General S-REITs Discussion Thread

[limster]

Interesting point:
Capitaland Ascendas REIT buys Seagate Shugart at 5.1% discount to independent market valuation.
Valuation: 230m. Purchase price: 218.24m
Valuation should already reflect the 20 years land tenure (leasehold property).

noted that Seagate Shugart sold the property to Capitaland and then leased it back.

to lower stamp duty, I would want to sell at below market value but at the same time, lease it back at a lower rent....

 

[prophetjul]

SREITs on the slide....

 

[TehSi99]

SREITs on the slide....

Banks too.

 

[Shion]

S-Reit acquisitions continue with Clar’s S$218 million buy​

https://www.businesstimes.com.sg/co...-acquisitions-continue-clars-s218-million-buy
EARLIER last week, CapitaLand Ascendas Reit : A17U 0% (Clar) announced the proposed acquisition of an integrated high-specification research and development (R&D) facility and business park property from Seagate Singapore International Headquarters for a purchase consideration of S$218.2 million.

The purchase represents a 5.1 per cent discount to the independent market valuation of the property of S$230.0 million.

This brings the total count to five acquisitions which have been announced this year to date ending May 18, with a combined value exceeding S$2 billion.

These deals were made across various property types such as business parks, hotels, logistics, and retail assets, which span across Australia, India, Japan, Singapore, South Korea and the United States.

Among the five announced acquisitions, three of the largest announced were by Mapletree Logistics Trust : M44U -0.6%(MLT), Frasers Centrepoint Trust : J69U 0% (FCT) and Clar.

In April, MLT announced the acquisition of six logistics assets located in Japan, and one logistics property in Sydney, Australia. The trust also entered into a binding memorandum of understanding for the acquisition of a logistics property in Seoul, South Korea.

MLT in May announced that it has entered into a sale-and-purchase agreement of the logistics asset in Seoul, South Korea. The total purchase consideration of S$913.6 million of the eight logistics properties is an average 4.0 per cent discount to the properties’ total independent appraised value of S$972.7 million.

Clar’s latest acquisition, Seagate Singapore’s facility, is located at 26 Ayer Rajah Crescent in the one-north district in Singapore. The district is a key research and innovation business hub fostering R&D and high-technology activities in biomedical and life sciences, infocomm technology, media, science and engineering.

Clar currently has five assets in the one-north district and the completion of the proposed acquisition will further expand the real estate investment trust’s footprint in the one-north district by 13 per cent to S$1.9 billion in assets under management and by 21 per cent to 2.5 million square feet in net lettable area.

Upon completion, the proportion of Business Space and Life Sciences properties will increase to 49 per cent or S$8.1 billion of Clar’s total investment properties valued at S$16.7 billion.

Seagate Singapore will enter into a 10-year leaseback of the property’s entire gross floor area, with the option to renew for an additional 10 years. The long lease term with built-in rent escalation of 2.5 per cent per annum is expected to provide stability and resilience to the portfolio.

The acquisition is expected to be yield accretive and the pro forma impact on distribution per unit (DPU) is estimated to be an improvement of 0.110 Singapore cents or a DPU accretion of 0.7 per cent, assuming the transaction was completed on Jan 1, 2022. The acquisition is expected to be completed in the second quarter of 2023.

Together with Frasers Property Group in January, FCT announced a proposed joint acquisition to acquire 50.0 per cent interest in suburban retail mall Nex for S$652.5 million.

The trust notes that the investment in Nex further strengthens its focus in the suburban retail segment, where FCT already has an established platform and strong capabilities.

 

[Dividends Warrior]

PP for Osaka DC

 

[prophetjul]

SREITs sliding further

 

[zeroX26]

SREITs sliding further

Any good recommendations? Like not say big drop.

 

[Andrew833]

SREITs engine warming up.

 

[boo]

REITs performance for the week ending 26/5/23
CapLand Ascendas weekly down 3.6%, retreated to near 3-month low

 

[TehSi99]

What could be the impact to reits prices if Fed continue to increase interest rate in June?
Should we concern only if the reits has loan expiring this year?

 

[Andrew833]

What could be the impact to reits prices if Fed continue to increase interest rate in June?
Should we concern only if the reits has loan expiring this year?

Most REITs have to refinance almost yearly. For high interest rate period, need to watch out for REITs having debts concentration risk or problem with refinancing. Those REITs that manage their debts well, should not be a problem.
I don't think Fed will increase interest rate. It's already very high.

 

[light84]

What could be the impact to reits prices if Fed continue to increase interest rate in June?
Should we concern only if the reits has loan expiring this year?

There’s 3 scenarios for the interest rate right?

Interest rate goes up more means reits dpu will drop further. But I think it has been mostly priced in because the recent news about Fed doing another 25 bps hike did not tank the reits further

Interest rate stay at where it is means reits dpu will hold stable. Which I think is great cos the current pricing of reits is attractive. You can buy more and hold it while collecting the distribution

Interest rate cut will be the catalyst for reits to be priced upwards. It will be cut when economy is weak but when economy recovers, reits will get a boost

My base case is the interest rate will go up a bit more until inflation comes down but there wun be any interest cut in the mid term for next 1-3 years or until a recession or crisis happen. Meanwhile I will just load more and collect the distribution while waiting.

As long as the loans are well weighted and distributed for the next few years, I think it’s okay. Can’t avoid in the increase in financing cost

 

[DevilPlate]

I only 50% into equities/reits….still waiting for more durians to drop and average down…
if local reits never drop more like around 10%, then might start buying some 5y SGS liao whahaha

 

[TehSi99]

I only 50% into equities/reits….still waiting for more durians to drop and average down…
if local reits never drop more like around 10%, then might start buying some 5y SGS liao whahaha

10% from your average price or current price?

 

[TehSi99]

There’s 3 scenarios for the interest rate right?

Interest rate goes up more means reits dpu will drop further. But I think it has been mostly priced in because the recent news about Fed doing another 25 bps hike did not tank the reits further

Interest rate stay at where it is means reits dpu will hold stable. Which I think is great cos the current pricing of reits is attractive. You can buy more and hold it while collecting the distribution

Interest rate cut will be the catalyst for reits to be priced upwards. It will be cut when economy is weak but when economy recovers, reits will get a boost

My base case is the interest rate will go up a bit more until inflation comes down but there wun be any interest cut in the mid term for next 1-3 years or until a recession or crisis happen. Meanwhile I will just load more and collect the distribution while waiting.

As long as the loans are well weighted and distributed for the next few years, I think it’s okay. Can’t avoid in the increase in financing cost

That is practical strategy.

I am now still in red for my reits. Just waiting to buy more. It seems everyday is a good time to average down but somehow, some reits just dropped further when i bought them.

 

[DevilPlate]

10% from your average price or current price?

From current price.

 

[homer123]

I am 10% down on my reit ..Don't think I will average down..

 

[xoxozone]

https://www.channelnewsasia.com/sin...ge-home-loans-banks-interest-packages-3517311

 

[prophetjul]

10% down is pretty low.

 

[light84]

That is practical strategy.

I am now still in red for my reits. Just waiting to buy more. It seems everyday is a good time to average down but somehow, some reits just dropped further when i bought them.

Some of my reits are red but I continue to average down.

Some reits are yielding easily 7 to 10% plus at current pricing.

Even if the price is 10% down, u hold it for a year, your distribution would have cover the unrealized loss and the unrealized loss may become gain when market recovers