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Analysts mostly positive on CICT' s acquisition of office on Robinson Rd
ANALYSTS are generally positive on CapitaLand Integrated Commercial Trust : C38U 0% (CICT)' s acquisition of a Grade-A office building at 79 Robinson Road for S$1.3 billion.
On Friday (Mar 25), CICT and CapitaLand Open End Real Estate Fund (Coref) said they had entered into an agreement to purchase the property, which will see them acquiring 70 per cent and 30 per cent respectively of the shares of the property holding company Southernwood Property.
UOB Kay Hian (UOBKH) analyst Jonathan Koh said the building' s net property income yield of 4 per cent is attractive for Grade A office properties in prime locations.
He is also positive on the property' s close proximity to 3 MRT stations - Tanjong Pagar, Prince Edward and Shenton Way - and its diversified blue chip tenant base, noting that it stands to gain from the easing of Covid-19 restrictions in Singapore.
In a report on Monday, the analyst raised his target price on CICT to S$2.50 from S$2.45, and maintained his " buy" call. Koh also raised his FY2023 distribution per unit (DPU) forecast for CICT by 2 per cent to factor in the acquisition.
Maybank analyst Chua Su Tye is also positive on the deal amid an upside in the office rental segment due to tight supply he forecasts Grade A office rents will rise 7 per cent on year by the end of 2022, or 12 per cent over the next 2 years.
The analyst maintained his " buy" call and target price of S$2.55 on CICT in a report on Sunday, noting that CICT' s valuations are competing at 5.2 per cent the brokerage' s estimates for its FY2022 dividend yield and 1.1 times its price to book ratio.
Chua expects improving fundamentals at CICT, noting that CICT' s management may be eyeing a larger acquisition in Singapore from its sponsor, which could potentially be timed with an equity fund raising.
UOBKH' s Koh also said the acquisition signals potential future collaborations between CICT and Coref - a regional open-end fund providing long-term strategic exposure to a diversified portfolio of institutional grade income-producing assets in developed markets within the Asia Pacific region.
Meanwhile, RHB analyst Vijay Natarajan is also positive on the deal, although he said the acquisition price is slightly on the higher side.
Nevertheless, he said there is room for upside potential, noting that the property comes with a long weighted average lease to expiry of 5.8 years and rent step-ups for the majority of leases, while its current occupancy of 92.9 per cent is likely able to benefit from a continued positive demand in the office sector.
In a report on Monday, Natarajan raised his target price on CICT to S$2.35 from S$2.20, after raising his FY2022 to FY2024 DPU estimates by 2 to 3 per cent to account for the acquisition.
The analyst, however, downgraded the counter to a " neutral" call from " buy" , as it is likely nearing fair value. Natarajan said the positives have mostly been priced in, after share prices have risen around 15 per cent since January.
He also noted the likely candidate for CICT' s next Singapore acquisition could be a remaining stake in CapitaSpring, of which CICT owns a 45 per cent stake in.
cna reported incresed inquiry of events, tourist enquiry etc, surely the consumers are coming back.
boom for tourist related. hotel, shopping, transport . recovering u know?
boom for tourist related. hotel, shopping, transport . recovering u know?
CICT and Coref to acquire Grade-A office building on Robinson Road for S$1.3b
CAPITALAND Integrated Commercial Trust (CICT) CapLand IntCom T : C38U +1.36% and CapitaLand Open End Real Estate Fund (Coref) have entered into an agreement to acquire a Grade-A office building at 79 Robinson Road for S$1.3 billion.
The purchase will be done by acquiring 70 per cent and 30 per cent respectively of the shares of the property holding company Southernwood Property Ptd Ltd, CICT and Coref said in a bourse filing on Friday (Mar 25).
Southernwood Property is a special-purpose vehicle in which CapitaLand Investment Limited : 9CI -0.26% (CLI) - which manages Coref - owns a 65 per cent stake. The wholly-owned subsidiaries of Mitsui & Co and Tokyo Tatemono hold the remaining 35 per cent as part of the joint venture.
After the acquisition is completed, Southernwood Property will be converted to a limited-liability partnership (LLP), said CICT and Coref.
&ldquo Immediately upon completion, we will convert that entity (Southernwood Property) into an LLP so that we are able to continue to enjoy tax transparency, like most real estate investment trusts (Reits) are able to enjoy,&rdquo siad Tony Tan, chief executive officer of the manager of CICT, at a briefing following the announcement.
The acquisition is expected to be completed in Q2 2022.
The agreed property value, negotiated on a willing-buyer-willing-seller basis, is S$1.3 billion or S$2,423 per square foot, in line with independent valuations.
It has a net property income yield of 4 per cent, based on pro forma estimates.
CICT plans to fund its share of the acquisition with a combination of divestment proceeds from the sale of shopping mall JCube and debt. Its aggregate leverage would be about 41 per cent, and the acquisition is expected to generate a distribution per unit accretion of 2.9 per cent.
Coref is CLI&rsquo s newly established regional open-end fund that provides global investors with long-term strategic exposure to a diversified portfolio of institutional grade, income-producing assets across developed markets in the Asia-Pacific.
The acquisition will mark Coref' s first acquisition in Singapore and its third asset after investing in 2 properties in Japan.
The Grade A office building is a 29-storey property with a net lettable area of 519, 949 square feet. It has a remaining land tenure of around 45 years and a committed occupancy of 92.9 per cent as at Dec 31, 2021.
Its weighted average lease expiry is 5.8 years and office tenants include multinational companies from various sectors such as banking, legal, insurance and financial services as well as media and telecommunications.
The property is the newest Grade-A office building with ancillary retail space in the Tanjong Pagar area in Singapore. It is also near the upcoming Greater Southern Waterfront, a planned mixed-use district with residential, recreational and workspaces.
Following the acquisition, some 92 per cent of CICT&rsquo s assets will be in Singapore, with another 4 per cent in Germany and the remaining 4 per cent in Australia.
&ldquo It' s still a very heavily Singapore-centric concentration, which is what a lot of investors are asking for,&rdquo Tan said.
Tan noted that the Reit is inclined to continue to add to its Singapore properties. &ldquo There are still opportunities in Singapore that we are assessing,&rdquo he said.
He added that CICT &ldquo will not rule out&rdquo further collaboration with Coref in future.
&ldquo There&rsquo s a lot of similarity in terms of the way we look at investments &hellip The alignment of interests is very strong,&rdquo Tan said.
&ldquo Coref is one of the options we can look at now. But whether we will partner with Coref depends on many circumstances,&rdquo he added. &ldquo But this first joint venture opens up that possibility.&rdquo
thank you.
have a happy sunday and days ahead.
have a happy sunday and days ahead.
cavdinsg ( Date: 19-Feb-2022 22:50) Posted:
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It is said below that they have entered into a swap to convert the HKD loan to SGD, hence removing the currency risk.
pasttime ( Date: 19-Feb-2022 22:23) Posted:
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think the 900m hkd loan is a currency risk. wonder how they will hedge this risk.
borrowing in a basket of currency?
borrowing in a basket of currency?
very good do more of these longer term loan now that interest rate is on the raised.
issue more 10-30 years bond at current low interest rate environment.(provided interest rate not too high)
low interest payment for 10-30 years. and if interest rate increased bond capital value on the market will decreased. so if money situation allows can buy back some at discount to loan face value.
issue more 10-30 years bond at current low interest rate environment.(provided interest rate not too high)
low interest payment for 10-30 years. and if interest rate increased bond capital value on the market will decreased. so if money situation allows can buy back some at discount to loan face value.
CICT issues HK$900m of 2.95% fixed rate notes due in 2031
THE manager of CapitaLand Integrated Commercial Trust (CICT) said on Friday (Feb 18) that a wholly-owned subsidiary of CICT - CMT MTN - has issued HK$900 million of 2.95 per cent fixed rate notes due Feb 18, 2031 to institutional and/or sophisticated investors.
The proceeds from the notes will be used by the CICT group to finance or refinance eligible green projects undertaken by the CICT group in accordance with the CICT Green Finance framework, the manager said in an exchange filing.
CMT MTN has entered into swap transactions to swap the Hong Kong dollar proceeds into Singapore dollar (SGD) proceeds of S$155.2 million at an SGD fixed interest rate of 2.715 per cent per annum.
The notes have been issued under the US$3 billion Euro Medium Term Note Programme established by CMT MTN in March 2010, and are unconditionally and irrevocably guaranteed by HSBC Institutional Trust Services (Singapore), in its capacity as trustee of CICT.
today 2.02... 
sell down
sell downHuatuatua ( Date: 22-Sep-2021 15:24) Posted:
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Pivoting to promising segments an increasingly vital growth driver for Reits
CAPITAMALL Trust (CMT) became Singapore' s first listed real estate investment trust (Reit) in July 2002. In its first 5 full years as a listed entity, distribution per unit (DPU) rose 66 per cent between 2003 and 2007, or a compound annual growth rate of nearly 14 per cent. Acquisitions and asset enhancements were the 2 most important drivers of DPU growth for CMT in its early years.
In recent times, as digitalisation and the Covid-19 pandemic dim prospects of certain property types and create demand in other areas, pivoting a portfolio to a new asset class has become an increasingly vital growth driver for Reits.
Mapletree Industrial Trust (MIT) is a prime example of a Reit that has successfully pivoted by embracing a new class of assets in data centres.
When MIT listed in October 2010, its S$2.1 billion portfolio of Singapore assets comprised flatted factories, business park buildings, stack-up/ramp-up buildings, light industrial buildings, and warehouses.
Fast forward to Sept 30, 2021, MIT has grown its assets under management (AUM) to S$8.5 billion, with data centres contributing around 53 per cent of AUM. Flatted factories, which accounted for 53 per cent of portfolio valuation at the time of listing, took up 17 per cent of AUM as at end-September.
For the 3 months ended September, the occupancy rate of around 95 per cent for MIT' s data centres was slightly higher than that of its overall portfolio.
Data centres are a promising segment. The pandemic has accelerated digitalisation and cloud adoption from the growing use of remote working, video streaming and online gaming, which underpins demand for data centre space.
Investors have cheered MIT' s pivot to data centres - the trust traded at a premium-to-book value of nearly 50 per cent as at Dec 3, 2021. MIT' s premium-to-book exceeds that of Mapletree Commercial Trust, which shares the same sponsor and invests in commercial assets.
Amid the damage to the hospitality sector wrought by the pandemic, hospitality-focused property trusts are busy adding new property types to their portfolios to enhance stability.
Ascott Residence Trust (ART) added rental and student housing to a portfolio consisting largely of serviced residences and hotels. In June, ART completed the purchase of 3 rental housing properties in Sapporo, Japan for a total acquisition price of 6.8 billion yen (S$85 million).
The stapled hospitality group has been buying student housing assets in the US. ART made its maiden purchase in Atlanta, Georgia earlier this year. Subsequently, it co-invested in developing a student housing property with 678 beds near the University of South Carolina. In September, ART bought a 1,005-bed asset in Texas.
Last month, ART completed the purchase of a 548-bed asset in Illinois for US$83 million. With this acquisition, ART increased its student and rental housing properties to about 12 per cent of total portfolio value, keeping it on track to grow longer-stay lodging assets to about 15-20 per cent in the medium term.
CDL Hospitality Trusts (CDLHT), which owns hotels and resorts, has had a torrid time. Net property income (NPI) in 2020 was 51 per cent below that of 2019. For the first 6 months of 2021, NPI improved but distribution per stapled security fell 19 per cent from a year ago.
A few months back, CDLHT revised its principal investment strategy to include rental housing, co-living, student accommodation and senior housing.
On Aug 31, CDLHT entered into a land purchase agreement and a development funding agreement to invest in a build-to-rent residential property in Manchester, UK, for a purchase consideration of £ 73 million (S$136 million).
Besides hospitality trusts, CapitaLand Retail China Trust expanded its investment mandate in 2020, added 5 business park properties in China to its portfolio of malls in China, and changed its name to CapitaLand China Trust (CLCT) with effect from Jan 26, 2021.
Recently, CLCT ventured into China' s logistics sector, purchasing 4 logistics assets in Shanghai, Kunshan, Wuhan and Chengdu for an agreed property value of 1.7 billion yuan (S$351 million).
Investors will be watching how quickly and extensively ART, CDLHT, and CLCT pivot their portfolios to new property asset types.
Reit managers can look forward to earning acquisition and divestment fees from buying promising assets and selling those with limited growth potential as they reconstitute their portfolios.
It' s a lucrative business. ARA Asset Management, which manages funds that invest in real estate assets, real estate credit and infrastructure, achieved earnings before interest, tax, depreciation and amortisation margin on fee revenue of 62 per cent for the first half of 2021. ARA' s co-founder John Lim is on Forbes' list of Singapore' s 50 richest for 2021.
Investors in Singapore-listed Reits pay their external managers a host of fees, including recurrent fees that are typically tied to asset size and/or NPI, as well as fees for acquisitions, divestments and development management.
Whether managers should earn fees from transacting assets is debatable as optimising a Reit' s portfolio composition ought to be part and parcel of the work of a Reit manager. Do this well and a manager will in any case be rewarded with higher recurrent fees tied to asset size and/or income of the said Reit.
MIT' s manager has shown that changing portfolio composition can lead to a Reit fetching premium valuation. This in turn lowers cost of equity, which provides a competitive advantage in scaling up via acquisitions.
Investors buy Reits for stable income that will grow. They are probably agnostic as to whether growth comes via organic means, accretive acquisitions, asset enhancements or a pivot to promising segments.
Against a backdrop of economic disruption, managers need to actively pivot portfolios so that investors can receive growing DPU on a sustainable basis.
When fortunes in one property asset type wane, managers must boldly seek a new pot of gold elsewhere. Expect a broadening of mandates and pivots. Where possible, count on sponsors to line up assets in a promising segment for injection into a Reit.
By mastering the art of rejigging a portfolio, a manager can turbocharge a Reit' s growth, and turn a dull investment story into one bursting with promise.
As I mentioned many times .... only god can see the future, market fortune tellers try to act they can see the future too !
Now $2.12/2.13
Now the self called god of clowns, after telling people to dump CICT and buy CLIM, and then CLIM dropped like a bomb and CICT keeps going up, he declared he would sell because dow is dropping every day. Now both CICT and CLIM both cheonging, he disappeared. And another clown takes over his place and give his expert view that yesterday last minute CLIM drop from 3.20 to 3.16 was pump and dump. Now he dump himself and dare not show face. Dumb clown.
CICT still showing no sign of slowing. Results next month.
CICT still showing no sign of slowing. Results next month.
Huatuatua ( Date: 21-Sep-2021 09:32) Posted:
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Citi sees CICT as next-best proxy to office upcycle after Keppel Reit
CITI Research has started a 90-day " positive catalyst watch" on CapitaLand Integrated Commercial Trust (CICT) CapLand IntCom T: C38U 0% in view of a distribution-in-specie (DIS) overhang removal, as well as potential operational improvement in Q4 FY2021 and distribution per unit (DPU) accretive acquisitions.
In a report issued last Friday, analyst Brandon Lee noted how CICT has underperformed Singapore real estate investment trusts (Reits) since CapitaLand first announced its restructuring in March this year.
" With pure office proxy Keppel Reit Keppel Reit: K71U -1.9% also in the midst of a DIS corporate action by its sponsor, we see CICT as the next-best proxy to the ongoing office upcycle," said Mr Lee, opining that the worst is over for the office sector given a lower pace of office rental decline in Q4 of 2020 versus the previous quarter.
The analyst is anticipating a brighter outlook for the sector in 2022 due to stronger economic normalisation and healthy supply.
In particular, he thinks CapitaLand' s lower stake of 22.9 per cent in CICT post-DIS will " remove a major overhang" on the Reit' s unit price, and partially increase its weightage in major indices given greater free-float market capitalisation.
While he acknowledges that the existing retail and office operational climate is " not ideal" , at the unit price of S$2.00 he values CICT at 0.98 times price-to-book with a yield of 5.4 per cent and 6.1 per cent for FY2021 and FY2022, respectively.
This is compared to the trust' s mean of 1.09 times and respective yields of 5.4 per cent and 5.6 per cent for the estimated periods, as well as retail peers' 1.13 times mean and yields of 4.8 per cent and 5 per cent.
The analyst is also expecting CICT' s Q4 FY2021 financials to mirror that of the previous year in terms of retail traffic and sales, in view of school vacations, the holiday season, and largely-closed international borders along with a rising vaccination rate.
" While Covid infections have been rising since the easing of measures in Aug 2021 and the next few weeks will be crucial, we think that a plateauing of cases and rise in vaccination may bring back confidence in shoppers and workers returning to malls and offices, respectively," he said.
Mr Lee also expects CICT to explore further acquisitions more actively going forward, given how its operations have stabilised and its sponsor aims to expand its funds under management.
The Reit' s three-year assets under management (AUM) compound annual growth rate (CAGR) is estimated to come in at 2.1 per cent, with its last acquisition being in 3Q FY2019.
FY2020 DPU accretion has factored in three potential acquisitions at a 10 per cent valuation premium and 50-50 debt-to-equity funding within the sponsor' s pipeline.
According to the analyst, a potential sale of non-core assets such as One George Street and JCube mall will improve the trust' s gearing and net asset value.
" Medium-term growth engines could come from its sponsor' s sizeable (property) pipeline of S$5 billion and redevelopment and aged assets, while we think CICT is likelier to explore minor asset enhancement initiatives in the short term in light of occupancy preservation," he added.
Some jokers were shouting sell CICT and buy CLIM.
Tao kee if you follow the clowns. Like a circus
Tao kee if you follow the clowns. Like a circus
Citi sees CICT as next-best proxy to office upcycle after Keppel Reit
Citi Research has started a 90-day " positive catalyst watch" on CapitaLand Integrated Commercial Trust (CICT) in view of a distribution-in-specie (DIS) overhang removal, as well as potential operational improvement in Q4 FY2021 and distribution per unit (DPU) accretive acquisitions.In a report issued last Friday, analyst Brandon Lee noted how CICT has underperformed Singapore real estate investment trusts (Reits) since CapitaLand first announced its restructuring in March this year.
" With pure office proxy Keppel Reit also in the midst of a DIS corporate action by its sponsor, we see CICT as the next-best proxy to the ongoing office upcycle," said Mr Lee, opining that the worst is over for the office sector given a lower pace of office rental decline in Q4 of 2020 versus the previous quarter.
The analyst is anticipating a brighter outlook for the sector in 2022 due to stronger economic normalisation and healthy supply.
In particular, he thinks CapitaLand' s lower stake of 22.9 per cent in CICT post-DIS will " remove a major overhang" on the Reit' s unit price, and partially increase its weightage in major indices given greater free-float market capitalisation.
While he acknowledges that the existing retail and office operational climate is " not ideal" , at the unit price of S$2.00 he values CICT at 0.98 times price-to-book with a yield of 5.4 per cent and 6.1 per cent for FY2021 and FY2022, respectively.
This is compared to the trust' s mean of 1.09 times and respective yields of 5.4 per cent and 5.6 per cent for the estimated periods, as well as retail peers' 1.13 times mean and yields of 4.8 per cent and 5 per cent.
The analyst is also expecting CICT' s Q4 FY2021 financials to mirror that of the previous year in terms of retail traffic and sales, in view of school vacations, the holiday season, and largely-closed international borders along with a rising vaccination rate.
" While Covid infections have been rising since the easing of measures in Aug 2021 and the next few weeks will be crucial, we think that a plateauing of cases and rise in vaccination may bring back confidence in shoppers and workers returning to malls and offices, respectively," he said.
Mr Lee also expects CICT to explore further acquisitions more actively going forward, given how its operations have stabilised and its sponsor aims to expand its funds under management.
The Reit' s three-year assets under management (AUM) compound annual growth rate (CAGR) is estimated to come in at 2.1 per cent, with its last acquisition being in 3Q FY2019.
FY2020 DPU accretion has factored in three potential acquisitions at a 10 per cent valuation premium and 50-50 debt-to-equity funding within the sponsor' s pipeline.
According to the analyst, a potential sale of non-core assets such as One George Street and JCube mall will improve the trust' s gearing and net asset value.
" Medium-term growth engines could come from its sponsor' s sizeable (property) pipeline of S$5 billion and redevelopment and aged assets, while we think CICT is likelier to explore minor asset enhancement initiatives in the short term in light of occupancy preservation," he added.
Units of CICT closed flat on Monday at S$2.
Goodbye to its laopei soon.
CICT appoints two new independent directors including Singtel' s Jeann Low
The manager of CapitaLand Integrated Commercial Trust (CICT) on Monday announced it was appointing two non-executive independent directors (IDs) with immediate effect.One of them is Jeann Low, who recently retired as Singapore Telecommunications' (Singtel) group chief corporate officer in April 2021 before taking on a senior advisory role at the telco. She holds 9,416 units in CICT.
Ms Low was formerly group chief financial officer of Singtel from September 2008 to April 2015 before she was appointed as the group' s chief corporate officer.
Her credentials include a Bachelor of Accountancy (Hons) from the National University of Singapore. She is also a fellow member of the Institute of Singapore Chartered Accountants.
The other newly appointed ID of CICT' s manager is SQL View founder Stephen Lim, who is the document management company' s chief executive officer and managing director.
Mr Lim has no shareholdings in CICT and its subsidiaries. He obtained his Bachelor of Science in Electrical and Electronics Engineering from the University of Birmingham, and also holds a Master in Business Administration and Management from Imperial College London.
In its filing prior to the market open, CICT' s manager said it was confident that Ms Low and Mr Lim " will be able to contribute to the deliberations of (its board)" .
This is considering Ms Low' s experience in accounting and finance, mergers and acquisitions, and leadership and governance as well as Mr Lim' s experience and credentials in technology, management, and leadership, it said.
Both Ms Low and Mr Lim have had no prior experience in being a director of an issuer listed on the Singapore Exchange, and will be training on the roles and responsibilities of their new directorship roles.
Units of CICT closed S$0.03 or 1.4 per cent lower at S$2.14 on Friday.
Former Mapletree Logistic Trust CFO Wong Mei Lian appointed CFO of CICT
The manager of Capitaland Integrated Commercial Trust (CICT) has announced the appointment of Wong Mei Lin as CFO, taking over from Chew Sze Yung.According to the manager' s filing to the Singapore Exchange (SGX), Chew will be stepping down to focus on family priorities. She will be relinquishing her role on August 26.
Wong has been appointed as CFO designate effective August 6 and will take over the role on August 26.
Wong is currently senior vice president, capital partnership and development at CICT' s manager, a role she has held since July 2019. Prior to this, she was group financial controller and head, corporate treasury & finance at Ascendas-Singbridge between October 2017 to June 2019, and before that she was CFO of the manager for Mapletree Logistics Trust from April 2010 to November 2016.
Units in CICT closed 1 cent or 0.47% higher at $2.14 on August 5.
TP $2.56 by CIMB. Loaded while price is still low. Dyodd. ☺ ️