General S-REITs Discussion Thread

[Andrew833]

Look like Keppel DC going to break out very soon.

Keppel DC breakout today.
Congratz for investor.

 

[NewInvestor]

Keppel DC breakout today.
Congratz for investor.

So Keppel DC set a new ATH of $2.62. Nice. Yield is below 3%.

MINT's yield is still above 4%....

 

[wutawa]

Yield may be greatly affected during covid times so better not rely on it too much.

 

[Andrew833]

So Keppel DC set a new ATH of $2.62. Nice. Yield is below 3%.

MINT's yield is still above 4%....

Actually the higher the price, the lower the yield.

 

[Shion]

Landlords and tenants form committee to discuss rent, tenancy issues

Landlords and tenants form committee to discuss rent, tenancy issues

https://www.businesstimes.com.sg/sm...form-committee-to-discuss-rent-tenancy-issues

INDUSTRY bodies representing landlords and tenants in Singapore have formed a temporary committee to discuss long-standing issues on rental and tenancy, and aim to complete deliberations by year end.

The committee, called the Fair Tenancy Pro Tem Committee, is set up under the auspices of the Singapore Business Federation (SBF) and chaired by Nomura Singapore chairman Michael Lim.

It involves the Real Estate Developers' Association of Singapore (Redas) and Reit Association of Singapore (Reitas), whose members come from the majority of the largest commercial landlords in Singapore. The committee also involves members of the Fair Tenancy Framework Industry Committee (FTFIC), which was formed last month to lobby for legislation to address what has been perceived as an imbalance of power between landlords and tenants.

FTFIC comprises representatives from SBF's SME Committee, Association of Small and Medium Enterprises, Restaurant Association of Singapore, Singapore Retail Association and Singapore Tenants United for Fairness.

In a statement on Friday, the Pro Tem Committee said it had its first meeting on Thursday, when parties shared some of their "long-standing concerns" and clarified their perspectives.

They also discussed FTFIC's recommendations and subsequently agreed that some recommendations could be resolved in the near term, while others would need "further deliberations".

As a next step, the committee said, members have agreed to form working groups to look into specific areas.

"It is timely and imperative that both parties work together to meet the challenges confronting the industry. The formation of this committee is a first step towards bringing about change to the ecosystem," said SBF chief executive Ho Meng Kit.

Ongoing tensions between landlords and tenants were exacerbated during the Covid-19 pandemic, when some landlords were viewed as being reluctant to lend help despite having reaped years of profits at their tenants' expense.

The issue also thrust what tenants have perceived to be an unequal relationship with landlords and unfair clauses in tenancy agreements under the spotlight, leading some quarters to lobby for fairer tenancy practices.

 

[Shion]

UOB Kay Hian identifies data centre REITs as 'top outperformers' among S-REITs

UOB Kay Hian identifies data centre REITs as 'top outperformers' among S-REITs

https://www.theedgesingapore.com/ca...-centre-reits-top-outperformers-among-s-reits

SINGAPORE (July 2): As daily new confirmed cases reached 80,000 in the US last week, the UOB Kay Hian Singapore REIT (S-REIT) Index corrected 0.8% week-on-week to 247.7 in the same week.

Analysts Jonathan Koh and Peihao Loke remain unfazed at the correction. In fact, they see it as an opportunity to accumulate retail REITs such as CapitaLand Mall Trust (CMT) and Frasers Centrepoint Trust (FCT) with target prices of $2.60 and $2.85 respectively.

Koh and Loke also recommend stocking on units in Ascott Residence Trust (ART) with a target price of $1.16; Far East Hospitality Trust (FEHT), with a target price of 62 cents; and Keppel REIT (KREIT) with a target price of $1.30.

S-REITs’ top performers last week include data centre REITs Keppel Data Centre REIT (KDCREIT) and Mapletree Industrial Trust (MIT), which gained 4% and 2.8% respectively.

Keppel Data Centre REIT entered into a joint venture with SPH subsidiary Times Properties on June 29 to incorporate a new joint venture company at 82 Genting Lane.

Mapletree Industrial Trust acquired the remaining 60% stake in 14 data centres in the US on June 23. “The transaction is expected to boost pro-forma FY20 DPU by 3.4% to 12.66 cents, and net asset value (NAV) per share by 3.7% to $1.68,” say Koh and Loke.

Defensive S-REITs United Hampshire REIT and Parkway Life REIT, as well as industrial REITs Ascendas REIT (A-REIT), and Mapletree Logistics Trust (MLT) increased 1.75, 1.2%, 1.6%, and 1% respectively.

Conversely, CDL Hospitality Trusts (CDLHT), Ascott Residence Trust (ART), Frasers Hospitality Trust (FHT), and FEHT fell 8%, 6.6%, 6%, and 4.7% respectively. Lendlease Global Commercial REIT (LREIT) and Starhill Global REIT (SGREIT) dropped 6.8% and 6.4% respectively.

Units in CapitaLand Mall Trust closed 3 cents higher, or 1.5% up at $2.03.

Units in Frasers Centrepoint Trust closed 2 cents higher, or 0.9% up at $2.34.

Units in Keppel Data Centre REIT closed 1 cent lower, or 0.4% down, at $2.55.

Units in Mapletree Industrial Trust closed 4 cents higher, or 1.4% up, at $2.94.

Units in United Hampshire US REIT closed 0.5 cents lower, or 0.8% down, at 59.5 cents.

Units in Parkway Life REIT closed 6 cents higher, or 1.8% up, at $3.41.

Units in Ascendas REIT closed 9 cents higher, or 2.8% up, at $3.28.

Units in Mapletree Logistics Trust closed 6 cents higher, or 3.0% up at $2.03.

Units in CDL Hospitality Trust closed 1 cent higher, or 1.0% up, at $1.05.

Units in Ascott Residence Trust closed 2 cents higher, or 2% up at $1.02.

Units in Frasers Hospitality Trust closed 1 cent higher, or 2.2% up at 47.5 cents.

Units in Far East Hospitality Trust closed 2.5 cents higher, or 5% up at 52.5 cents.

Units in Lendlease Global Commercial REIT closed 0.5 cents higher, or 0.7% up at 68 cents.

Units in Starhill Global REIT closed 1 cent higher, or 1.9% up, at 52.5 cents.

 

[Shion]

Hotel stays, recreation areas for children may resume upon hotels’ successful applications: STB

Hotel stays, recreation areas for children may resume upon hotels’ successful applications: STB

https://www.theedgesingapore.com/ne...s-children-may-resume-upon-hotels’-successful

SINGAPORE (July 3): The Singapore Tourism Board (STB) says that it has drawn up safe management measures (SMMs) with the Ministry of Trade and Industry (MTI), Enterprise Singapore (ESG), and the Ministry of Health (MOH) for hotels on Friday.

Under the SMM, hotels, which include migrant worker decant hotels (MWD), and stay-home-notice dedicated facilities (SDFs), must comply with the latest requirements found in the Covid-19 (Temporary Measures) (Control Order) Regulations 2020.

Under Phase 2, which began on June 19, hotels may now apply to the STB to resume providing accommodations to guests for leisure purposes and reopen recreation areas for children within the hotel premises.

Hotels may resume these activities and related marketing efforts only once they have received approval from the MTI.

As part of the application process, hotels must address outcomes to reduce potential transmission risks and support contract tracing efforts.

Hotels must also implement density requirements such as limiting occupancy at guest-accessible public spaces within the premises to no more than one person per 10sqm. The limit excludes hotel staff.

Timings to minimise face-to-face contact among guests and employees will also be staggered.

Hotels whose applications have been approved, will have to submit a weekly report to the government, and inform STB whenever there is a positive Covid-19 case at the hotel.

 

[发哨子2020]

We revise our target prices for Singapore-focused REITs, ART, CMT, FCT, CCT, AREIT and KDC, incorporating a lower risk-free rate, as well as lower market-risk for the retail and commercial REITs.
https://www.stocksbnb.com/reports/singapore-reits-monthly-re-rating-for-sreits/

 

[Shion]

Broker's take: DBS positive on hospitality S-Reits as hotels to reopen for staycations

Broker's take: DBS positive on hospitality S-Reits as hotels to reopen for staycations

https://www.businesstimes.com.sg/co...n-hospitality-s-reits-as-hotels-to-reopen-for

DBS Group Research on Monday said the reopening of hotels for staycations in Singapore will be positive for all hoteliers in the Republic, including Ascott Residence Trust and Frasers Hospitality Trust.

Far East Hospitality Trust (FEHT) and CDL Hospitality Trusts (CDLHT) remain "prime beneficiaries", given their significant exposure in Singapore at about 100 per cent and 65 per cent of revenues respectively, wrote DBS analyst Derek Tan in a research note.

"Among the various hotels in Singapore, we believe that the Sentosa hotels will likely benefit first as they are probably the more attractive alternatives, given that most are still confined within local shores," DBS said.

The research team has a "buy" call on CDLHT and FEHT with a target price of S$1.30 and S$0.60 respectively, given their exposure in Sentosa.

As at 10.36am on Monday, stapled securities of CDLHT were trading at S$1.09, up S$0.02 or 1.9 per cent, while stapled securities of FEHT were trading at 52.5 Singapore cents, up 0.5 cent or 1 per cent.

For CDLHT, the prospective purchase of the W Hotel, which is expected to complete this month, will also set the stage for a gradual recovery over time, DBS said. In November last year, CDLHT proposed to buy the 240-room W Singapore luxury hotel in Sentosa Cove for S$324 million from Cityview Place Holdings, a wholly-owned subsidiary of City Developments Limited (CDL).

Separately, Mr Tan noted that Singapore's tourism industry has been "worst hit by the Covid-19 pandemic", with very few tourists over the past few months.

Last Friday, the Singapore Tourism Board (STB) announced that visitor arrivals in Singapore for May 2020 had plummeted to just 880 - a far cry from 1.49 million visitors in May 2019.

Although hotels have been able to generate cashflows through government-related businesses such as the mandatory stay home notices for returning Singaporeans, that has tapered off from June, DBS said.

"While food establishments at the hotel premises have reopened in Phase Two, as a percentage of revenues, food & beverage typically consists of a smaller proportion of total sales (up to 30 per cent for most hotels, 60 per cent for vacation hotels) and will be insufficient to compensate for the drop in revenues from the sale of hotel rooms," it added.

Nonetheless, DBS noted that while staycations have never been a significant business for the hospitality groups, this first wave of demand will bode well, given the limited business alternatives.

"We note that the hospitality S-Reits derive rental income based on a rental formula that has a fixed component that is set by their respective sponsors; the ability to generate businesses from staycations will help alleviate cashflow issues for the sponsors, thus improving the sentiment for the sector over time, in our view," DBS said.

In an advisory last Friday, STB indicated that hotels may now apply to resume two activities - providing accommodation to guests for leisure, and opening their recreation areas for children. However, the establishments must first comply with safe-management rules and submit an application to the STB for assessment before reopening for business.

Some of these safe-management rules include limiting occupancy to no more than one person per 10 square metres in public spaces accessible to guests at any one time, excluding hotel staff, and reducing face-to-face mingling through staggering guest time at lobbies and guest facilities.

 

[发哨子2020]

May be I should ‘drive and stay’ 1 nite each at a hotel each @ Changi , then Bugis , Chinatown , Sentosa and then round off with Jurong East Genting.

My reminiscence of my Scotland trip last year.

 

[发哨子2020]

Phillip Capital in a webinar last week end said the SGX listed Europe and US reits are unappreciated at the moment.
They may catch up later .

 

[Shion]

Broadening rally for S-REITs in 2H20 on returning investor confidence; industrial REITs among top pe

Broadening rally for S-REITs in 2H20 on returning investor confidence; industrial REITs among top performers, says DBS

https://www.theedgesingapore.com/ca...eturning-investor-confidence-industrial-reits

SINGAPORE (July 7): As the Singapore economy opens up in phases from the circuit breaker measures, DBS analysts Derek Tan, Rachel Tan, Dale Lai, and the Singapore Research Team believe there could be a broadening rally in 2H20 on returning investor confidence, and “lower-for-longer” rates.

However, with the reduction of various tenant rental waivers from landlords and government incentives moving forward, the analysts expect the economy to deteriorate first, before recovering gradually.

“That said, we have noted a broadening of the S-REIT rally as investors position ahead of a recovery. The next data-point we see boosting investors’ confidence is the phased return of office workers to CBD, which will boost office and selected retail S-REITs,” say the analysts in a July 7 report.

Investors should focus on the possible supply crunch in 2H20, instead of the structural demand changes, which will unravel within the next three to five years, they say.

The potential supply crunch may come about due to delays arising from a stop in work during the circuit breaker measures.

Over time, the analysts say they see resilience in being positioned in Grade A offices (such as KREIT and CCT), and decentralised office spaces (MCT).

In the retail sector, they prefer suburban malls, over tourist-focused properties, as discretionary spending will likely remain “subdued” amidst the weak economic outlook.

“We see value in the retail landlords CMT and FCT to play catch-up given prices are 16-20% below that at start of 2020,” they say.

Among the top performers year-to-date, the analysts say they continue to “like” the industrial S-REITs as they ride on the trends of the greater adoption of e-commerce and office decentralisation.

“We, however, employ a differentiated strategy, with a focus on A-REIT and FLT which we believe will play catch-up given their higher absolute yields of 5.0% and 6.5% respectively,” they note.

“We also see a yield compression in the mid-cap industrial S-REITs as economic recovery gathers pace in the medium term. We like ALLT and SBREIT for their quality portfolio and value-accretive pipeline of assets,” they add.

S-REITs are now trading at 1.15x P/NAV and FY20/21F yield of 5.5%/6.3%, which implies a growth rate of some 15%.

“Spreads are attractive to remain vested and while growth in 2021 is at a robust 80bps (or 15%) owing to one-offs in 2020, we see upside upon a resumption of acquisition activities in 2H20,” advise the analysts.

“We see possibilities in selected S-REITs in the industrial and retail subsectors positioned to leverage on their sponsors’ pipeline and support growth distributions”, they add.

 

[icoolboy123]

Can I just clarify that REITs like Cromwell or Manulife don't incur withholding taxes for Singaporean residents (e.g: 30% for US)?

 

[Andrew833]

Can I just clarify that REITs like Cromwell or Manulife don't incur withholding taxes for Singaporean residents (e.g: 30% for US)?

No tax as it is listed in Singapore.
But the REITs property income is tax in US or Europe.

 

[Shion]

ESR-Reit and Sabana Reit propose merger

ESR-Reit and Sabana Reit propose merger

https://www.businesstimes.com.sg/companies-markets/esr-reit-and-sabana-reit-propose-merger

A UNION may be on the cards for ESR-Reit and Sabana Shari’ah Compliant Industrial Real Estate Investment Trust (Sabana Reit), the latest in a string of consolidations in the Singapore real estate investment trust (S-Reit) universe.

The two trusts on Thursday announced a proposed merger, by way of a trust scheme of arrangement, which will see ESR-Reit acquiring all units of Sabana Reit in exchange for new units in ESR-Reit.

By way of illustration, if the scheme becomes effective, each Sabana unitholder will receive 94 new ESR-Reit consideration units for every 100 Sabana units held.

The illustrative issue price is S$0.401 per new ESR-Reit consideration unit, and the gross exchange ratio is 0.94 times.

This will translate to Sabana unitholders receiving an implied scheme consideration of S$0.377 per Sabana unit, and the implied aggregate scheme consideration is about S$396.9 million.

Following the merger, the sponsor, ESR Cayman, is expected to hold about 12.2 per cent of the total issued units in the enlarged Reit.

Adrian Chui, chief executive officer (CEO) and executive director of ESR-Reit’s manager, said the merger is in line with its strategy to establish ESR-Reit as a leading pan-Asian industrial Reit.

The enlarged Reit’s larger market capitalisation and free float, as well as higher trading liquidity, will help to facilitate its potential inclusion in key indices, which will in turn provide the enlarged Reit with access to a wider and more diversified investor base and increased analyst coverage, Mr Chui added.

Donald Han, CEO of Sabana Reit’s manager, said that with ESR Cayman as a developer-sponsor, the enlarged Reit will have access to a pipeline of assets worth over US$22 billion “in a market where quality logistics properties are increasingly scarce”.

The scheme will require, among others, the approval of Sabana unitholders for the amendments to the Sabana Reit trust deed and the scheme, at an extraordinary general meeting and a scheme meeting to be convened.

Units of Sabana Reit closed flat at S$0.36 on Wednesday, while ESR-Reit units finished unchanged at S$0.39.

 

[Shion]

Vacancies to put pressure on Singapore retail rents in Q2: Cushman & Wakefield

Vacancies to put pressure on Singapore retail rents in Q2: Cushman & Wakefield

https://www.businesstimes.com.sg/re...ingapore-retail-rents-in-q2-cushman-wakefield

VACANCIES in the second quarter of 2020 are expected to put pressure on retail rents in Singapore, as more businesses shutter for good in the period, said Cushman & Wakefield in a report on Thursday.

Activity-based tenants such as those in food and beverage (F&B) and health and wellness are not able to operate at full capacity due to social-distancing measures, despite resuming operations since June 19 after Singapore's "circuit-breaker" period.

As such, vacancies in non-prime locations are expected to rise in the second half of 2020, as activity-based tenants are usually located in non-prime spaces within malls due to their larger size requirements.

The entire retail market may see steeper falls in rent in H2 2020, said Christine Li, Cushman & Wakefield head of research for Singapore and South-east Asia. This is due to higher expected vacancies, lower footfalls, social-distancing measures and economic uncertainties due to the Covid-19 situation.

"Currently, many landlords are still maintaining close to pre-Covid-19 asking rents, but as vacancies rise, landlords are expected to become more flexible," she said.

That being said, rents will be less affected for popular prime spaces in sought-after suburban malls which are able to maintain high occupancy levels due to strong tenant profile.

Prime retail rents fell across the board in the second quarter of 2020, with rents in other city areas falling the most, down 3.5 per cent quarter on quarter to S$20.88 per square foot per month (psf/mo).

Orchard prime rents were down 1.5 per cent to S$34.73 psf/mo, while suburban prime rents were down 0.9 per cent to S$31.56 psf/mo quarter on quarter.

For the whole of 2020, Cushman & Wakefield expects prime rents in Orchard and other city areas to fall by about 10 per cent each. Suburban prime rents are expected to drop 5 per cent.

The report noted there could be an overall fall in new demand for retail spaces as some F&B tenants explore delivery options such as cloud kitchens or central kitchens due to current social-distancing measures.

Singapore saw a flurry of retail closures in Q2, with the shutting down of indoor family attraction Kidzania Singapore and German-themed Starker Bistro, which closed all seven of its outlets.

Fashion brand Esprit reportedly shut 12 outlets islandwide, while Isetan decided not to renew its lease at Westgate. Robinsons will close its Jem outlet in August, with some of its space to be replaced by IKEA, which will open its first concept store in 2021.

Mark Lampard, Cushman & Wakefield executive director for regional tenant representation, said there is some opportunity for retailers to pursue prime retail spaces during this time as vacancies rise. For more stability, retailers can explore suburban prime options.

"What is very clear is that retailers have the opportunity to sharpen their e-commerce channels, including virtual live sales, given that it is a major mode of transacting business now," he added.

In the first quarter of 2020, rents of retail spaces eased 2.3 per cent over the previous three months, according to data released by the Urban Redevelopment Authority on April 24.

 

[Shion]

Increased confidence on S-REITs as Singapore's economy reopens

Increased confidence on S-REITs as Singapore's economy reopens

https://www.theedgesingapore.com/ca...confidence-s-reits-singapores-economy-reopens

SINGAPORE (July 16): Singapore is well into Phase 2 of reopening the economy and social distancing restrictions are gradually easing. With that, UOB Kay Hian is keeping its “overweight” rating on the Singapore REITs (S-REITs) sector.

Compared to the previous week, UOBKH S-REIT Index retraced marginally by 0.6% to 252.1. Some of the week’s top performers include ARA LOGOS Trust, gaining 6.1% with the appointment of new CEO Karen Lee; and Keppel DC REIT, gaining 3.6% as data centres are beneficiaries of Covid-19 pandemic.

This is followed by hospitality REITs Frasers Hospitality Trust (FHT), CDL Hospitality Trust (CDREIT) and Ascott Hospitality Trust (ART), which increased 2.1%, 1.9% and 1%, respectively.

Hotels have been given the green light to usher in locals on staycations and hoteliers can apply to Singapore Tourism Board (STB) to resume providing accommodation for purposes of leisure and opening recreational areas for children.

However, certain safety and social distancing rules still apply for guests within the hotel compound, such as wearing masks (except when eating or in their own rooms) and only five individuals allowed to gather at any guest room.

Hotel staff will screen guests for symptoms, including fever and running nose, while safety ambassadors are deployed to remind guests against clustering or loitering at common areas.

However, not all REITs are seeing improvement as the US REITs are troubled by a second wave of Covid-19 infections. Also, Lendlease REIT saw a 3.7% drop as OCBC, including subsidiaries Great Eastern and Lion Global, has recently trimmed their holdings.

In a Tuesday report, lead analyst Jonathan Koh is shining the spotlight on Frasers Centrepoint Trust (FCT), which is a pure play on suburban retail malls in Singapore that provides a distribution yield of 4.8%. He has a “buy” call on FCT with a target price of $2.85.

FCT has exercised its rights of pre-emption under the by-laws of PGIM Real Estate AsiaRetail Fund (ARF) to acquire 12.07% of ARF for $197.2 million. The acquisition was completed and increased FCT’s interest in ARF from 24.82% to 36.89%.

The analyst sees this acquisition as “mildly DPU accretive”. Assuming the acquisition had been effected at the beginning of FY19, pro forma FY19 DPU would have increased 0.13% to 11.987 cents, while NAV per unit would have stayed unchanged at $2.21.

ARF owns five suburban retail malls, namely Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1, totalling 1.0 million sq ft of NLA. These suburban retail malls share similar profile and characteristics to FCT’s malls, which focus on essential spending and F&B.

“They are located in populous residential areas and close proximity to transportation nodes. These characteristics ensure suburban retail malls are more resilient despite the Covid-19 pandemic,” says Koh.

As at 12.50pm, units in FCT are trading at $2.36.

 

[limster]

decided to do a top up of my REIT holdings, buying a few shares each of some of the REITs I hold.

Office REITs I think are safer because even with WFH, you still need office space.

Hospitality got more risk, but the valuations are way below the NAV it seems worth adding some.

 

[Andrew833]

decided to do a top up of my REIT holdings, buying a few shares each of some of the REITs I hold.

Office REITs I think are safer because even with WFH, you still need office space.

Hospitality got more risk, but the valuations are way below the NAV it seems worth adding some.

Industrial, mall, logistic, data center and office, all good to hold some.
I wonder which reits you holding.

 

[reddevil0728]

Industrial, mall, logistic, data center and office, all good to hold some.
I wonder which reits you holding.

Then why don’t just get REIT etf?