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7/28/2019 120604
1/32SEE APPENDIX I FOR IMPORTANT DISCLOSURES AND ANALYST CERTIFICATIONS
Sector Update 4 June 2012
SingaporeCo. Reg No: 198700034E
MICA (P) : 099/03/2012
Singapore REITsTake Our Prist ine Picks
Track record matters. The myth that S-REITs are good income-
yielding instruments for retail investors has generated much debate. On
the one hand, REITs proponents like the recurring distributions paid out
from steady streams of rental income. On the other hand, naysayers
argue that whatever REITs managers pay out in dividends, they will
likely take back in the form of rights issues. We examined the total rate
of return of the 10 largest S-REITs since their listing, namely, those with
a trading history of at least five years, and put forward our pristine picksto ride through the impending economic down cycle.
Industrial and retail REITs top of the league. REITS in the more
resilient subsectors like industrial and retail topped our league table,
with CDL Hospitality Trusts, Frasers Centrepoint Trust and Ascendas
Real Estate Investment Trust the best performers. K-REIT Asia was the
worst performer, given the numerous equity cash calls it made to fund
acquisitions. While past performance may not guarantee future returns,
we take the view that our league table does provide some insights into
the track record of the individual S-REITs.
Good mix of stability and grow th potential. Rental income resilience,
total rate of return, accretive distributions and stable payout track record
are some of the parameters we scrutinised by delving into the operating
history of the S-REITs since their initial public offering. Barring a full-
blown European debt crisis, we also think that it is unlikely that S-REITs
will be de-rated to the levels seen during the global financial crisis (GFC)
due to stronger balance sheets and the absence of credit tightening.
Four S-REITs to ride through turbulence. S-REITs currently trade atan average of 0.94x P/BV and 6.8% yield compared to their troughvaluations of 0.34x P/BV and 17.2% yield seen at the height of the GFC.Our top four S-REITs are CapitaMall Trust and Frasers CentrepointTrust in the retail subsector, and Ascendas REIT and Mapletree
Logistics Trust in the industrial subsector. Our top SELLs are K-REITAsia and CapitaCommercial Trust as we see further downside risk intheir DPU which would render valuations unattractive.
Our Picks
Stocks
Bloomberg
CodeMkt cap(USD m)
Currentprice
(SGD)Rating
Targetprice
(SGD)
Top BUYs
Ascendas REIT AREIT SP 5,789 2.05 BUY 2.23
Mapletree Logistics Trust MLT SP 3,047 0.975 BUY 1.06
CapitaMall Trust CT SP 7,700 1.815 BUY 2.20
Frasers Centrepoint Trust FCT SP 1,728 1.625 BUY 1.79
Top SELLs
K-REIT Asia KREIT SP 3,247 0.98 SELL 0.83
CapitaCommercial Trust CCT SP 4,497 1.23 SELL 1.06
Closing price as at 31 May 2012
Source: Maybank KE
ONG Kian [email protected](65) 6432 1470
Wilson [email protected]
(65) 6432 1454
7/28/2019 120604
2/324 June 2012 Page 2 of 32
Singapore REITs
Investment Summary
Track record matters. We examined the total rate of return of the 10
largest S-REITs since their listing, namely, those with a trading history
of at least five years, and put forward our pristine picks to ride through
the impending economic down cycle.
Good mix of stability and grow th potential. Rental income resilience,
total rate of return, accretive distributions and stable payout track record
are some of the parameters we scrutinised by delving into the operating
history of the S-REITs since their initial public offering. Our sector picks
are based on the stocks past track record of DPU accretions as well as
projected performance in FY12F-13F. Figure 1 summarises the
parameters of our bottom-up approach.
Figure 1: Stock selection criteria
Summary Parameters
Past Performance
Listing history Trading history > 5 years.
Equity fund raising (EFR) record Do not substantially dilute shareholders.
Total rate of return (TRR) Track record of REIT. Total returns to shareholder since IPO/listing.
Stable DPU payout
- Rental income resilience during crisis (lease expiry, arrears ratio)- No refinancing risk (debt maturity, minimal covenants,preferably no CMBS)
- No occupancy/concentration risks- Sponsor support
Asset devaluationInvestment properties not devalued substantially during crisis (NAVdecline).
Future Projected Performance
Organic growth- Asset enhancement, solid growth profile- Positive rental reversion
Acquisition growth- Acquisition potential within 12 months- Better-than-expected ROI from recent acquisitions
DPU accretion- Yield attractiveness (on a relative basis)- DPU accretion over FY12F-13F
Source: Maybank KE
Top BUYs. Barring a flare-up of new macro-sensitivities that could
derail our base case, our top four S-REIT picks are CapitaMall Trust
(CMT) and Frasers Centrepoint Trust (FCT) in the retail subsector, and
Ascendas REIT (A-REIT) and Mapletree Logistics Trust (MLT) in the
industrial subsector. CDLHT, riding the tourism boom, also appears
attractive but we remain wary of macro-economic headwinds curtailing
business and leisure travel. Its relative yield of around 6.5% also posesconcern for investors, who may be better off with the more defensive
industrial and retail REITs.
Top SELLs. We would avoid the relatively more cyclical office
subsector as occupancy pressure could translate to further downside
risks for earnings. Our top SELLs are office landlords K-REIT Asia and
CapitaCommercial Trust (CCT) as we see further downside risk in their
DPU which would render valuations unattractive.
7/28/2019 120604
3/324 June 2012 Page 3 of 32
Singapore REITs
Surviving turbulence
Stronger post-GFC. We note that most of the S-REITs have emerged
from the GFC stronger and with healthier balance sheets, forthcoming
acquisition proposals, overseas expansion and more asset
enhancement work being done. YTD, the sector has returned anaverage of 11.2%, compared to -16% in 2011 and 10.6% in 2010, and
during the GFC, 69% in 2009 and -59% in 2008. With the end of the
GFC, four new REITs listed on the SGX-ST Cache Logistics Trust (12
Apr 2010), Mapletree Industrial Trust (21 Oct 2010), Sabana Shariah
Compliant Industrial REIT (26 Nov 2010) and Mapletree Commercial
Trust (27 Apr 2011). The asset-expansion years of 2010-12 were a
stark contrast to 2008-09 when most of the S-REITs were burdened
with deleveraging plans, decompressing cap rates and rights issues.
Figure 2: YTD price performance of members in the FTSE REIT sub-index
Source: Bloomberg, Maybank KE
Figure 3: FSTI ST REIT Index
200
300
400
500
600
700
800
900
1000
1100
1200
Sep-02
Dec-02
Mar-03
Jun-03
Sep-03
Dec-03
Mar-04
Jun-04
Sep-04
Dec-04
Mar-05
Jun-05
Sep-05
Dec-05
Mar-06
Jun-06
Sep-06
Dec-06
Mar-07
Jun-07
Sep-07
Dec-07
Mar-08
Jun-08
Sep-08
Dec-08
Mar-09
Jun-09
Sep-09
Dec-09
Mar-10
Jun-10
Sep-10
Dec-10
Mar-11
Jun-11
Sep-11
Dec-11
Mar-12
FSTREI Ind ex +1stdev Avg -1 stdev
Source: Bloomberg, Maybank KE
Total rate of return (TRR) study. From the retail investors perspective,
we analysed the total returns (capital return +distributions) since listing of
the 10 largest S-REITs with a trading history of at least five years. We have
assumed that they subscribed 100% to all rights issues and divested their
positions on 31 May 2012 closing price. Of the 10, only Suntec REIT andFrasers Centrepoint Trust have not made any rights issue to-date,
though Suntec did a private placement in 2010. Private placements
typically dilute the shareholdings of retail investors, but the subsequent
share price adjustments will correct for our TRR computation.
7/28/2019 120604
4/324 June 2012 Page 4 of 32
Singapore REITsFigure 4: Total rate of return study
S-REITs
Years
listed
Total return
since IPO/listing
Ann uali sed
return Subsector
CDL Hospitality Trusts 5.87 126% 14.92% HOSPITALITY
Ascendas Real Estate Investment Trust 9.53 211% 12.65% INDUSTRIAL
Frasers Centrepoint Trust 5.90 101% 12.50% RETAIL
CapitaCommercial Trust 8.05 110% 9.65% OFFICE
CapitaMall Trust 9.87 142% 9.35% RETAIL
Mapletree Logistics Trust 6.84 83% 9.26% INDUSTRIAL
Suntec Real Estate Investment Trust 7.47 94% 9.26% OFFICE/RETIAL
Starhill Global REIT 6.69 27% 3.60% RETAIL
Ascott Residence Trust 6.17 22% 3.30% HOSPITALITY
K-REIT Asia 6.09 13% 2.01% OFFICE
Source: Bloomberg, Maybank KE
Our league table offers a sneak peek. As expected, REITs in the
more resilient subsectors such as industrial and retail having endured
SARs, the subprime crisis and GFC topped our league table with thebest performers being CDL Hospitality Trusts (CDLHT), Ascendas Real
Estate Investment Trust (A-REIT) and Frasers Centrepoint Trust (FCT).
CDLHT stands out, its share price having soared by about 151% since
2008 on the heels of a tourism boom. The worst performer was K-REIT
Asia, dragged down by a 17-for-20 rights issue for the OFC acquisition
in 2011 and a 1-for-1 rights issue in 2009 and an 8-for-5 rights issue in
2008 for acquiring one-third ORQ interest and Prudential Tower Strata.
While past performance may not guarantee future returns, we take the
view that our league table does provide some insights into the track
record of the individual REITs.
Debt maturity well spread out. An analysis of the sectors debtmaturity profile suggests that refinancing risk is low. S-REITs average
term to expiry improved from 2.7 years since 2008-09 to 3.14 years as
of 31 Mar 2012. Sector gearing remains healthy at 34.5%, compared to
40.7% at the height of the GFC. The debt maturity profile is also better
spaced out with no more than SGD5.2b to be refinanced each year. As
of 31 Mar 2012, debt among the S-REITs maturing by 2017 stands at
approximately SGD22.3b.
Figure 5: Debt maturi ty profil e of S-REITs* (as of 31 Mar 2012)
2,593
4,8285,126 5,106
3,671
968 966
21%22% 22%
16%
4%4%
11%
0
1,000
2,000
3,000
4,000
5,000
6,000
2012 2013 2014 2015 2016 2017 >=2017
0%
5%
10%
15%
20%
25%
30%
35%
40%
Debt Maturing [LHS] Proportion to Total Debt [RHS]
(S$'m)Avg. termto maturity: 3.14 yrs
Sector Gearing: 34.5%
*Excludes Fortune REIT and Saizen REIT. Source: Bloomberg, Maybank KE
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5/324 June 2012 Page 5 of 32
Singapore REITsFigure 6: Debt maturi ty profile of S-REITs (as of 31 Mar 2012)
(SGD m) 2012 2013 2014 2015 2016 2017 >=2017
Office
Frasers Commercial Trust 0 608 0 138 0 0 0
CapitaCommercial Trust 0 197 350 730 776 0 0
K-REIT Asia 535 100 635 825 428 0 0
Suntec REIT 200 670 773.5 681.5 370.0 0 0
Office subtotal 735 1,575 1,759 2,375 1,574 0 0
Retail
CapitaMall Trust 783.0 580 500.0 800 598.7 250 0
Frasers Centrepoint Trust 80 55 60 25 264 70 0
Starhill Global REIT 26 548 1 259 25 0 0
CapitaRetail China Trust 40.0 150.5 120.3 88.0 50 0 0
Lippo-Mapletree Indonesia 0 0 147.5 0 0 0 0
Mapletree Commercial Trust 0 282.2 338.6 339 169.3 0 0
Retail subtotal 929 1,616 1,167 1,510 1,107 320 0
Healthcare
Parkway Life REIT 9 50 185 217 0 49 0
First REIT 0 48.2 0 51 0 0 0
Healthcare subtotal 9 98 185 268 0 49 0
Hospitality
Ascott Residence Trust 221 106 275 241 327 0 0
CDL Hospitality REIT 0 452 0 84 0 0 0
Hospi talit y subtotal 221 558 275 325 327 0 0
Industrial
Ascendas REIT 376 257 395 300 350 375 348
Cambridge Industrial Trust 0 0.0 266.5 50 100 0 0
AIMS AMP Capital Indus REIT 0 130.0 29 123.0 0 0 0
Mapletree Industrial Trust 84 251 344 126 139 0 125
Mapletree Logistics Trust 239 299 135 30 75 224 493
Cache Logistics Trust 0 0 249 0 0 0 0
Sabana Shariah Comp. Indus REIT 0 44 321 0 0 0 0
Industri al subtotal 699 981 1,739 629 664 599 966
S-REITs total2,593(11%)
4,828(21%)
5,126(22%)
5,106(22%)
3,671(16%)
968(4%)
966(4%)
Source: Companies
Resilience is the name of the game. Barring a full-blown European
debt crisis, we think it is unlikely that S-REITs will decline to irrationally
low levels as in the days of the GFC. This is partly because S-REITs
have stronger balance sheets this time around. Moreover, interest rates
are still relatively low and a tightening of credit (credit crunch) among
financial institutions, which prevailed in 2008-09, has yet to occur.
7/28/2019 120604
6/324 June 2012 Page 6 of 32
Singapore REITsFigure 7: Cash calls in the midst of the subprime crisis and the GFC
S-REITs Cash call Date announced Reason
FCOT 3-for-1 [email protected] 30-J un-09 Refinancing of the maturing debt
CCT 1-for-1 [email protected] 22-May-09 Reduce borrowings
K-REIT Asia 8-for-5 [email protected] 25-Mar-08 Partly repay debt and finance 1/3 stake of ORQ
Suntec REIT [email protected] 11-Dec-09 Strengthen balance sheet and capital structureCMT 9- for-10 [email protected] 09-Feb-09 Repay borrowings
Starhill Global 1- for-1 [email protected] 22-J un-09 Pare down some of its existing debt
A-REITPrivate placement & preferential [email protected]
15-J an-09 Reduce aggregate leverage and fund development projects
MLT 3- for-4 rights [email protected] 24-J un-08 Repay borrowings
Source: Bloomberg, Maybank KE
Stay selective, stay invested. The unfolding of the Eurozone crisis,
the slow US economic recovery and the prospect of a slowing economy
in China will no doubt increase the downside risk to investors. With the
European debt crisis lingering and possibly worsening, global markets
look set to remain volatile. Elevated inflation also does not justifyholding on to cash for too long. We recommend that investors be
selective with S-REITs and stay invested but only in the right counters.
Four S-REITs to ride through turbulence. Rental income resilience,
TRR, accretive distributions and stable payout track record are some of
the parameters we scrutinised by delving into the operating history of
the S-REITs since their initial public offering. Barring a full-blown
European debt crisis, we also think that it is unlikely that S-REITs will
be de-rated to GFC levels, due to stronger balance-sheets and the
absence of credit tightening.
Sector valuations. S-REITs currently trade at an average 0.94x P/BVand 6.8% yield compared to their trough valuations of 0.34x P/BV and
17.2% yield seen at the height of the GFC.
Figure 8: Price-to-book of S-REITs in various subsectors
Min (midst
of GFC) 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 YTD 2012
Office 0.20x 0.74x 0.30x 0.89x 0.87x 0.59x 0.73x
Retail 0.44x 1.35x 0.55x 1.01x 1.08x 0.93x 1.01x
Healthcare 0.47x 0.83x 0.53x 0.87x 1.08x 1.11x 1.18x
Hospitality 0.27x 1.22x 0.46x 1.09x 1.16x 0.85x 0.99x
Industrial 0.46x 1.34x 0.55x 1.13x 1.38x 1.01x 1.09x
Overal l S-REITs 0.34x 1.07x 0.45x 0.99x 1.07x 0.83x 0.94xSource: Bloomberg, Maybank KE
Figure 9: Distribut ion yields of S-REITs in various subsectors
Max (midst
of GFC) 31-Dec-07 31-Dec-08 31-Dec-09 31-Dec-10 31-Dec-11 YTD 2012
Office 21.5% 3.9% 14.6% 7.5% 5.6% 8.0% 5.5%
Retail 13.9% 4.1% 10.2% 5.8% 5.3% 6.2% 6.2%
Healthcare 11.7% 8.7% 10.9% 7.0% 5.9% 6.5% 7.0%
Hospitality 25.1% 3.8% 14.8% 5.3% 5.4% 7.8% 6.1%
Industrial 18.4% 6.0% 15.1% 7.4% 6.7% 7.9% 7.6%
Overal l S-REITs 17.2% 4.5% 13.0% 6.7% 5.7% 7.3% 6.8%
Source: Bloomberg
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]7/28/2019 120604
7/324 June 2012 Page 7 of 32
Singapore REITs
Figure 10: Valuation matrix
StocksMkt Cap(USDm)
CurrentPrice Rating
TargetPrice
Upside /(downside)
2012f DPU(Cents)
2012F DPUyield (%)
Total return(%)
2012FRoE (%)
2012fD/A (%)
REITs
Ascendas REIT 5,789 $2.05 BUY $2.23 8.8% 13.45 6.6% 15.3% 8.4% 34.1%
Cache Logistics Trust 929 $1.035 HOLD $1.08 4.3% 8.09 7.8% 12.2% 8.4% 31.4%
CapitaCommercial Trust 4,497 $1.23 SELL $1.06 -13.8% 7.3 5.9% -7.9% 4.1% 30.3%
CapitaMall Trust 7,700 $1.815 BUY $2.20 21.2% 9.8 5.4% 26.6% 5.9% 35.2%
CDL Hospitality Trusts 2,309 $1.835 HOLD $1.92 4.6% 12 6.5% 11.2% 7.0% 25.7%
Frasers Centrepoint Trust 1,728 $1.625 BUY $1.79 10.2% 9.57 5.9% 16.0% 5.7% 32.3%
K-REIT Asia 3,247 $0.98 SELL $0.83 -15.3% 6.9 7.0% -8.3% 3.2% 37.8%
Mapletree Logistics Trust 3,047 $0.975 BUY $1.06 8.7% 6.98 7.2% 15.9% 7.7% 35.4%
Starhill Global REIT 1,577 $0.625 HOLD $0.65 4.0% 4.24 6.8% 10.8% 5.1% 30.3%
Suntec REIT 3,718 $1.285 HOLD $1.285 0.0% 9.19 7.2% 7.2% 5.5% 37.1%
Source: Maybank KE
7/28/2019 120604
8/324 June 2012 Page 8 of 32
Singapore REITs
S-REITs in a changing landscape
In the series of charts below, we highlight the forward DPU yield
performance of S-REITs in our coverage universe against the backdrop
of a changing economic landscape. It should be noted that the different
yields reflect the different risk levels individual REITs face as a result ofa wide array of factors including subsector dynamics, sponsor support,
access to capital, debt rating, leverage ratio, management quality and
location of properties. Ideally, a balanced portfolio would contain
different kinds of REITs tailored to the investors risk profile.
Figure 11: Forward DPU Yields of our coverage universe
Ascendas REIT Cache Logi st ic REIT
CapitaCommercial Trust CDL Hospitality Trusts
CapitaMall Trust Frasers Centrepoint Trust
K-REIT Asia Mapletree Logistics Trust
Starhill Global REIT Suntec REIT
Source: Bloomberg
7/28/2019 120604
9/324 June 2012 Page 9 of 32
Singapore REITsFigure 11: S-REITs /Real Estate Business Trusts yield table (as at 31 Mar 2012)
LastPrice Currency
Market Cap inlocal urrency
(m)
YTD%
Change
Equity FreeFloat
(%)Distribution
frequency
loomberg
ConsFY-1DPU
(in cents)
Bloomberg
ConsFY-2
DPUin cents)
FY-12Yield
(%)
FY-13Yield
(%)
Leverageratio
(%)
Bookvalue
per unit(in
SGD)
Price-to-
book(x)
Office
CapitaCommercial Trust 1.235 SGD 3,505 17.1% 67.8% Semi-Anl 7.50 7.60 6.07 6.15 30.2 1.58 0.8
Frasers Commercial Trust 0.945 SGD 606 27.7% 72.9% Semi-Anl 6.40 7.40 6.77 7.83 35.8 1.38 0.7
K-REIT Asia 0.990 SGD 2,534 19.3% 16.1% Quarter 7.10 7.10 7.17 7.17 37.4 1.27 0.8
Suntec REIT 1.290 SGD 2,875 19.5% 89.8% Quarter 9.10 8.90 7.05 6.90 37.4 1.99 0.6
Indiabulls Properties Investment Trust (Biz Trust) 0.104 SGD 384 -25.7% 14.9% None NM NM NM NM 20.7 0.45 0.2
Treasury China Trust (Biz Trust) 1.450 SGD 368 0.7% 64.7% Irreg 1.30 5.00 0.90 3.45 33.9 4.41 0.3
Offi ce Average SGD10,271 6.5 6.6 34.1 1.7 0.70
Retail
CapitaRetail China Trust 1.255 SGD 865 9.1% 60.3% Semi-Anl 9.20 9.50 7.33 7.57 30.2 1.27 1.0
CapitaMall Trust 1.795 SGD 5,977 5.6% 61.1% Quarter 10.00 10.60 5.57 5.91 40.3 1.59 1.1
Fortune REIT 4.330 HKD 7,327 15.2% 60.9% Semi-Anl 29.30 31.80 6.77 7.34 25.6 7.81 0.6
Frasers Centerpoint Trust 1.645 SGD 1,354 14.2% 59.0% Quarter 9.50 10.00 5.78 6.08 30.9 1.42 1.2
Lippo-Mapletree Indonesia 0.375 SGD 818 7.1% 55.7% Quarter NM NM NM NM 9.5 0.57 0.7
Mapletree Commercial Trust 0.920 SGD 1,718 NM 48.8% Quarter 6.00 6.10 6.52 6.63 39.0 0.91 1.0
Starhill Global REIT 0.635 SGD 1,234 12.4% 70.5% Quarter 4.20 4.50 6.61 7.09 30.2 0.87 0.7
Perennial China Retail Trust (Biz Trust) 0.460 SGD 517 NM 37.3% Semi-Anl 3.90 3.30 8.48 7.17 1.4 0.67 0.7
Retail Aver age SGD13,698 6.2 6.4 33.0 1.9 1.0
Healthcare
First REIT 0.875 SGD 551 15.1% 76.8% Quarter 7.00 7.20 8.00 8.23 14.9 0.80 1.1
Parkway Life REIT 1.830 SGD 1,107 2.2% 57.3% Quarter 9.80 10.50 5.36 5.74 35.2 1.49 1.2
Healthcare Aver age SGD1,659 6.2 6.6 28.4 1.3 1.2
Hospitality
Ascott Residence Trust 1.060 SGD 1,203 7.1% 50.6% Semi-Anl 8.40 8.70 7.9 8.2 40.7 1.31 0.8
CDL Hospitality REIT 1.850 SGD 1,788 19.7% 67.5% Semi-Anl 11.50 11.80 6.2 6.4 25.5 1.58 1.2
Hospital ity Average SGD2,990 6.9 7.1 31.6 1.5 1.0
Industrial
AIMS AMP Capital Indus REIT 1.145 SGD 510 21.2% 92.3% Quarter 11.30 12.00 9.9 10.5 29.5 1.41 0.8
Ascendas India Trust (Biz Trust) 0.765 SGD 591 10.9% 68.2% Semi-Anl 6.80 7.20 8.9 9.4 23.4 0.71 1.1Ascendas REIT 2.000 SGD 4,472 9.3% 77.2% Quarter 13.90 14.30 7.0 7.2 36.5 1.88 1.1
Cache Logistics Trust 1.030 SGD 721 8.4% 81.6% Quarter 8.30 8.60 8.1 8.3 27.3 1.02 1.0
Cambridge Industrial Trust 0.535 SGD 636 12.6% 80.1% Quarter 4.90 5.10 9.2 9.5 35.1 0.62 0.9
Mapletree Industrial Trust 1.150 SGD 1,874 7.0% 69.4% Quarter 8.60 8.80 7.48 7.7 37.8 1.02 1.1
Mapletree Logistics Trust 0.975 SGD 2,366 15.4% 58.8% Quarter 7.00 6.90 7.2 7.08 41.3 0.86 1.1
Sabana Shariah Comp. Indus REIT 0.950 SGD 607 8.6% 88.4% Quarter 9.50 9.30 10.0 9.8 26.9 0.99 1.0
Indust rial Average SGD11,776 7.6 7.8 35.6 1.3 1.1
Residential
Saizen REIT 0.137 SGD 184 -2.1% 88.9% Semi-Anl - - NM NM 31.6 0.4 0.3
Resident ial Aver age SGD184 NM NM 31.6 0.4 0.3
S-REITs Average SGD40,578 6.8 7.0 33.7 1.6 0.9
Source: Bloomberg , Maybank KE
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Singapore REITs
Ascendas REIT
Slow and Steady Wins the RacePositioned for growth. Ascendas REIT (A-REIT) is one of the best
performers in our TRR study, with an annualised TRR of 12.65%. It also
has a proven track record of portfolio expansion. Its ongoing asset
enhancement initiatives, development projects and recent acquisitions
would continue to drive growth in distributable income. We resume
coverage on the stock and upgrade our recommendation to BUY from
HOLD with the target price of SGD2.23
Busy, busy. With the acquisition of the multi-tenanted Cintech properties at
the Science Park completed, A-REIT now owns 101 properties in
Singapore and one business park property in China. The REIT has several
development and asset enhancement projects that are expected to wrap up
in the coming quarters. We believe that these initiatives and the recentacquisition would spur growth in distributable income. We forecast DPU
yield of 6.6% for FY3/13F.
Positive rental reversion to continue. A-REIT achieved positive rental
reversions of 5.2-15.7% across all its industrial subsectors in FY3/12
despite a slowdown in the domestic economy. Portfolio occupancy rate was
healthy at 96.4%. We expect A-REIT to continue to enjoy positive rental
reversions as the current market rates are at least 16% higher than its
passing rents for the leases due for renewal in FY13F.
Strong capital management gives peace of mind. A-REIT has a well-
balanced debt maturity profile with not more than SGD400m due for
refinancing in any one year. Its funding structure is well balanced between
debt instruments and bank loans. 62.2% of its interest rate exposure is
fixed for the next 4.2 years and its weighted average all-in cost of debt has
declined from 3.84% as of Dec 2010 to 3.5% as of Mar 2012.
Conviction BUY among industrial REITs. We like A-REIT for its stable
DPU yield that is underpinned by portfolio diversification (business/science
parks, hi-tech industrials, flatted factories, light industrials, logistics and
distribution centres and warehouse retail). Potential acquisitions overseas
could provide further upside for DPU growth. Importantly, A-REIT is also
less vulnerable to asset erosion, with its defensive properties located
primarily in Singapore. We upgrade the stock to BUY from HOLD with aDDM-derived target price of SGD2.23.
Ascendas REIT Summary Earnings Table
FYE Dec(SGD m) FY10 FY11 FY12F FY13F FY14FRevenue 447.6 503.3 511.8 524.1 541.8Net property income 339.4 368.3 371.4 379.6 392.6Distributable income 248.0 281.7 280.9 289.7 300.5DPU (cents) 13.2 13.6 13.5 13.9 14.3DPU growth (%) 1.0 2.5 -0.8 3.0 3.6DPU yield (%) 6.5 6.6 6.6 6.8 7.0P/BV(x) 1.2 1.1 1.1 1.1 1.0
Gearing (Debt to deposited assets) (%) 35.1 37.6 34.1 33.9 33.7
ROE (%) 17.6 12.6 8.4 8.5 8.6
ROA (%) 10.7 7.5 4.9 5.0 5.1Source: Company, Maybank KE
BUY(from HOLD)
Share price: SGD2.05Target price: SGD2.23
ONG Kian [email protected](65) 6432 1470
Stock Information
Description: Ascendas REIT (A_REIT) is a property trustconstituted by a trust deed. A-REIT owns and invests in adiverse, income producing portfolio of business park(including science park), light industrial, hi-tech industrial andlogistics properties in Singapore.
Ticker: AREIT SPShares Issued (m): 2,236.0Market Cap (USD m): 3,491.03-mth Avg Daily Turnover (USD m): 7.4ST Index: 2,759.58Free float (%): 77
Major Shareholders: %Ascendas Funds Mgmt Ltd 18.1
Key Indicators
ROE annualised (%) 7.5Debt to deposited assets (%): 36.6NAV/shr (SGD): 1.87Interest cover (x): 5.3
Historical Chart
Performance:
52-week High/Low SGD2.16 /SGD1.815
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -3.4 -2.4 0.0 -1.0 9.8Relative (%) 4.3 5.3 0.1 13.8 5.3
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Singapore REITsPROFIT AND LOSS (SGD m) BALANCE SHEET (SGD m)
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Gross Revenue 447.6 503.3 511.8 524.1 541.8 Total assets 5,419.8 6,564.4 6,745.2 6,833.6 6,926.0
Property expenses -108.2 -135.0 -140.4 -144.5 -149.2 Current assets 38.0 59.7 80.5 51.7 50.0
Net Property Income 339.4 368.3 371.4 379.6 392.6 Cash & equivalent 8.1 19.6 41.4 11.7 8.7
Finance income 3.3 5.4 6.6 6.5 5.4 Trade receivables 28.5 38.4 39.0 40.0 41.3
Performance fees -5.4 -29.1 -31.7 -32.4 -33.0 Non-current assets 5,381.8 6,504.6 6,664.8 6,781.9 6,876.0Management fees -24.7 -29.1 -31.7 -32.4 -33.0 Investment properties 5,254.6 6,170.3 6,335.8 6,480.7 6,603.6
Trust expenses -3.6 -5.0 -5.1 -5.2 -5.3 Plant & equipment 2.8 1.8 1.2 0.9 0.6
Finance expense -77.7 -64.2 -70.3 -69.1 -69.5 Others 124.4 332.6 327.7 300.4 271.8
Net income b/f tax & change in 233.7 274.5 271.0 279.4 290.0 Total liabil ities 2,128.2 2,649.0 2,773.3 2,795.0 2,817.2
Change in FV of Inv Pty 344.8 224.5 61.7 63.4 64.8 Current liabilities 671.6 753.7 439.5 584.2 496.4
Others 1.1 -4.2 0.0 0.0 0.0 Trade and other payables 119.5 116.2 120.9 124.5 128.5
Income tax -1.0 -1.6 -1.6 -1.6 -1.6 Short term borrowings 349.9 575.5 257.0 395.0 300.0
Total return 578.6 493.2 332.7 342.8 354.9 Others 202.2 62.0 61.6 64.7 68.0
Non-tax deductibles & o'er adj 9.4 9.0 5.0 5.1 5.2 Long-term liabilities 2,128.2 2,649.0 2,773.3 2,795.0 2,817.2
Distributable income 248.0 281.7 280.9 289.7 300.5 Long-term debts 820.3 1,044.5 2,046.2 1,923.2 2,033.2
DPU (cts) 13.2 13.6 13.5 13.9 14.3 Others 1,307.8 1,604.5 727.2 871.8 784.1
Unitholders' funds 3,291.7 3,915.4 3,971.9 4,038.6 4,108.8
CASH FLOW (SGD m) KEY RATIOS (SGD m)
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Growth (% YoY) Operating cash flows 300.6 328.8 352.3 440.0 453.7
Sales 8.2 12.4 1.7 2.4 Total return before tax 233.7 274.5 271.0 279.4 290.0
NPI 6.1 8.5 0.8 2.2 Adjustments for
Net income 291.0 -14.8 -32.5 3.0 Net interest expense 74.4 58.8 70.3 69.1 69.5
Distributable income 5.6 13.6 -0.3 3.1 Depreciation 1.3 1.1 0.7 0.5 0.3
DPU 1.0 2.5 -0.8 3.0 Mgt fees in units 4.9 5.8 6.3 6.5 6.6
Profitability (%) Others -2.3 0.9 0.0 0.0 0.0
NPI margin 77.4 75.8 73.2 72.6 72.4 Trade and other receivables -3.5 -6.8 -0.6 -40.0 -41.3
Net income margin 35.8 129.3 98.0 65.0 65.4 Trade and other payables -7.8 -5.4 4.7 124.5 128.5
ROA 3.0 10.7 7.5 4.9 5.0 Income tax paid 0.0 -0.1 0.0 0.0 0.0
ROE 5.0 17.6 12.6 8.4 8.5 Investi ng cash flows -370.1 -850.5 -103.4 -54.3 -29.7
Stability PPE -0.2 -0.1 -0.2 -0.1 -0.1
Gross debt/asset (%) 31.5 35.1 37.6 34.1 33.9 Capex on Inv Pty & others -9.0 -37.5 -5.0 -5.0 -5.0
Total debt/Investment Prop 32.2 36.1 39.2 35.7 35.3 Purchase of Pty -239.2 -474.2 0.0 0.0 0.0
Int. coverage (X) 4.2 4.0 5.3 4.9 5.0 Properties under development -91.0 -196.5 -98.3 -49.1 -24.6
Int. & ST debt coverage (X) -1.6 -0.7 -0.7 -1.8 -1.1 Others -30.6 -142.2 0.0 0.0 0.0
Cash flow int. coverage (X) 4.1 3.9 5.1 5.0 6.4 Financing cash flows 68.9 533.4 -227.1 -415.4 -427.1
Per share data (Scts) Equity net proceeds 0.0 400.0 0.0 0.0 0.0
EPU 8.2 30.9 23.7 16.0 16.5 Borrowing costs -69.3 -65.5 -71.6 -70.4 -70.9DPU 13.1 13.2 13.6 13.5 13.9 Net borrowing proceeds 378.4 479.3 -95.0 15.0 15.0
CFPS 15.2 16.0 15.8 16.9 21.0 Distribution to unitholders -237.7 -270.1 -280.9 -289.7 -300.5
NAV 157.2 175.6 187.8 190.2 193.1 Others -2.5 -10.3 220.5 -70.3 -70.6
SPS 22.1 23.9 24.1 24.5 25.1 Net change in cash -0.6 11.8 21.8 -29.7 -3.0
Beginning cash balance 8.7 8.1 19.6 41.4 11.7
Forex 0.0 -0.2 0.0 0.0 0.0
Ending cash balance 8.1 19.6 41.4 11.7 8.7
Free cash flow 291.3 291.3 347.2 434.8 448.6
Source: Company, Maybank KE
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Singapore REITs
Cache Logistics Trust
Defensive Play with Stable Income StreamDefensive play. Cache Logistics Trust is a defensive play, not least
because of its 100% occupancy rate and fixed rental escalation. It also
provides an attractive yield. Cache has 11 high-quality logistics properties,
which are 100% leased with triple-net master lease structures (operating
expenses borne by lessee) and locked-in annual rental escalations of about
1.5-2%. Modern ramp-up warehouses account for 86% of its portfolio GFA,
a trait which distinguishes it from its competitors. Its aggregate leverage
stands at 27.7%. Under the Property Funds Appendix (Code on Collective
Investment Schemes), Cache is permitted to borrow up to 35.0% of total
assets, which gives it a comfortable debt headroom of SGD103m for
additional acquisitions or asset enhancement initiatives. YTD Cache has
under-performed the FSTI REIT Index by 2.4%, but outperformed theStraits Times Index (STI) by 4%. Its forward yield of about 7.8% for FY12F
compares favourably with the overall S-REITs sector average DPU yield of
6.8%.
Leading ramp-up logistics provider in Singapore. Seven of Caches 11
properties are modern ramp-up logistics properties (21.2% market share in
Singapores ramp-up warehouses), equipped with large vehicular ramps for
easy access. All properties are also relatively new, with a weighted average
age of 4.8 years. This means that less capex will be required for asset
enhancements in the near term. In addition, ramp-up warehouses are more
resilient as their rents are likely to recover faster than conventional cargo-lift
warehouses when the economy improves and conversely would be less
severely impacted during a downturn.
Stable recurring income adds resiliency. Cache enjoys stable rental
income streams as seven of its properties are on triple-net master lease to
its sponsor (CWT) and CWTs parent (C&P). The master lease agreements
are also secured by a 12-month rental deposit in the form of cash or
bankers guarantees. Caches weighted average lease expiry is 4.4 years
and most of its assets have 1.5-2% rental step-up clauses. The stable
lease structures provide a high degree of predictable cash flow and stable
earnings for the trust, making Cache a defensive play in turbulent markets.
Assume coverage with HOLD and TP of SGD1.08. Cache also has the
right of first refusal to a rich pipeline of CWT/C&P-owned assets for future
acquisitions. It is in the midst of acquiring Pandan Logistics Hub from CWT
for SGD66m. We forecast an initial yield on cost of 7.9% with average rentof SGD1.39 psf pm and 2.5% pa rental escalation. More yield-accretive
acquisitions above its FY11 existing portfolio yield of 7.35% provide further
catalyst for re-rating. We assume coverage with a HOLD rating on valuation
grounds and target price of SGD1.08.
Cache Logisti cs Trust Summary Earnings Table
FYE Dec(SGD m) FY2011 FY2012F FY2013F FY2014FRevenue 64.6 71.2 75.6 76.4Net property income 61.9 67.7 71.8 72.5Distributable income 52.5 56.9 59.9 60.2DPU (cents) 8.2 8.1 8.5 8.5DPU growth (%) 47.4 -1.7 4.7 -0.1DPU yield (%) 8.0 7.8 8.2 8.2
P/BV(x) 1.1 1.1 1.1 1.1Gearing (Debt to Total Assets) (%) 29.6 31.4 31.7 32.1ROE (%) 11.8 8.4 8.9 8.9ROA (%) 8.2 5.6 6.0 5.9
Source: Company, Maybank KE
HOLD
Share price: SGD1.035Target price: SGD1.08
ONG Kian [email protected](65) 6432 1470
Stock InformationDescription: Cache Logistics Trust is a Singapore-basedREIT. The REIT invests in income-producing real estate usedfor logistics purposes in Asia-Pacific, as well as real estate-related assets.
Ticker: CACHE SPShares Issued (m): 699.9Market Cap (USD m): 560.03-mth Avg Daily Turnover (m): 1.1ST Index: 2,759.58Free float (%): 81.6%
Major Shareholders: %CWT Ltd 10
Key Indicators
ROE annualised (%) 7.27Debt to deposited assets (%): 27.7NAV/shr (SGD): 0.93Interest cover (x): 8.0
Historical Chart
Performance:
52-week High/Low SGD1.06/SGD0.915
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -0.5 3.0 8.4 9.6 8.4Relative (%) 7.4 11.2 8.5 26.0 4.0
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Singapore REITs
Figure 12: Maybank KE rental assumptions for Pandan Logistics Hub
FY12F FY13F FY14F FY15F
Average passing rent (SGD) 1.39 1.40 1.44 1.47
Occupancy 100% 100% 100% 100%
Period occupied (mths) 5.74 12.00 12.00 12.00
Gross rent (SGD m) Turnover 2.62 5.54 5.68 5.82
NPI (SGD m) 2.49 5.26 5.40 5.53
Yield on cost 7.9% 8.0% 8.2% 8.4%
Source: Company, Maybank KE
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Singapore REITsPROFIT AND LOSS (SGD m) CASH FLOW (SGD m)
YE Dec (SGD m) 2010A 2011A 2012F 2013F 2014F YE Dec (SGD m) 2010A 2011A 2012F 2013F 2014F
Gross Revenue 42.4 64.6 71.2 75.6 76.4 Operating cash flows 41.6 62.0 66.6 69.0 69.4
Property expenses -1.1 -2.7 -3.6 -3.8 -3.8 Net Income before tax 31.2 46.5 50.6 53.3 53.5
Net Property Income 41.4 61.9 67.7 71.8 72.5 Adjustments for
Net financing costs -6.1 -8.9 -9.8 -10.9 -11.3 Net interest expense 6.1 8.9 9.8 10.9 11.3
Manager's fees -3.3 -5.0 -5.6 -5.9 -6.0 Depreciation 0.0 0.0 0.0 0.0 0.0Trustee's fees -0.2 -0.2 -0.3 -0.3 -0.3 Mgt fees in units 2.5 3.8 4.2 4.4 4.5
Other trust expenses -0.6 -1.3 -1.4 -1.5 -1.5 Others 0.0 0.0 0.0 0.0 0.0
Other Income 0.0 0.0 0.0 0.0 0.0 Trade and other receivables -0.1 -0.2 0.0 0.0 0.0
Net income b/f tax & change in FV 31.2 46.5 50.6 53.3 53.5 Trade and other payables 1.9 3.1 2.0 0.5 0.1
Change in FV of Inv Pty 30.8 23.7 4.2 5.7 5.8 Income tax paid 0.0 -0.1 0.0 0.0 0.0
Income tax 0.0 -0.4 0.0 0.0 0.0 Investi ng cash flows -713.3 -74.3 -109.1 -8.0 -8.0
Total return 62.0 69.8 54.9 59.0 59.3 PPE -0.1 0.0 0.0 0.0 0.0
Non-tax deductibles & o'er adj -26.6 17.3 2.0 0.9 0.9 Capex on Inv Pty & others 0.0 -6.6 -8.0 -8.0 -8.0
Income available for Dist. 35.4 52.5 56.9 59.9 60.2 Purchase of Pty -713.2 -67.7 -101.2 0.0 0.0
Distributable income 35.4 52.5 56.9 59.9 60.2 Properties under devt 0.0 0.0 0.0 0.0 0.0
DPU (cts) 5.6 8.2 8.1 8.5 8.5 Others 0.0 0.0 0.0 0.0 0.0
Financing cash flows 679.7 16.4 46.1 -60.4 -62.6
Equity net proceeds 556.3 0.0 59.1 0.0 0.0
Borrowing costs -10.2 -7.2 -8.0 -8.9 -9.3
Net borrowing proceeds 178.0 75.0 51.7 7.6 6.8
Distribution to unitholders -23.1 -51.4 -55.8 -59.2 -60.2
Others -21.3 0.0 -0.9 0.0 0.0
Net change in cash 8.0 4.1 3.5 0.6 -1.2
Beginning cash balance 0.0 8.0 12.1 15.6 16.2
Forex 0.0 -0.1 0.0 0.0 0.0
Ending cash balance 8.0 12.1 15.6 16.2 15.0
Free cash flo w 41.5 55.4 58.6 61.1 61.4
BALANCE SHEET (SGD m) KEY RATIOS
YE Dec (SGD m) 2010A 2011A 2012F 2013F 2014F YE Dec (SGD m) 2011A 2012F 2013F 2014F
Total assets 752.2 855.2 972.1 986.5 999.1 Growth (% YoY)
Current assets 8.1 12.3 15.8 16.5 15.3 Sales 52.2 10.3 6.1 1.0
Cash & equivalent 8.0 12.1 15.6 16.2 15.0 NPI 49.7 9.3 6.1 1.0
Trade receivables 0.1 0.2 0.3 0.3 0.3 Net income 12.6 -21.4 7.6 0.5
Non-current assets 744.1 842.9 956.3 970.0 983.8 Distributable income 48.1 8.4 5.3 0.5
Investment properties 744.0 842.8 956.2 969.9 983.7 DPU 47.4 -1.7 4.7 -0.1
Plant & equipment 0.1 0.1 0.1 0.1 0.1 Profitability (%)
Others 0.0 0.0 0.0 0.0 0.0 NPI margin 95.8 95.0 95.0 95.0
Total l iabilities 177.1 261.1 315.7 325.8 334.8 Total return margin 108.1 77.0 78.1 77.7
Current liabilities 3.1 6.0 8.0 8.5 8.6 ROA 8.2 5.6 6.0 5.9
Trade and other payables 3.1 6.0 8.0 8.5 8.6 ROE 11.8 8.4 8.9 8.9
Short term borrowings 0.0 0.0 0.0 0.0 0.0 Stability
Others 0.0 0.0 0.0 0.0 0.0 Gross debt/asset (%) 29.6 31.4 31.7 32.1
Long-term liabilities 173.9 255.1 307.7 317.3 326.2 Total debt/Investment Prop 30.0 31.9 32.3 32.6Long-term debts 172.7 248.9 302.4 312.0 320.9 Int. coverage (X) 6.2 6.2 5.9 5.7
Others 1.3 6.2 5.3 5.3 5.3 Int. & ST debt coverage (X) 6.2 6.2 5.9 5.7
Unitholders' funds 575.1 594.1 656.4 660.7 664.4 Cash flow int. coverage (X) 7.0 6.8 6.4 6.1
Per share data (Scts)
EPU 11.0 7.8 8.3 8.3
DPU 8.2 8.1 8.5 8.5
CFPS 9.7 9.5 9.8 9.7
NAV 92.99 93.37 93.39 93.34
SPS 10.1 10.1 10.7 10.7
Source: Company, Maybank KE
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Singapore REITs
CDL Hospitality Trusts
Cyclical Hospitality Weighs on DefensivenessPure play on Singapore hospitality. CDL Hospitality Trusts (CDREIT)
has a stake in 2,716 rooms in Singapore (or 5.6% of all hotel rooms) as
at end-2011. It derived 77-84% of its revenue from Singapore and the
region accounted 82.5% of its asset value. We believe that CDREIT is
the purest play on the booming Singapore hospitality sector, and the
increase in average room rates (ARRs) in FY11 has been a boon for
the company. The bulk of its rent from Singapore is variable (60.3% as
of 1Q12). However, CDREITs assets have consistently enjoyed better
occupancy rates than the rest of the system due to their central location
and high share of business travellers. Thus, we expect its Singapore
assets to maintain robust occupancy of 85-88% and ARR to stay aboveSGD230 over FY12F-13F, barring a downturn in the global economy.
Another acquisi tion due th is year. CDREIT has set its sights on
acquiring hospitality assets worth SGD200-300m each year. It bought
Studio M Hotel, Singapore, in early-2011 for SGD150m and we believe
it still has sufficient room for another acquisition in FY12-13. With a
target gearing of 40%, CDREIT has further headroom of SGD503m for
acquisitions. Management has previously found the Japanese and
Australian hospitality sectors attractive.
Singapore QoQ ARR growth a key share price driver. In our view,
the main trigger for CDREITs share price is overall ARR growth for the
Singapore hotel segment. CDREITs share price exhibits a highcorrelation (72%) to Singapore hotels QoQ ARR growth. Nonetheless,
we remain wary of macro-economic headwinds and its drag on
business and leisure travellers. A deeper-than-expected global
slowdown might lead to a sudden drop in tourist numbers, which could
adversely impact the stocks performance. We also think the 2,586 and
3,909 hotel rooms scheduled to be completed in 2012 and 2013
respectively will put pressure on ARRs.
Assume coverage wi th HOLD and TP of SGD1.92. With volatility in
the stock markets and more hotel rooms coming on-stream, we would
advise investors to be cautious ahead. CDREIT has risen 19% YTD
and 151% since end-2008, in the midst of the GFC. At FY12F DPUyield of 6.5% (on a relative basis), we think investors are better off with
the more defensive industrial and retail REITs such as A-REIT (~7%
yield) and FCT (~6% yield).
CDL Hospitality REIT Summary Earnings Table
FYE Dec(SGD m) FY2010 FY2011 FY2012F FY2013F FY2014F
Revenue 122.3 141.1 150.4 141.9 139.4
Net property income 115.1 135.2 144.1 136.0 133.6
Distributable income 100.7 118.1 126.3 118.5 113.2
DPU (cents) 10.2 11.1 12.0 11.9 11.6
DPU growth (%) 18.9 8.3 8.6 -0.5 -3.0
DPU yield (%) 5.6 6.0 6.5 6.5 6.3
P/BV(x) 1.2 1.1 1.1 1.2 1.2Gearing (Debt to deposited assets) (%) 20.4 25.2 25.7 25.6 26.0
ROE (%) 9.3 11.4 7.0 6.5 6.2
ROA (%) 7.3 8.3 5.1 4.8 4.5
Source: Company, Maybank KE
HOLD
Share price: SGD1.835Target price: SGD1.92
Ong Kian [email protected](65) 6432 1470
Stock InformationDescription: CDL Hospitality Trusts is a stapled groupcomprising H-REIT and HBT. H-REIT is a real estateinvestment trust that invests in a portfolio of income-producing properties and HBT is a business trust.
Ticker: CDREIT SPShares Issued (m): 966.2Market Cap (USD m): 1,396.03-mth Avg Daily Turnover (USD m): 1.9ST Index: 2,759.58Free float (%): 67.5%
Major Shareholders: %Hospitality Holdings 32.5
Key Indicators
ROE (%) 11.4Debt to deposited assets (%): 25.6NAV/shr (SGD): 1.58Interest cover (x): 9.7
Historical Chart
Performance:
52-week High/Low SGD1.50/SGD0.94
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -1.6 8.5 27.0 -9.3 20.4
Relative (%) 6.2 17.1 27.1 4.3 15.4
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Singapore REITs
Figure 13: ARRs and occupancy to come under pressure with 6,495 hotelrooms to be added over 2012-13 (6,391 now under construction)
Source: URA 1Q12 Realis Data
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Singapore REITs
PROFIT AND LOSS (SGD m) CASH FLOW (SGD m)
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Gross Revenue 122.3 141.1 150.4 141.9 139.4 Operating cash flows 116.3 131.1 139.8 129.6 128.0
Property expenses -7.2 -5.9 -6.3 -6.0 -5.8 Total return 135.9 176.3 109.0 101.5 96.3
Net Property Income 115.1 135.2 144.1 136.0 133.6 Adjustments for
Finance income 4.0 1.4 1.0 1.1 1.4 Net interest and non-cash 24.7 24.1 25.2 24.6 27.5Performance fees 0.0 0.0 0.0 0.0 0.0 Depreciation 0.0 0.0 0.0 0.0 0.0
Management fees -10.2 -11.7 -12.3 -11.9 -11.8 Others -48.9 -68.7 5.3 3.8 4.3
Trust expenses -0.2 -0.2 -0.4 -0.4 -0.4 Trade and other receivables -1.7 -2.9 -1.2 1.1 0.3
Finance expense -20.5 -14.6 -16.4 -16.2 -19.4 Trade and other payables 6.3 3.1 1.5 -1.4 -0.4
Others -1.2 -2.5 -2.5 -2.5 -2.5 Income tax paid 0.0 -0.7 0.0 0.0 0.0
Net income b/f tax & change in FV 86.9 107.6 113.5 106.0 100.8 Investi ng cash flows -244.4 -166.2 -5.1 -5.0 -4.8
Change in FV of Inv Pty 51.4 73.2 0.0 0.0 0.0 PPE 0.0 0.0 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0 0.0 Capex on Inv Pty & others -6.7 -12.4 -6.1 -6.1 -6.2
Income tax -2.4 -4.5 -4.5 -4.5 -4.5 Purchase of Pty -237.9 -154.5 0.0 0.0 0.0
Total return 135.9 176.3 109.0 101.5 96.3 Others 0.2 0.6 1.0 1.1 1.4
Non-tax deductibles & o'er adj -35.2 -58.2 17.3 17.0 16.9 Financing cash flows 190.2 37.8 -124.0 -148.7 -140.4
Income avail. for distri. 100.7 118.1 126.3 118.5 113.2 Equity net proceeds 200.0 0.0 0.0 0.0 0.0
DPU (cts) 10.2 11.1 12.0 11.9 11.6 Borrowing costs -12.4 -13.1 -16.4 -16.2 -19.4
Net borrowing proceeds 87.3 153.6 16.1 -3.9 6.2
Distribution to unitholders -80.5 -102.3 -111.3 -116.2 -114.7
Others -4.2 -0.5 -12.5 -12.5 -12.5
Net change in cash 62.1 2.7 10.8 -24.1 -17.2
Beginning cash balance 5.7 67.7 70.5 81.3 57.2
Forex 0.0 0.0 0.0 0.0 0.0
Ending cash balance 67.7 70.5 81.3 57.2 40.0
Free cash flow 109.6 118.8 133.7 123.5 121.8
BALANCE SHEET (SGD m) KEY RATIOS
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Total assets 1,869.9 2,118.5 2,144.5 2,133.4 2,130.0 Growth (% YoY)
Current assets 82.7 88.5 100.5 75.3 57.8 Sales 33.3 15.4 6.6 -5.6 -1.8
Cash & equivalent 67.8 70.5 81.3 57.2 40.0 NPI 33.9 17.5 6.6 -5.6 -1.8
Trade receivables 15.0 18.0 19.2 18.1 17.8 Net income 105.6 29.8 -38.2 -6.9 -5.2
Others 0.0 0.0 0.0 0.0 0.0 Distributable income 32.7 17.4 6.9 -6.2 -4.5
Non-current assets 1,787.2 2,029.9 2,044.0 2,058.1 2,072.2 DPU 18.9 8.3 8.6 -0.5 -3.0
Investment properties 1,787.1 2,029.8 2,043.9 2,058.0 2,072.2 Profitability (%)
Plant & equipment 0.0 0.0 0.0 0.0 0.0 NPI margin 94.1 95.8 95.8 95.8 95.8
Others 0.1 0.1 0.1 0.1 0.1 Net income margin 111.1 124.9 72.5 71.5 69.1
Total l iabilities 409.7 570.8 589.2 583.2 588.8 ROA 7.3 8.3 5.1 4.8 4.5
Current liabilities 21.8 23.6 75.0 73.7 73.3 ROE 9.3 11.4 7.0 6.5 6.2
Trade and other payables 20.6 22.7 24.2 22.9 22.5 Stability
Short term borrowings 0.0 0.0 50.0 50.0 50.0 Gross debt/Asset (%) 20.4 25.2 25.7 25.6 26.0
Others 1.2 0.8 0.8 0.8 0.8 Total debt/Investment Prop 21.3 26.3 27.0 26.6 26.7Long-term liabilities 387.9 547.2 514.1 509.5 515.5 Int. coverage (X) 5.2 8.4 7.9 7.5 6.2
Long-term debts 381.1 534.8 500.9 497.0 503.2 Int. & ST debt coverage (X) 5.2 8.4 2.0 1.8 1.7
Others 6.7 12.5 13.3 12.5 12.3 Cash flow int. coverage (X) 5.7 9.0 8.5 8.0 6.6
Unitholders' funds 1,460.2 1,547.7 1,555.3 1,550.2 1,541.3 Per share data (Scts)
EPU 15.1 18.3 11.3 10.4 9.9
DPU 10.2 11.1 12.0 11.9 11.6
CFPS 12 14 14 13 13
NAV 152 160 160 159 157
SPS 13 15 16 15 14
Source: Company, Maybank KE
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Singapore REITs
Frasers Centrepoint Trust
Pure Exposure to Suburban RetailPure exposure to suburban retail. Frasers Centrepoint Trust (FCT) isone the best performers in our TRR study, with an annualised TRR of
12.5%, and it has not done any equity fund-raising since its initial public
offering. With investments in five malls located in the suburbs, FCT
offers pure exposure to suburban retail space. Its portfolio, valued at
SGD1.7b, has a total NLA of ~0.88m sq ft and an occupancy rate of
93.5%. FCT achieved 11% positive rental reversion in 2Q12 and 9.6%
in 1Q12, in line with our expectations that suburban asking rentals will
continue to climb at 2% pa in FY12F-13F.
No refinancing needs unti l FY16. FCTs next major refinancing is dueonly in FY16 (SGD264m or 48% of borrowings), while only SGD80m isdue this financial year. Gearing is relatively low at 30.9%, implying debtheadroom of SGD114m based on managements guided target gearingof 35%. Should opportunities for acquisitions arise, gearing can bestretched up to 45%, with debt headroom of SGD461m.
DPU upside. We forecast 7.5% DPU CAGR growth from FY11F-14F inview of positive rental reversions and resilience of the suburban malls.Asset enhancement works on Causeway Point is also on track for fullcompletion in Dec 2012 with occupancy expected to improve from91.3% to 100%. Management remains confident that (1) average psfrental will increase by 20% from SGD10.20 (2011) to SGD12.20 and(2) NPI will increase by 22% (incremental NPI of SGD9.3m), with ROIof 13% from a capex of SGD71.8m.
Resilience play, assume coverage with BUY. The suburban retail
sector (with necessity shopping) is historically one of the most resilient
sectors through economic cycles. Though the global growth outlook
remains murky and risks lean towards the downside, we are confident
that FCT, with a NLA lease expiry of 2.03 years, will be able to ride out
this economic morass. We like its defensive assets and strong balance
sheet. At the current price, FCT is trading at 5.9% FY12F yield. We
assume coverage with a BUY rating and a DDM-derived target price of
SGD1.79. Further catalysts stem from accretive acquisitions (such as
sponsors Changi City Point, Centrepoint and possibly Compass Point
recent SGD519m purchase by a J V between Prudential UK andFrasers Centrepoint) and asset enhancement initiatives.
Frasers Centrepoint Trust Summary Earnings Table
FYE Sep(SGD m) FY2010 FY2011 FY2012F FY2013F FY2014F
Revenue 114.7 117.9 134.4 142.6 147.8
Net property income 80.1 82.6 94.8 107.7 111.7
Distributable income 59.2 64.4 78.8 82.2 85.6
DPU (cents) 8.2 8.3 9.6 10.0 10.3
DPU growth (%) 9.2 1.5 15.0 4.1 3.8
DPU yield (%) 5.0 5.1 5.9 6.1 6.4
P/BV(x) 1.3 1.2 1.2 1.2 1.2
Gearing (Debt to deposited assets) (%) 30.3 31.3 32.3 32.6 32.9
ROE (%) 9.5 13.4 5.7 6.8 7.1ROA (%) 6.2 8.7 3.6 4.3 4.5
Source: Company, Maybank KE
BUY
Share price: SGD1.625Target price: SGD1.79
ONG Kian [email protected](65) 6432 1470
Stock Information
Description: Frasers Centrepoint Trust is a retail real estate
investment trust focused on growing unitholder value throughasset management, financial management and strategicinvestments. The trust invests in retail properties inSingapore and overseas.
Ticker: FCT SPShares Issued (m): 822.9Market Cap (USD m): 1,041.93-mth Avg Daily Turnover (USD m): 0.9ST Index: 2,759.58Free float (%): 59
Major Shareholders: %Frasers Centrepoint 40.8
Key Indicators
ROE annualised (%) 13.4Debt-to-deposit assets (%): 30.9NAV/shr (SGD): 1.42Interest cover (x): 5.49
Historical Chart
Performance:
52-week High/Low SGD1.645/SGD1.37
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) 2.2 7.6 11.6 10.9 13.2
Relative (%) 10.3 16.1 11.7 27.5 8.5
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Singapore REITsPROFIT AND LOSS (SGD m) BALANCE SHEET (SGD m)
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Gross Revenue 114.7 117.9 134.4 142.6 147.8 Total assets 1,516.2 1,786.8 1,817.5 1,827.3 1,838.9
Property expenses -34.7 -35.3 -41.5 -44.6 -46.2 Current assets 22.7 35.9 37.9 40.5 42.2
Net Property Income 80.1 82.6 94.8 107.7 111.7 Cash & equivalent 19.8 30.5 33.9 36.3 37.8
Finance income 0.0 0.0 0.1 0.1 0.1 Trade receivables 2.9 5.4 4.0 4.3 4.4
Performance fees 0.0 0.0 0.0 0.0 0.0 Non-current assets 1,493.5 1,750.9 1,779.6 1,786.7 1,796.7Management fees -8.2 -8.9 -10.1 -10.7 -11.1 Investment properties 1,439.0 1,697.0 1,725.7 1,732.8 1,742.8
Trust expenses -1.2 -1.5 -1.9 -2.0 -2.1 Plant & equipment 0.1 0.1 0.1 0.1 0.1
Finance expense -17.7 -19.1 -21.5 -20.8 -21.2 Investment in associate 54.3 53.8 53.8 53.8 53.8
Net income b/f tax & change in FV 53.0 53.1 61.5 74.3 77.5 Total l iabilities 526.9 635.0 665.7 675.5 687.1
Change in FV of Inv Pty 42.5 97.2 0.0 0.0 0.0 Current liabilities 351.1 211.4 242.1 251.9 263.6
Share of associate's profit 4.6 4.6 4.6 4.6 4.6 Trade and other payables 35.5 41.0 43.0 45.6 47.3
Others -5.0 -2.6 0.0 0.0 0.0 Short term borrowings 305.0 155.0 183.7 190.9 200.9
Income tax -0.6 2.6 0.0 0.0 0.0 Others 10.6 15.4 15.4 15.4 15.4
Total return 94.4 154.9 66.0 78.9 82.1 Long-term liabilities 175.8 423.6 423.6 423.6 423.6
Non-tax deductibles & o'er adj -35.2 -90.5 12.8 3.3 3.5 Long-term debts 155.0 404.0 404.0 404.0 404.0
Income avail for Distribution 59.2 64.4 78.8 82.2 85.6 Others 20.8 19.6 19.6 19.6 19.6
Distributable income 59.2 64.4 78.8 82.2 85.6 Unitholders' funds 992.3 1,156.2 1,156.2 1,156.2 1,156.1
DPU (cts) 8.20 8.32 9.57 9.96 10.34
CASH FLOW (SGD m) KEY RATIOS
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Operating cash flows 79.7 81.6 89.2 100.6 103.4 Growth (% YoY)
Net Income 53.0 53.1 61.5 74.3 77.5 Sales 32.5 2.7 14.0 6.1 3.6
Adjustments for NPI 33.7 3.2 14.7 13.7 3.7
Net interest expense 17.7 19.1 21.5 20.8 21.2 Net income 132.1 64.0 -57.4 19.5 4.1
Depreciation 0.0 0.0 0.0 0.0 0.0 Distributable income 26.1 8.8 22.4 4.4 4.0
Mgt fees in units 2.5 8.1 3.0 3.2 3.3 DPU 9.2 1.5 15.0 4.1 3.8
Others -0.9 -3.0 -0.1 -0.1 -0.1 Profitability (%)
Trade and other receivables -0.4 -1.1 1.4 -0.2 -0.2 NPI margin 69.8 70.1 70.5 75.5 75.6
Trade and other payables 7.9 5.3 2.0 2.6 1.7 Net income margin 82.3 131.4 49.1 55.3 55.6
Income tax paid 0.0 0.0 0.0 0.0 0.0 ROA 6.2 8.7 3.6 4.3 4.5
Investi ng cash flows -290.8 -156.9 -14.6 -2.6 -5.5 ROE 9.5 13.4 5.7 6.8 7.1
PPE -0.1 0.0 0.0 0.0 0.0 Stability
Capex on Inv Pty & others -9.9 -36.7 -28.7 -7.2 -10.0 Gross debt/equity (%) 30.3 31.3 32.3 32.6 32.9
Purchase of Pty -284.8 -123.9 0.0 0.0 0.0 Total debt/Investment Prop 32.0 32.9 34.1 34.3 34.7
Properties under development 0.0 0.0 0.0 0.0 0.0 Int. coverage (X) 2.2 2.0 2.1 2.8 2.9
Others 4.0 3.8 14.1 4.5 4.5 Int. & ST debt coverage (X) 0.1 0.2 0.2 0.3 0.3
Financing cash flows 219.3 86.0 -71.3 -95.6 -96.4 Cash flow int. coverage (X) 4.5 4.3 4.2 4.8 4.9
Equity net proceeds 178.1 66.7 0.0 0.0 0.0 Per share data (Scts)
Borrowing costs -14.4 -13.2 -21.2 -20.5 -20.9 EPU 12.3 20.0 8.0 9.6 9.9
Net borrowing proceeds 111.0 99.0 28.7 7.2 10.0 DPU 8.2 8.3 9.6 10.0 10.3
Distribution to unitholders -55.4 -62.6 -78.8 -82.2 -85.6 CFPS 10 10 11 12 12Others 0.0 -4.0 0.0 0.0 0.0 NAV 129 140 140 139 139
Net change in cash 8.3 10.7 3.4 2.4 1.5 SPS 15 14 16 17 18
Beginning cash balance 11.5 19.8 30.5 33.9 36.3
Forex 0.0 0.0 0.0 0.0 0.0
Ending cash balance 19.8 30.5 33.9 36.3 37.8
Free cash flow 69.8 44.8 60.5 93.4 93.4
Source: Company, Maybank KE
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Singapore REITs
K-REIT Asia
Propped by Temporary SupportsBeleaguered growth, initiate with SELL. K-REIT Asia showed up as
the worst performer in our TRR study of 10 REITs, delivering an
annualised return of just 2%. Highly exposed to the Grade A office
sector in Singapore, yields may fall off a cliff when rental supports for
various acquisitions end by 2014. If it proceeds on its growth path,
further equity fund-raising is almost inevitable, possibly to the chagrin of
unitholders. We initiate coverage on K-REIT with a SELL rating and
target price of SGD0.83.
Poster boy for the New Downtown. K-REIT has five properties in
Singapore and three in Australia in its current portfolio. In Singapore, it
has a strong foothold in the New Downtown at Marina Bay, with stakesin One Raffles Quay (ORQ), Marina Bay Financial Centre (MBFC) Ph1
and Ocean Financial Centre (OFC). Its attributable NLA of International
Grade A space stands at 1.8m sq ft.
Sustainability of yields may be tested. K-REIT has grown by nearly
ten-fold in terms of asset size in its six years of listing. Many of the
acquisitions, such as ORQ, MBFC Ph1 and OFC, have rental supports
which buffer yields typically for the first 3-5 years. However, as the
Singapore office sector continues to soften amid the global economic
malaise and ample new supply in the pipeline, we estimate that
K-REITs DPU yield may contract by 8.4% in FY14F and as much as
15.2% in FY15F, when the various rental supports end.Hungry for another mega-deal? K-REIT is expected to someday
acquire Keppel Lands one-third stake in MBFC Ph 2, which is 67%
committed and has already obtained its Temporary Occupation Permit
in 1Q12. While there is no definite timeline, we estimate that the stake
may eventually cost K-REIT around SGD1.0b, valued at a capital value
of SGD2,400 psf. With its current look-through gearing already at
around 42%, an equity fund-raising will be inevitable.
At tract iveness to wane over time. At current levels, K-REIT offers
DPU yields of around 7%, mainly backed by the rental supports. Longer
term however, DPU yields are likely to normalise to around 5.5%, which
is not attractive for a REIT in a sector expected to face economicheadwinds. We initiate coverage on K-REIT with a SELL rating and a
DDM-derived target price of SGD0.83.
KREIT Asia Summary Earnings TableFYE Dec (SGD m) 2010A 2011A 2012F 2013F 2014FRevenue 84.6 78.0 174.7 184.6 197.0Net property income 67.3 61.7 131.2 138.3 147.1Distributable income 85.6 113.0 178.2 184.9 170.6DPU (SG cts) 6.3 8.3 6.9 7.2 6.6DPU growth (%) 19.6 30.8 -15.9 3.0 -8.4DPU yield (%) 6.4 8.3 7.0 7.2 6.6P/BV (x) 0.7 0.8 0.8 0.8 0.8Gearing(debt-to-deposited assets) (%)
31.8 37.0 37.8 38.8 39.2
ROE (%) 5.3 9.1 3.2 3.7 4.1ROA (%) 3.5 5.1 1.7 1.9 2.1
Source: Company, Maybank KE
SELL
Share price: SGD0.985Target price: SGD0.830
Wilson [email protected](65) 6432 1454
Stock InformationDescription: A commercial REIT under the Keppel Group,K-REIT has a portfolio of International Grade A officeproperties in Singapore, as well as three office properties inAustralia.
Ticker: KREIT SPShares Issued (m): 2,559.2Market Cap (USD m): 1,958.03-mth Avg Daily Turnover (USD m): 0.8ST Index: 2,759.58Free float (%): 23.7
Major Shareholders: %Keppel Land 46.3Keppel Corp 30.0
Key Indicators
ROE annualised (%) 9.1Debt to deposited assets (%) 37.0NAV/shr as at Mar 2012 (SGD) 1.25Interest cover (x) 4.0
Historical Chart
Performance:
52-week High/Low SGD1.272/SGD0.80
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -1.5 7.1 14.5 -17.1 18.7
Relative (%) 6.3 15.6 14.6 -4.7 13.8
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Singapore REITs
PROFIT AND LOSS (SGD m) CASH FLOW (SGD m)
FYE Dec 2010A 2011A 2012F 2013F 2014F FYE Dec 2010A 2011A 2012F 2013F 2014F
Gross Income 84.6 78.0 174.7 184.6 197.0 Operating cash flow 323.6 208.0 297.7 283.1 213.8Operating expenses 17.3 16.3 43.4 46.4 49.9 Net profit 190.3 196.0 187.3 190.6 134.3
Net property income 67.3 61.7 131.2 138.3 147.1 Depreciation & amortisation 0.7 0.4 0.3 0.3 0.4Net interest -4.8 -5.9 -33.1 -33.7 -35.5 Change in working capital 28.3 -66.4 18.4 0.5 0.4
Interest income 12.1 23.0 20.4 22.1 22.6 Others 104.3 78.0 91.8 91.7 78.6
Interest expense -16.8 -28.9 -53.6 -55.8 -58.1 Investment cash flow 554.3 -238.3 -439.5 5.5 5.4Rental support 26.4 45.6 78.7 72.8 39.7 Net capex -30.0 -279.2 0.0 0.0 0.0
Managers fees -15.1 -23.7 -32.0 -32.4 -32.8 Change in LT investment 582.7 39.3 -440.2 4.9 4.9
Trust expenses -28.4 -41.3 -67.2 -59.6 -35.5 Change in other assets 1.6 1.6 0.6 0.6 0.5
Share of associate income 9.7 37.4 37.8 44.1 51.4 Financing cash flow -554.1 36.1 -328.5 -298.6 -297.5
Divestment gain/(loss) 26.0 0.0 0.0 0.0 0.0 Change in share capital -5.0 -12.7 -10.0 -10.9 -9.9Revaluation gain/(loss) 31.6 228.7 0.0 0.0 0.0 Net change in debt -263.4 328.1 -62.6 -28.3 -30.3
Net profit 109.2 296.1 102.1 117.0 127.6 Change in other LT liab. -70.8 -61.8 -75.6 -75.6 -76.3
Non-tax deductible expenses -23.6 -177.1 84.0 76.8 53.0 Distribution to unitholders -214.9 -217.6 -180.4 -183.8 -181.0
Distributable income 85.6 113.0 178.2 184.9 170.6 Net cash flow 323.8 5.8 -470.4 -10.0 -78.4
EBITDA 82.4 116.4 214.1 221.1 203.7 Free cash flow 876.3 -32.0 -142.4 288.0 218.7
DPU (SG cts ) 6.3 8.3 6.9 7.2 6.6
BALANCE SHEET (SGD m) KEY RATIOS
FYE Dec 2010A 2011A 2012F 2013F 2014F FYE Dec 2010A 2011A 2012F 2013F 2014F
Total assets 3,115.9 5,856.9 6,038.0 6,082.6 6,101.6 Growth (% YoY)
Current assets 72.0 121.9 323.0 378.1 414.2 Sales 34.6 -7.8 124.0 5.7 6.7
Cash & ST investment 49.9 85.7 248.9 300.1 331.3 Net property income 37.7 -8.4 112.9 5.4 6.4
Trade receivables 22.1 30.6 68.5 72.4 77.3 Distributable income 21.4 31.9 57.8 3.7 -7.7
Inventories 0.0 5.6 5.6 5.6 5.6 Net profit -337.9 171.1 -65.5 14.6 9.0
Other assets 3,043.9 5,735.0 5,715.0 5,704.6 5,687.5 DPU 19.6 30.8 -15.9 3.0 -8.4
Investment properties 1,025.6 3,472.1 3,482.5 3,492.9 3,503.4 Profitability (%)
Associates ad investments 1981.0 2112.9 2148.0 2185.0 2184.0 Operating margin 79.6 79.1 75.1 74.9 74.7
Net fixed assets & others 37.2 150.0 84.5 26.6 0.0 EBITDA margin 97.5 149.3 122.6 119.7 103.4
Total l iabilities 1,060.4 2,381.4 2,588.2 2,679.0 2,729.5 Net margin 129.2 379.8 58.4 63.4 64.8
Current liabilities 64.3 660.7 285.8 296.3 369.3 ROA 3.5 5.1 1.7 1.9 2.1
Trade and other payables 58.6 144.0 172.4 182.3 194.5 ROE 5.3 9.1 3.2 3.7 4.1
ST borrowings 0.0 510.1 100.0 100.0 160.0 Stability
Current portion of sec deposit 2.4 1.2 1.2 1.2 1.2 Gross debt/equity (%) 48.2 66.4 70.7 74.3 76.3
Taxation 3.3 5.4 12.1 12.8 13.7 Net debt/equity (%) 45.7 63.8 63.0 64.9 65.7
Long-term liabilities 996.1 1,720.7 2,302.4 2,382.7 2,360.2 Int. coverage (X) 4.9 4.0 4.0 4.0 3.5
Long-term debts 989.9 1,655.8 2,183.5 2,258.5 2,229.3 Int. & ST debt coverage (X) -4.0 0.1 2.8 3.1 1.4
Others 6.2 64.9 118.9 124.2 130.9 Cash flow int. coverage (X) -19.2 -7.2 -5.6 -5.1 -3.7
Unitholders funds 2,055.6 3,262.6 3,229.2 3,174.0 3,132.4 Cash flow int. & ST debt (X) -19.2 0.4 6.4 6.4 2.1
Net tangible assets 2,055.6 3,262.6 3,229.2 3,174.0 3,132.4 Current ratio (X) 1.1 0.2 1.1 1.3 1.1Quick ratio (X) 1.1 0.2 1.1 1.3 1.1
Net debt (SGD m) 928.3 1,440.6 1,915.5 1,925.5 1,915.8
Per share data (SG cts)
DPU 6.3 8.3 6.9 7.2 6.6
CFPS 23.7 8.1 11.5 10.9 8.2
BVPS 150.4 127.1 124.9 121.9 119.5
SPS 6.2 3.0 6.8 7.1 7.5
EBITDA/share 6.0 4.5 8.3 8.5 7.8
Source: Company, Maybank KE
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Singapore REITs
Mapletree Logistics Trust
Acquisitions to Bear FruitScale and stability advantages. Mapletree Logistics Trust (MLT)
yielded an annualised TRR of 9.30% in our TRR study. Its recent issue
of perpetual securities has also lowered its gearing from 41.4% in 4Q11
to 35.2% in 5Q11. With a portfolio of 109 properties in Asia, MLT is
increasingly being viewed as a proxy to the broader Asian logistics
sector, a Pan-Asian partner for global players keen to expand their
regional footprint. No longer is it just an industrial landlord alongside
Global Logistic Properties (GLP), Prologis and Goodman. We believe
MLT will continue to reap the benefits of its large installed base, in
terms of economies of scale. With a sale-and-leaseback-heavy portfolio,
occupancy rate of 98.7% and an average lease expiry of six years, itprovides a high degree of predictable cash flow and stable rental
income. In addition, MLT has a strong sponsor, Mapletree Investments,
and has forged a strategic alliance with Itochu Corporation in Japan.
Yield spread vis--vis A-REIT. MLT has historically traded at a one-
year forward DPU yield-spread of 135bps above A-REIT. We believe
this premium is due to its footprint in other geographic regions (country
risk exposure) and its relative higher gearing. MLT is currently trading at
51bps spread above A-REIT.
Acqu is it ions to bear frui t. MLTs assets have increased by almost
ninefold since the company listed in J uly 2005. Given its larger asset
base, macro-economic headwinds and unfavourable risk-reward ahead,
we expect management to trade growth for stability in turbulent times.
MLT also has one of the industrys highest weighted average lease
expiry profiles (six years). Despite having exposure to six overseas
markets, Singapore and J apan (tier-1 mature markets) still constitute
73% of revenue and 72% of NPI in FY11 and 70% of our FY12F GAV,
which should prove defensive in volatile markets.
Assume coverage with BUY and TP of SGD1.06. MLT has an existing
portfolio yield of 6% as seen in its latest 5Q11* results. Barring further
acquisitions, it should be able to maintain relatively stable DPU payouts
going forward. Mounting uncertainties in the recent month have skewed
risks to the downside but we are confident that MLTs stable assets and
rental income resilience will help it navigate the choppy waters. At thecurrent price, MLT is trading at 7.2% FY12F yield. We assume
coverage with a BUY rating and target price of SGD1.06.*5Q11: MLT is changing its financial year from Dec to Mar,
Mapletree Logistics Trust Summary Earnings Table
FYE Dec(SGD m) FY2010 FY2011* FY2012F FY2013F FY2014F
Revenue 218.9 339.5 286.1 288.6 291.2
Net property income 193.0 293.6 247.4 249.6 251.8
Distributable income 130.1 199.9 169.3 170.8 172.6
DPU (cents) 6.1 8.2 7.0 7.0 7.1
DPU growth (%) 1.2 35.3 -15.3 0.9 1.1
DPU yield (%) 6.2 8.5 7.2 7.2 7.3
P/BV(x) 1.1 1.1 0.9 0.9 0.9Gearing (Debt to deposited assets) (%) 37.5 35.0 35.4 35.4 35.4
ROE (%) 7.8 14.7 7.7 7.8 7.9
ROA (%) 4.5 7.5 4.0 4.0 4.0
Source: Company, Maybank KE
BUY
Share price: SGD0.975Target price: SGD1.06
ONG Kian [email protected](65) 6432 1470
Stock InformationDescription: Mapletree Logistics Trust is an Asia-focusedlogistics real estate investment trust. The Company invests ina diversified portfolio of income-producing real estate whichis used for logistics purposes.
Ticker: MLT SPShares Issued (m): 2,426.3Market Cap (USD m): 1,837.53-mth Avg Daily Turnover (USD m): 1.7ST Index: 2,759.58Free float (%): 58.8
Major Shareholders: %Temasek Holdings 41
Key Indicators
ROE annualised (%) 7.7Debt to deposited assets (%): 35.2NAV/shr (SGD): 0.90Interest cover (x): 6
Historical Chart
Performance:
52-week High/Low SGD0.99/SGD0.80
1-mth 3-mth 6-mth 1-yr YTDAbsolute (%) -0.5 6.0 16.8 6.6 15.4
Relative (%) 7.4 14.4 16.9 22.5 10.6
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Singapore REITs
Figure 14: MLT FY12F GAV breakdown by geography
Singapore
42%
Hong Kong
16%
China
4%
Malaysia
4%
J apan
29%
South Korea
5%
Vietnam
0%
Source: Company, Maybank KE
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Singapore REITsPROFIT AND LOSS (SGD m) BALANCE SHEET (SGD m)
YE Dec 2010A 2011A* 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Gross Revenue 218.9 339.5 286.1 288.6 291.2 Total assets 3,614.3 4,272.5 4,289.7 4,290.9 4,292.0
Property expenses -25.8 -46.0 -38.7 -39.1 -39.4 Current assets 155.1 214.2 206.8 208.0 209.1
Net Property Income 193.0 293.6 247.4 249.6 251.8 Cash & equivalent 108.4 167.6 169.2 170.2 171.2
Interest income 0.3 0.9 0.8 0.8 0.8 Trade receivables 21.6 25.7 16.7 16.8 17.0
Other income 0.0 0.0 0.0 0.0 0.0 Others 25.1 20.9 20.9 20.9 20.9Manager's management fees -23.1 -34.4 -29.0 -29.2 -29.5 Non-current assets 3,459.2 4,058.3 4,082.9 4,082.9 4,082.9
Trustee's fee -0.5 -0.7 -0.6 -0.6 -0.6 Investment properties 3,459.2 4,058.3 4,082.9 4,082.9 4,082.9
Other trust expenses -2.4 9.4 -4.6 -4.6 -4.7 Plant & equipment 0.0 0.0 0.0 0.0 0.0
Borrowing costs -29.2 -44.4 -34.4 -34.7 -34.7 Others 0.0 0.0 0.0 0.0 0.0
Others 0.0 0.0 0.0 0.0 0.0 Total li abilities 1,539.1 1,734.8 1,736.5 1,737.6 1,738.8
Net income b/f tax & change in 138.1 224.4 179.6 181.2 183.1 Current liabilities 319.3 427.1 378.2 451.9 206.2
Change in FV of Inv Pty 32.1 113.0 0.0 0.0 0.0 Trade and other payables 102.8 152.4 129.7 130.9 132.0
Others 0.0 0.8 0.0 0.0 0.0 Short term borrowings 172.3 243.8 217.8 290.4 43.6
Income tax -13.4 -27.9 -10.0 -10.1 -10.2 Others 44.2 30.9 30.6 30.6 30.6
Total return 162.7 321.8 169.6 171.1 172.9 Long-term liabilities 1,219.8 1,307.7 1,358.3 1,285.7 1,532.5
Non-tax deductibles & o'er adj -32.6 -121.9 -0.3 -0.3 -0.3 Long-term debts 1,181.8 1,251.3 1,301.8 1,229.2 1,476.1
Distributable income 130.1 199.9 169.3 170.8 172.6 Others 38.0 56.4 56.4 56.4 56.4
DPU (cts) 6.1 8.2 7.0 7.0 7.1 Unitholders' funds 2,072.8 2,186.4 2,201.9 2,201.9 2,201.9
Perpetual securities 0.0 344.0 344.0 344.0 344.0
*2011 has a change of FY from Dec to Mar (5 Qtrs) Non-controlling interests 2.4 7.4 7.4 7.4 7.4
CASH FLOW (SGD m) KEY RATIOS
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Operating cash flows 165.4 305.4 195.6 212.1 214.1 Growth (% YoY)
Total return 162.7 321.8 169.6 171.1 172.9 Sales 5.9 55.1 -15.7 0.9 0.9
Adjustments for NPI 6.8 52.1 -15.7 0.9 0.9
Net interest expense 28.0 41.6 33.7 33.9 33.9 Net income 71.8 97.8 -47.3 0.9 1.1
Depreciation 0.7 1.2 0.0 0.0 0.0 Distributable income 10.3 53.7 -15.3 0.9 1.1
Revaluation of Inv Pty -32.1 -113.0 0.0 0.0 0.0 DPU 1.2 35.3 -15.3 0.9 1.1
Others 2.2 13.4 10.0 10.1 10.2 Profitability (%)
Trade and other receivables -12.7 -3.8 9.0 -0.1 -0.1 NPI margin 88.2 86.5 86.5 86.5 86.5
Trade and other payables 22.0 52.8 -22.7 1.1 1.2 Net income margin 74.3 94.8 59.3 59.3 59.4
Income tax paid -5.4 -8.7 -4.0 -4.0 -4.0 ROA 4.5 7.5 4.0 4.0 4.0
Investi ng cash flows -566.1 -514.0 -23.8 0.8 0.8 ROE 7.8 14.7 7.7 7.8 7.9
PPE 0.0 0.0 0.0 0.0 0.0 Stability
Capex on Inv Pty & others 0.0 0.0 0.0 0.0 0.0 Gross debt/asset (%) 37.5 35.0 35.4 35.4 35.4
Purchase of Pty -565.1 -565.6 -24.6 0.0 0.0 Total debt/Investment Prop 39.1 36.8 37.2 37.2 37.2
Others -1.0 51.7 0.8 0.8 0.8 Int. coverage (X) 5.7 6.1 6.2 6.2 6.3
Financing cash flows 443.3 267.8 -170.2 -211.9 -213.8 Int. & ST debt coverage (X) 0.8 0.9 0.8 0.7 2.8
New Issue proceeds 305.0 0.0 0.0 0.0 0.0 Cash flow int. coverage (X) 5.7 6.9 5.7 6.1 6.2
Borrowing costs -28.2 -38.8 -31.0 -31.2 -31.2 Per share data (Scts)
Net borrowing proceeds 282.8 150.3 24.6 0.0 0.0 EPU 6.7 13.2 7.0 7.0 7.1
Distribution to unitholders -115.5 -190.5 -169.3 -170.8 -172.6 DPU 6.1 8.2 7.0 7.0 7.1Others -0.8 346.7 5.5 -9.9 -10.0 CFPS 7 13 8 9 9
Net change in cash 42.6 59.2 1.6 1.0 1.0 NAV 85.53 90.11 105.23 105.23 105.23
Beginning cash balance 67.4 108.4 167.6 169.2 170.2 SPS 9 14 12 12 12
Forex -1.6 0.0 0.0 0.0 0.0
Ending cash balance 108.4 167.6 169.2 170.2 171.2
Free cash flow 165.4 305.4 195.6 212.1 214.1
Source: Company, Maybank KE
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Singapore REITs
Starhil l Global REIT
Courting Greater UpsideDeserving better. A prime retail play trading at a sharp 27% discount
to its book value, Starhill Global REIT deserves better in our opinion.
For one, its key assets are in the coveted Orchard Road area, where
tight supply and the entry of new international retailers should give it
greater bargaining power in terms of leasing its space. We like Starhill
for the rental upside it stands to enjoy in Singapore and income stability
in Malaysia and Australia.
Courting greater upside. A number of Starhills major leases (42% of
gross rent) are due to expire next year. Chief among them is its master
lease with Toshin at Ngee Ann City mall that has an option for renewal.
If Starhill wins its fight at the Court of Appeal for a transparent rentreview mechanism, its ability to maximise the potential for rental
increase at the mall would be assured. Currently, the 225,000-sq-ft
space is estimated to be leased at low teens psf to Toshin, which then
subleases it to luxury brands like Chanel, Louis Vuitton, Burberry and
Tiffany & Co. In prime Orchard Road, the average retail rent currently
stands at SGD31.60 psf pm, according to CRBE.
Race for prime space. CBRE estimates that new supply of retail spacewill amount to 4.37m sq ft between 2012 and 2015. Of this, only 12.4%or 540,000 sq ft will be located in Orchard Road and the rest in non-prime areas. Several international retailers such as Abercrombie &Fitch and Michael Kors opened their maiden stores in Orchard Road
last year and other new-to-market brand names are said to be huntingfor prime retail space. We expect Starhill to benefit from the scarcity ofnew prime retail space and healthy retail sales growth in Singapore. Itsasset enhancement initiative at Wisma Atria, targeted for completion by3Q12, will also boost DPU in the near term.
No major refinancing need yet. Starhills next major refinancing is duenext year (SGD548m, or 64% of borrowings) and only SGD26m is duethis year. Gearing is relatively low at 30.8%, implying debt headroom ofSGD451m for acquisitions before hitting managements target of 40%.
Consumer discretionary vulnerable, assume coverage with HOLD.
Consumer discretionary income is still susceptible to downturns. We
caution that macro-economic headwinds may curtail the number of
business and leisure travellers who frequent the Orchard Road malls. If
this eventuates, Starhills tenant lease structures would provide some
protection via rental income but we think it will still inhibit its ability to
sustain tenant base growth rates. At 6.8% FY12F yield, we assume
coverage with a HOLD rating and DDM-derived target price of SGD0.65.
Starhill Global REIT Summary Earnings Table
FYE Dec(SGD m) FY2010 FY2011 FY2012F FY2013F FY2014FRevenue 165.7 180.1 183.0 189.6 194.8Net property income 130.5 143.6 146.2 151.4 156.9Distributable income 82.5 90.8 91.7 96.1 100.8DPU (cents) 3.9 4.1 4.2 4.4 4.6DPU growth (%) 2.5 5.7 3.0 3.7 3.9DPU yield (%) 6.2 6.6 6.8 7.0 7.3
P/BV(x) 0.7 0.7 0.7 0.7 0.7Gearing(Debt to deposited assets) (%)
29.9 30.5 30.3 30.2 30.0
ROE (%) 8.2 5.6 5.1 5.3 5.5ROA (%) 5.4 3.7 3.4 3.5 3.6
Source: Company, Maybank KE
HOLD
Share price: SGD0.625Target price: SGD0.65
ONG Kian [email protected](65) 6432 1470
Stock Information
Description: Invests mainly in retail and office assets inSingapore, Malaysia, China, Australia and Japan, and has aportfolio size of SGD2.7bn. Managed by YTL Starhill GlobalREIT Management Ltd.
Ticker: SGREIT SPShares Issued (m): 1,943.0Market Cap (USD m): 950.83-mth Avg Daily Turnover (USD m): 0.7ST Index: 2,759.58Free float (%): 70.5
Major Shareholders: %YTL Corp Bhd 28.7
AIA 9.8
Key Indicators
ROE annualised (%) 5.6Debt to deposit assets (%): 30.4NAV/shr (SGD): 0.96Interest cover (x): 4.8
Historical Chart
Performance:
52-week High/Low SGD0.665/SGD0.550
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -3.8 4.1 9.6 -0.8 11.5Relative (%) 3.8 12.4 9.7 14.1 6.9
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Singapore REITs
PROFIT AND LOSS (SGD m) BALANCE SHEET (SGD m)
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Gross Revenue 165.7 180.1 183.0 189.6 194.8 Total assets 2,786.6 2,839.1 2,855.1 2,871.2 2,887.5
Property expenses -35.2 -36.5 -36.7 -38.1 -37.9 Current assets 117.7 110.8 126.7 142.8 159.0
Net Property Income 130.5 143.6 146.2 151.4 156.9 Cash & equivalent 113.0 108.0 123.9 139.9 156.0
Finance income 0.8 0.7 0.7 0.7 0.8 Trade receivables 4.7 2.5 2.6 2.6 2.7FV adj on security deposits 1.8 -0.1 0.0 0.0 0.0 Non-current assets 2,668.9 2,728.3 2,728.4 2,728.4 2,728.5
Management fees -13.0 -13.9 -13.9 -14.4 -14.8 Investment properties 2,654.5 2,709.7 2,709.7 2,709.7 2,709.7
Trust expenses -3.5 -3.4 -3.5 -3.6 -3.7 Net fixed assets 0.6 1.9 1.9 1.9 2.0
Finance expense -32.3 -34.3 -28.6 -28.9 -29.2 Others 13.8 16.7 16.7 16.8 16.8
Net income b/f tax & change in 84.4 92.6 101.0 105.3 110.0 Total liabil ities 956.5 988.1 989.2 990.4 991.5
Change in FV of Inv Pty 76.4 28.3 0.0 0.0 0.0 Current liabilities 60.2 101.5 101.9 102.3 102.8
Others -7.4 -11.2 0.2 0.2 0.2 Trade and other payables 33.5 42.9 43.4 43.8 44.2
Income tax -3.3 -5.2 -5.3 -5.4 -5.5 Short term borrowings 1.1 27.9 27.9 27.9 27.9
Total return 150.0 104.4 95.9 100.1 104.7 Others 25.6 30.7 30.7 30.7 30.7
Non-tax deductibles & o'er adj -67.6 -13.6 5.4 5.6 5.7 Long-term liabilities 126.7 896.2 886.6 887.3 888.0
Distributable income 82.5 90.8 91.7 96.1 100.8 Long-term debts 832.5 838.3 838.3 838.3 838.3
DPU 3.9 4.1 4.2 4.4 4.6 Others 63.8 48.4 49.0 49.8 50.5
Unitholders' funds 1,830.2 1,851.0 1,865.9 1,880.9 1,896.0
CASH FLOW (SGD m) KEY RATIOS
YE Dec 2010A 2011A 2012F 2013F 2014F YE Dec 2010A 2011A 2012F 2013F 2014F
Operating cash flows 93.0 119.1 131.8 130.0 134.6 Growth (% YoY)
Total return before tax -41.6 153.4 109.6 101.2 105.5 Sales 23.1 8.7 1.6 3.6 2.7
Adjustments for NPI 22.0 10.1 1.9 3.5 3.6
Net interest expense 23.3 31.4 33.6 27.9 28.1 Net income -424.5 -30.4 -8.2 4.4 4.6
Depreciation 0.2 0.3 0.3 0.4 0.4 Distributable income 9.3 10.1 1.0 4.8 4.9
Mgt fees in units 5.6 0.0 0.0 5.6 5.8 DPU 2.5 5.7 3.0 3.7 3.9
Others 109.4 0.0 -16.9 -0.2 -0.2 Profitability (%)
Trade and other receivables 0.4 -1.3 -9.6 -0.1 -0.1 NPI margin 78.7 79.7 79.9 79.9 80.5
Trade and other payables -2.2 4.6 17.3 0.5 0.5 Net income margin 90.6 58.0 52.4 52.8 53.7
Income tax paid -2.1 -3.3 -2.5 -5.3 -5.4 ROA 5.4 3.7 3.4 3.5 3.6
Investi ng cash flows -15.2 -410.0 -17.1 15.6 6.3 ROE 8.2 5.6 5.1 5.3 5.5
PPE -0.2 -7.4 -1.6 -7.6 -7.8 Stability
Capex on Inv Pty & others -0.5 -290.3 -16.2 22.5 13.4 Gross debt/asset (%) 29.9 30.5 30.3 30.2 30.0
Interest on deposits 0.8 0.7 0.7 0.7 0.8 Total debt/Investment Prop 31.4 32.0 32.0 32.0 32.0
Others 0.0 0.0 0.0 0.0 1.0 Int. coverage (X) 3.6 3.7 4.5 4.6 4.8
Financing cash flows 188.1 107.1 -121.2 -129.7 -124.9 Int. & ST debt coverage (X) 3.5 2.0 2.3 2.4 2.4
Equity net proceeds 328.0 0.0 0.0 0.0 0.0 Cash flow int. coverage (X) 3.7 3.8 4.5 4.7 4.8
Borrowing costs -20.2 -37.5 -31.7 -28.6 -28.9 Per share data (Scts)
Net borrowing proceeds -47.2 221.4 0.5 0.0 0.0 EPU 7.8 5.4 4.9 5.1 5.3
Distribution to unitholders -72.5 -74.3 -80.6 -91.7 -96.1 DPU 3.9 4.1 4.2 4.4 4.6Net change in cash 265.9 -183.8 -6.5 15.9 16.0 CFPS 4.8 5.5 6.0 6.0 6.2
Beginning cash balance 32.7 297.9 113.0 108.0 123.9 NAV 0.9 0.9 0.9 0.9 0.9
Forex -0.6 -1.0 1.4 0.0 0.0 SPS 8.6 9.3 8.4 8.7 8.9
Ending cash balance 297.9 113.0 108.0 123.9 139.9
Free cash flow 92.3 -178.6 114.0 144.9 140.2
Source: Company, Maybank KE
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Singapore REITs
Suntec REIT
Looks Fairly Valued; Office Drag RemainsPrime office and retail play. With investments in five commercial
properties in Singapores Central Business District, Suntec REIT offers
exposure to prime office (68% of income contribution), retail (29%) and
convention space (3%). Its portfolio, valued at SGD7.7b, has a total
NLA of 4.1m sq ft with office and retail occupancy rates at 99% and
97%, respectively.
Downgrading office rental assumptions.The stock of Grade A office
space (including Marina South) will increase by 91% between 2H12 and
2016. Consequently, we expect Grade A office rents to fall by 8-13% in
2013-14; 43.6% of Suntecs office leases are up for renewal in thosetwo years and we expect DPU to decline by 1.8% CAGR over FY11-14.
MBFC Phase 2 acquisition unlikely in 2012. Suntec acquired a one-
third stake of MBFC Phase 1 from affiliate Cheung Kong four months
after its completion in 2010. MBFC Phase 2 was completed in 1Q12.
We estimate it will cost Suntec approximately SGD1.04b to acquire a
similar one-third stake. If fully debt-funded, the purchase will raise
Suntecs aggregate leverage to 46.6% (from 39.2% in 1Q12), above its
optimal gearing of 40-45%. Equity fund-raising may be required, which
poses a challenge as the stock is trading at a 35% discount to book.
We therefore believe that it will be too strenuous for Suntec to complete
the acquisition in 2012.Assume coverage w ith HOLD and TP of SGD1.285. We like Suntecs
retail exposure, which not only sets it apart from pure office landlords
like K-REIT, but also serves as a buffer should the market take a turn
for the worst. Moreover, we do not expect the near-term growth driver
(MBFC Phase 2 acquisition) to happen in 2012. At its current price,
Suntec is trading at 7.2% FY12F yield. We assume coverage with a
HOLD recommendation and DDM-derived target price of SGD1.285.
Competition and macro-economic risks remain our top concerns for
Suntec and we expect management to take steps to address these
issues going forward.
Suntec REIT Summary Earnings TableFYE Dec(SGD m) FY2010 FY2011 FY2012F FY2013F FY2014F
Revenue 249.5 270.3 255.3 276.5 302.0
Net property income 193.1 193.4 197.5 214.0 233.7Distributable income 182.5 220.7 206.9 209.6 215.6DPU (cents) 9.9 9.9 9.2 9.2 9.4
DPU growth (%) -15.8 0.7 -7.5 0.4 1.9DPU yield (%) 7.7 7.7 7.2 7.2 7.3
P/BV(x) 71.2 64.7 64.3 64.0 63.6Gearing (Debt to deposited assets) (%) 39.4 38.0 37.1 37.4 37.1
ROE (%) 9.7 14.3 5.5 5.4 5.6
ROA (%) 5.8 8.4 3.3 3.2 3.3
Source: Company, Maybank KE
HOLD
Share price: SGD1.285Target price: SGD1.285
ONG Kian [email protected](65) 6432 1470
Stock Information
Description: Suntec Real Estate Investment Trust is a real
estate investment trust established with the objective ofinvesting in income-producing real estate properties whichare used primarily for retail and office properties.
Ticker: SUN SPShares Issued (m): 2,237.4Market Cap (USD m): 2,241.93-mth Avg Daily Turnover (USD m): 6.4ST Index: 2,759.58Free float (%): 89.8
Major Shareholders: %Suntec City Development 6.23
Key Indicators
ROE annualised (%) 5.7Debt to deposit assets (%): 39.2NAV/shr (SGD): 1.99Interest cover (x): 4.2
Historical Chart
Performance:
52-week High/Low SGD1.56/SGD1.05
1-mth 3-mth 6-mth 1-yr YTD
Absolute (%) -1.5 4.9 13.2 -14.0 20.0
Relative (%) 6.3 13.2 13.2 -1.1 15.1
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Singapore REITsFigure 15: Suntec REIT FY12F GAV
8%4%
15%
19%
54%
100%
0%
10%
20%
30%
40%50%
60%
70%
80%
90%
100%
Suntec City
(Office +Mall)
Suntec
Convention
(consolidated
if 100%)
Park Mall One Raffles
Quay
(33% interest)
MBFC1
(33% interest)
Total
Source: Maybank KE
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Singapore REITs
RESEARCH OFFICESREGIONAL
PKBASURegional Head, Research & Economics(65) 6432 1821 [email protected]
WONG Chew Hann, CARegional Head of Institutional Research(603) 2297 8686 [email protected]
THAM Mun HonRegional Strategist(852) 2268 0630 [email protected]
ONG Seng YeowRegional Products & Planning
(852) 2268 0644 [email protected]
ECONOMICSSuhaimi ILIASChief Economist
Singapore | Malaysia(603) 2297 8682 [email protected]
Luz LORENZOEconomist
Philippines | Indonesia(63) 2 849 8836 [email protected]
Chaiyachoke SUWISUTTANGKULEconomist Thailand(662) 658 6300 [email protected]
MALAYSIAWONG Chew Hann, CAHead of Research(603) 2297 8686 [email protected] Strategy Construction & InfrastructureDesmond CHNG, ACA(603) 2297 8680 [email protected] Banking - RegionalLIAW Thong Jung(603) 2297 8688 [email protected] Oil & Gas Automotive ShippingONG Chee Ting(603) 2297 8678 [email protected] Plantations
Mohshin AZIZ(603) 2297 8692 [email protected] Aviation Petrochem PowerYIN Shao Yang, CPA(603) 2297 8916 [email protected] Gaming Regional Media PowerWONG Wei Sum, CFA(603) 2297 8679 [email protected] Property & REITsLEE Yen Ling(603) 2297 8691 [email protected] Building Materials Manufacturing Technology
LEE Cheng Hooi Head of [email protected] Technicals
HONG KONG / CHINAEdward FUNGHead of Research
(852) 2268 0632 [email protected] ConstructionIvan CHEUNG(852) 2268 0634 [email protected] Property IndustrialIvan LI(852) 2268 0641 [email protected] Banking & FinanceJacqueline KO(852) 2268 0633 [email protected] Consumer Staples
Andy POON(852) 2268 0645 [email protected] Telecom & equipmentSamantha KWONG(852) 2268 0640 [email protected] Consumer Discretionaries
Alex YEUNG(852) 2268 0636 [email protected] IndustrialCatherine CHAN(852) 2268 0631 [email protected]
CementAnit a HWANG, CFA | Jacky WONG, [email protected] | [email protected](852) 2268 0142 | (852) 2268 0107 Special Situations Quants
INDIAJigar SHAHHead of Research(91) 22 6623 2601 [email protected] Oil & Gas Automobile Cement
Anubh av GUPTA(91) 22 6623 2605 [email protected] Metal & Mining Capital goods PropertyHaripreet BATRA(91) 226623 2606 [email protected] Software MediaGanesh RAM(91) 226623 2607 [email protected]
Telecom ContractorDarpin SHAH(91) 226623 2610 [email protected] Banking & Financial ServicesGagan KWATRA(91 )226623 2612 [email protected] Small Cap
SINGAPOREStephanie WONGHead of Research(65) 6432 1451 [email protected] Strategy Small & Mid CapsGregory YAP(65) 6432 1450 [email protected] Technology & Manufacturing Telcos - RegionalWilson LIEW(65) 6432 1454 [email protected] Hotel & Resort Property & ConstructionJames KOH(65) 6432 1431 [email protected] Logistics
Resources Consumer Small & Mid CapsYEAK Chee Keong, CFA(65) 6433 5730 [email protected] Healthcare Offshore & Marine
Ali son FOK(65) 6433 5745 [email protected] Services S-chipsBernard CHIN(65) 6433 57