from the partial utilisation of a S$80.0 million committed revolving credit facility from DBS Bank Limited, payment of transaction expenses in connection with the private placement of new stapled securities and general corporate or working capital purposes.
• the gearing level is expected to be reduced from 30.9% to 22.6% following the private placement.
• There will be an advanced distribution  which is approximately 4.8 cents per unit. The actual quantum of the DPU will be announced on a later date after the management accounts of H-REIT for the relevant period have been finalised.
• Based on the minimum amount of New Stapled Securities to be issued pursuant to the Private Placement, the number of units in CDL H-Trust in issue will increase by 84,750,000, which is an increase of 10.1% of the total number of units in issue as at 22 June 2010.
  

Author's Note
There will be an advance distribution for existing share holders of approximately 4.8 cents per unit. The actual amount will be announced on a later date after the management accounts of the relevant period have been finalised. The book closure date for the advance distribution is on 30 Jun 2010, and the payment of the advance distribution is on 27 Aug 2010.

A very quick and rough estimate of the impact of the private placement on the impact:
Using the Q1 2010 DPU of 2.32 cents, we annualize it:
Annualized DPU = 2.32 x 4 = 9.28 cents
Assuming no. of units increased by 10.1%, the Annualized DPU = 9.28/1.101 = 8.43 cents
The share price before trading halt on 22 JUN = 1.89
Yield based on share price before trading halt on 22 JUN = 8.43/189 x 100 = 4.46%.

Of course this is a very rough calculation to estimate the impact without taking in factors such as reduction of interest payment after paying off the debts. Also need to take note of the relatively low gearing of 22.6% if debts have been paid off. This will mean more debt headroom for further yield accretive acquisitions.

Stock Target Price - Updated Target Price for CMT by KIM ENG

Updated Target Price of CapitaMall Trust:

KIM ENG BUY S$2.23

Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for FCT by OCBC

Updated Target Price of Frasers Centrepoint Trust:

OCBC BUY S$1.50

Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for Ascott Reit by KIM ENG

Updated Target Price of Ascott Reit:

KIM ENG BUY S$1.35

Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for Office Reits by CIMB

Updated Target Price Office Reits by CIMB:

SUNTEC OUTPERFORM S$1.60
CCT OUTPERFORM S$1.37
Kreit UNDERPERFORM S$1.01

Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for Plife after latest acquisition announcement

Updated Target Price of Plife after latest acquisition announcement:

Phillip Securities BUY S$1.63

Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for SUNTEC Reit by OCBC

Updated Target Price for SUNTEC Reit:

OCBC BUY S$1.44


Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for Plife after latest acquisition announcement

Updated Target Price of Plife after latest acquisition announcement:

KIM ENG BUY S$1.59
DMG BUY S$1.62

Latest updates at Stock Target Price.

REIT Financial News - 9 JUN 2010: PLife acquires six new nursing home and care facility properties in Japan

ACQUISITION OF SIX PROPERTIES LOCATED IN JAPAN. See:

• Press Release
• Announcement

Key Points

• Acquires properties at an attractive purchase consideration of S$60.5 million 
• Highly yield-accretive with expected net property yield of 8.08%
• Fresh 20-year master lease / operating lease agreements, back-up operators and rental income guarantees enhances stability of overall portfolio
• Fully funded by 5-year unsecured commited Japanese yen facility at an attractive rate of 2.0%
• With this funding, PLife REIT’s gearing will increase from 28.5% as at 31 March 2010 to 32.2%.
• The Properties are:
  
  1. Obatake Ichiban-kan, (78 rooms) located in Kitakyushu City, Fukuoka, Japan
  2. Obatake Niban-kan, (26 rooms) located in Kitakyushu City, Fukuoka, Japan
  3. Shinmoji-kan, (112 rooms) located in Kitakyushu City, Fukuoka, Japan
  4. Nokata-kan, (100 rooms) located in Fukuoka City, Fukuoka, Japan
  5. Nogata-kan, (78 rooms) located in Nogata City, Fukuoka, Japan
  6. Sakura-kan, (110 rooms) located in Semboku City, Akita, Japan

Author's Note
This is the third round of acquisitions by Plife since IPO. As with the previous 2 acquisitions, all the properties are in Japan.

Stock Target Price - Updated Target Price by DMG for CCT, FCT, CDLHT, Cambridge

Reiteration of Target Price by DMG:

CDLHT BUY S$2.30
CCT NEUTRAL S$2.30
FCT BUY S$1.66
Cambridge BUY S$0.64


Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for Cache Logistics Trust by DBS

Updated Target Price for Cache Logistics Trust:

DBS BUY S$1.05


Latest updates at Stock Target Price.

REIT Financial News - 9 JUN 2010: Issue of 34,500,362 new units in Suntec Reit

ISSUE OF 34,500,362 NEW UNITS IN SUNTEC REAL ESTATE INVESTMENT
TRUST. See report.

Key Points

• the Manager has today (9 June 2010) issued 34,500,362 units in Suntec REIT (the "New Units") to Suntec City Development Pte. Ltd.
• this is the fifth 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.
• the New Units will be traded under a separate temporary stock counter which will be maintained for the period commencing from today to the last day of "cum-distribution" trading for the current distribution period, which is expected to be in late July 2010.

Author's Note
I have written an article about this deferred units for Suntec Reit:
About a Reit - SUNTEC Reit and its deferred units

Stock Target Price - Updated Target Price for SUNTEC Reit by DBS

Updated Target Price for SUNTEC Reit:

DBS BUY S$1.47


Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for MapleTreeLog following announcement of acquisition

Updated Target Price for MapleTreeLog following announcement of acquisition of 3 properties in Vietnam, Japan and Singapore:

OCBC BUY S$0.84


Latest updates at Stock Target Price.

REIT Financial News - 1 JUN 2010: Moody's revises outlook for S-REITs to stable

Source

SINGAPORE : Credit ratings agency Moody's has upgraded its outlook for Singapore's real estate investment trusts (S-REITs) from negative to stable.

This reflects its view that the sector's fundamental credit conditions over the next 12 to 18 months will remain stable.

Moody's said that the outlook is supported by three factors, which include the strong rebound in Singapore's economy and the stabilisation of rents across the various properties.

Singapore registered a growth of 13 per cent on-year in the first quarter of this year.

Moody's said that most S-REITs saw some improvement in their first-quarter revenue on year.

Since the second half of last year, they have taken action to improve their capital structure.

The decline in acquisitions has also alleviated the need for short-term bridge loans.

On retail, office and industrial properties' rents, Moody's expects slower rent declines.

This comes as tourist arrivals increase, spurring demand for retail space.

Peter Choy, a Moody's vice president and senior credit officer, said: "Although developers are launching a strong supply of office, retail, and industrial properties in Singapore during the rest of 2010 and into 2011, the downward adjustment in rents of the last 12 months has already - and substantially - reflected the coming increase in inventory."

At the end of the first quarter, prime office rents were down 0.7 per cent from the previous quarter.

Grade A office space had registered a slight increase of 1.25 per cent during that same period.

In addition, industrial REITs proved rather resilient throughout the global financial crisis from the fourth quarter of 2008 through 2009.

Moody's said that it believes the recovery in Singapore's manufacturing sector will further reinforce the stability of industrial properties.

Stock Target Price - Updated Target Price for MapleTreeLog following announcement of acquisition

Updated Target Price for MapleTreeLog following announcement of acquisition of 3 properties in Vietnam, Japan and Singapore:

DBS BUY S$0.93


Latest updates at Stock Target Price.

Stock Target Price - Updated Target Price for CCT by OCBC

Updated Target Price for CCT following announcement of asset enhancement plan for 6 Battery Road:


OCBC BUY S$1.26

Latest updates at Stock Target Price.

REIT Financial News - 31 MAY 2010: MapletreeLog acquires 3 properties for S$83.5 million in Vietnam, Japan and Singapore

MapletreeLog acquires 3 properties for S$83.5 million in Vietnam, Japan and Singapore:

• Press Release 
• Presentation Slides

Key Points

• the Reit has acquired three properties for $83.5 million. The properties are:
• a warehouse in Vietnam (Mapletree Logistics Centre) by way of conditional Sale and Purchase Agreement with the sponsor for US$6.4 million ($8.8 million).
• a warehouse Japan (Sendai Centre) by way of conditional Sale and Purchase Agreement with the sponsor for JPY 1.49 billion ($21.7 million).
• a distribution centre in Singapore (Natural Cool Lifestyle Hub) by way of a Put and Call option agreement with Natural Cool Investments (a wholly-owned subsidiary of Natural Cool Holdings) for $53 million.
• The Net Property Income (NPI) yield of Sendai Centre in Japan is 6.8% which is higher than the implied property yield of MapletreeLog’s existing Japan portfolio of 5.0%. 
• The NPI yield of Natural Cool Lifestyle Hub in Singapore is 8.05% which is also higher than the implied property yield of 7.1% of MapletreeLog’s existing Singapore portfolio. 
• The NPI yield of Mapletree Logistics Centre in Vietnam is 10.3% and will be the Reit's first Vietnam asset in the portfolio.
• Collectively, the acquisitions have a weighted average NPI yield of about 7.9% which is higher than MapletreeLog’s existing portfolio of 6.2%.
• the Reit intends to fund the acquisitions fully by debt in the interim, and gearing is expected to go up to 40.2%.
• The accretion to DPU is expected to be 0.157 cents or 2.62% based on 1Q 2010 financial results.

Author's Note
Prior to the 2008 financial crisis, MapletreeLog has been very aggressive in its acquisitions, and its gearing was once above 50%, close to the gearing limit of 60%. It has raised funds via equity twice, once in 2008 via rights issue, and a more recent one around Nov 2009 via private placement. These have brought the gearing down to the 30% level. The gearing as at 31 Mar 2010 was 38.6%. With this latest and the other recent acquisitions, the gearing has once again crept up to the 40% level.