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441-460 of 758
Price /book value only less than 0.7 now while other retail/commercial reit are trading above 1.
Dyodd
Dyodd
Suntec Reit to divest office strata units, acquire London building
SUNTEC Reit is divesting a portfolio of strata units at Suntec City Office for S$197 million and acquiring a Grade-A office building in London for £ 353 million (S$667.2 million), the Reit manager ARA Trust Management (Suntec) said on Tuesday.
The Suntec City Office units are being divested at an 8.9 per cent premium over the independent valuation of S$180.9 million for the 78,491 square feet of space, with a net gain on divestment of S$13.9 million. The net property income yield was 3.1 per cent.
The London property is the Minster Building, an 11-storey Grade A office development with ancillary retail built in 1990 and refurbished in 2018. It has an income yield of 4.5 per cent and long weighted average lease expiry of 12.3 years.
Overall, the building has a committed occupancy of 96.7 per cent, with the ancillary retail fully leased. The office component is 96.2 per cent leased to " quality office tenants from diversified sectors" , and the weighted average lease expiry is 11.3 years.
The property has a two-year income guarantee for vacant spaces and retail leases, and an approximately one-year income guarantee for the co-working lease.
Chong Kee Hiong, chief executive officer of the Reit manager, said the Minster Building is a strategic fit with Suntec Reit' s existing portfolio, and will enhance its resilience, diversification and income stability.
He added that the divestment of the Suntec City Office strata units, the recent sale of 9 Penang Road and the acquisition of the Minster Building are part of active portfolio management to enhance unitholders' value.
" The proceeds from divestments and the recent perpetual securities issuance have improved our financial flexibility and enabled us to pursue growth opportunities for high quality and accretive assets in good locations," he said.
Following the divestments and acquisition, Suntec Reit' s assets under management will grow from S$11.5 billion to S$11.7 billion across 10 properties in Singapore, Australia and the United Kingdom.
The office sector will continue to contribute more than 85 per cent to the Reit' s total income contribution, and the office portfolio weighted average lease expiry will be lengthened to 5.55 years. The retail portfolio weighted average lease expiry will be extended to 3.18 years.
reasonable good move.
sell 99 years lease property buy 999 years lease property.
increased nta, dpu. but debt also increased.
hopefully any asset revaluation upwards can bring debt percentage down.
diversify country risk, currency risk.
longer wale. (people used to say this is good to kep dc reit, but seems like no effect on other reits that has done it later, so maybe this factor is air only)
sell 99 years lease property buy 999 years lease property.
increased nta, dpu. but debt also increased.
hopefully any asset revaluation upwards can bring debt percentage down.
diversify country risk, currency risk.
longer wale. (people used to say this is good to kep dc reit, but seems like no effect on other reits that has done it later, so maybe this factor is air only)
Suntec Reit to divest office strata units, acquire London building
Suntec Reit is divesting a portfolio of strata units at Suntec City Office for S$197 million and acquiring a Grade-A office building in London for £ 353 million (S$667.2 million), the Reit manager ARA Trust Management (Suntec) said on Tuesday.The Suntec City Office units are being divested at an 8.9 per cent premium over the independent valuation of S$180.9 million for the 78,491 square feet of space, with a net gain on divestment of S$13.9 million. The net property income yield was 3.1 per cent.
The London property is the Minster Building, an 11-storey Grade A office development with ancillary retail built in 1990 and refurbished in 2018. It has an income yield of 4.5 per cent and long weighted average lease expiry of 12.3 years.
Overall, the building has a committed occupancy of 96.7 per cent, with the ancillary retail fully leased. The office component is 96.2 per cent leased to " quality office tenants from diversified sectors" , and the weighted average lease expiry is 11.3 years.
The property has a two-year income guarantee for vacant spaces and retail leases, and an approximately one-year income guarantee for the co-working lease.
Chong Kee Hiong, chief executive officer of the Reit manager, said the Minster Building is a strategic fit with Suntec Reit' s existing portfolio, and will enhance its resilience, diversification and income stability.
He added that the divestment of the Suntec City Office strata units, the recent sale of 9 Penang Road and the acquisition of the Minster Building are part of active portfolio management to enhance unitholders' value.
" The proceeds from divestments and the recent perpetual securities issuance have improved our financial flexibility and enabled us to pursue growth opportunities for high quality and accretive assets in good locations," he said.
Following the divestments and acquisition, Suntec Reit' s assets under management will grow from S$11.5 billion to S$11.7 billion across 10 properties in Singapore, Australia and the United Kingdom.
The office sector will continue to contribute more than 85 per cent to the Reit' s total income contribution, and the office portfolio weighted average lease expiry will be lengthened to 5.55 years. The retail portfolio weighted average lease expiry will be extended to 3.18 years.
Very Short term, this will pop above 1.5 region in my humble opinion.. smile
suntec' s next Q results in july...expecting div announcement too.
Brokers' take: Analysts positive on Suntec Reit' s sale of Penang Road asset
Analysts are positive on Suntec Real Estate Investment Trust' s (Suntec Reit) recently announced divestment of its 30 per cent stake in 9 Penang Road to its joint venture partner, Haiyi Holdings.In reports issued on Thursday, RHB and Jefferies maintained " buy" on the Reit, while Citi Research reiterated its " neutral" call. All three brokerages have left their target prices unchanged at S$1.72, S$1.75 and S$1.56 respectively.
Citi analyst Brandon Lee noted that the divestment of 9 Penang Road came as a " partial surprise" . Suntec Reit' s move to sell its stake together with its issuance of S$150 million perpetual securities at a coupon rate of 4.25 per cent suggest that the Reit' s management " is prioritising an improved gearing level" , he said.
To recap, the agreed purchase price took into account the agreed property value of S$985 million on a 100 per cent basis. This is at a 5.7 per cent premium to the latest valuation of S$931.8 million as at May 1, 2021.
" Post the sale and assuming full proceeds of S$88.2 million are used to pare down debt, Suntec Reit' s gearing would improve 1.5 percentage points to 42.9 per cent, which we estimate could be lowered further to 41.5 per cent assuming 100 per cent of the recent perp is used to reduce debt as well," he commented.
Meanwhile, Jefferies' Krishna Guha likes Suntec Reit' s focus on enhancing unitholder value through active capital recycling and its efforts to strengthen its balance sheet.
" While not exactly comparable, (9 Penang Road' s) divestment price of S$2,468 per square foot is lower than the S$3,000-plus price achieved in the OUE Bayfront transaction earlier this year and other central business district strata sales," said Mr Guha of the Reit' s divestment.
He highlights that although the transaction has no impact on Suntec Reit' s distribution per unit on a pro-forma basis, the asset contributed 2 per cent of overall portfolio income in Q1 and an estimated 6 per cent on a stabilised basis.
RHB analyst Vijay Natarajan also expects the market to react favourably to the news as the divestment move " addresses the key issue of its high gearing level by unlocking value from a stabilised asset" .
He believes recently tightened measures will have " minimal impact" on the Reit' s office portfolio, and anticipates demand for leases to recover and grow in the second half of 2021.
" While the retail and convention segments are expected to remain weak, Suntec City mall' s strong attributes and management' s proactive tenant engagement should mitigate some of the impact," he opined.
Suntec Reit sells 30% stake in new 9 Penang Road building
SUNTEC Real Estate Investment Trust (Suntec Reit) has sold its 30 per cent interest in 9 Penang Road, formerly known as Park Mall, to Haiyi Holdings.
The buyer will pay about S$89.9 million for the 15 million ordinary shares and 678 redeemable preference shares that Suntec Reit held in the joint venture (JV) company, which indirectly owns the property.
Net proceeds are expected to be around S$88.2 million, Suntec Reit' s manager said in a filing on Wednesday evening. These will provide the financial flexibility to pare down bank borrowings to improve the Reit' s average leverage ratio, or they may be redeployed to acquire accretive, higher-yield assets, it said.
Haiyi Holdings, which redeveloped the site together with Suntec Reit and SingHaiyi Group, already held a 35 per cent stake in the JV before buying out Suntec Reit' s interest.
Completed in 2019, the new 10-storey Grade-A commercial building comprises two office towers and ancillary retail the net lettable area is about 399,000 sq ft.
Swiss bank UBS Group has fully leased both office towers, and the development' s committed occupancy was 98.7 per cent as at the end of March. The 99-year leasehold term started in 2016.
The purchase price of S$89.9 million was based on 30 per cent of the adjusted net asset value of the JV group. That took into account the agreed property value of S$985 million, on a 100 per cent basis, which is at a 5.7 per cent premium to the latest valuation of S$931.8 million as at May 1.
It is also 30.3 per cent higher than the total development cost of S$756 million, including land and construction costs.
The net property yield is estimated at 3.3 per cent per year over the agreed property value, based on the building' s stabilised net property income, Suntec Reit' s manager said.
It added that the agreed property value on a 30 per cent basis, which is S$295.5 million, works out to S$2,468 per square foot (psf) based on the net lettable area.
Chong Kee Hiong, chief executive officer of the Reit' s manager, noted that the gain on divestment would be S$66.5 million. The return on its investment is about 305 per cent, if calculating net divestment profit as a percentage of cost of investment.
He said the divestment is part of Suntec Reit' s " proactive portfolio management strategy to enhance unitholders' value" . After the divestment, the Reit " continues to be anchored by the resilient office segment" , which will contribute more than 80 per cent of its total income contribution, he said. Singapore properties will constitute some 75 per cent of total assets under management.
Suntec Reit' s S$150m perps priced at 4.25%
THE trustee of Suntec Reit (real estate investment trust) has priced S$150 million of subordinated perpetual securities at 4.25 per cent per annum, for five years from June 15, the Reit manager announced in a Monday night bourse filing.
After the first reset date of June 15, 2026, the new rate will be equivalent to the Swap Offer Rate, its successor rate, or if there is no successor rate, an alternative reference rate, with respect to the reset date plus the initial spread of 3.29 per cent.
The net proceeds from the issue will be used by Suntec Reit for refinancing its existing borrowings, financing or refinancing its acquisitions or investments and financing any asset enhancement works.
The perpetuals will be issued under the Reit' s US$2 billion Euro Medium Term Securities Programme. Distributions under the perpetuals shall be payable semi-annually in arrear on June 15 and Dec 15 in each year, commencing on Dec 15, 2021.
HSBC' s Singapore branch and United Overseas Bank have been appointed as the joint lead managers for the perp issue.
THE trustee of Suntec Reit (real estate investment trust) has priced S$150 million of subordinated perpetual securities at 4.25 per cent per annum, for five years from June 15, the Reit manager announced in a Monday night bourse filing.
After the first reset date of June 15, 2026, the new rate will be equivalent to the Swap Offer Rate, its successor rate, or if there is no successor rate, an alternative reference rate, with respect to the reset date plus the initial spread of 3.29 per cent.
The net proceeds from the issue will be used by Suntec Reit for refinancing its existing borrowings, financing or refinancing its acquisitions or investments and financing any asset enhancement works.
The perpetuals will be issued under the Reit' s US$2 billion Euro Medium Term Securities Programme. Distributions under the perpetuals shall be payable semi-annually in arrear on June 15 and Dec 15 in each year, commencing on Dec 15, 2021.
HSBC' s Singapore branch and United Overseas Bank have been appointed as the joint lead managers for the perp issue.
Sold at 146.....thanks to MSCI..look out for next deletions in the next MSCI adjustments
at the end of the year...Huat la!
at the end of the year...Huat la!
Contratrader ( Date: 27-May-2021 19:21) Posted:
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tomorrow, suntec is excluded from msci global index. move to small cap.
good friends quite kilat. 246+m shares transacted with only lost of 4c 142.
good one to take a sit, eat peanut see how they distribute later.
or is it already distributed earlier? which will explain why the price cannot run in the last few months.
good friends quite kilat. 246+m shares transacted with only lost of 4c 142.
good one to take a sit, eat peanut see how they distribute later.
or is it already distributed earlier? which will explain why the price cannot run in the last few months.
Yep. . .
royeko ( Date: 27-May-2021 18:33) Posted:
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I bought too. . . . Good luck bro. . . Huat ah.
Contratrader ( Date: 27-May-2021 19:21) Posted:
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Yes bought a bit at 142 to try...
superstartup ( Date: 27-May-2021 17:30) Posted:
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Hello Folks,
So is the " Suntec Reit to be deleted as of the close of May 27, 2021" effect considered all priced in already?
You bought bro?
Contratrader ( Date: 27-May-2021 17:15) Posted:
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Too bad today the durians not much meat..... only matched at 142.
Contratrader ( Date: 12-May-2021 13:20) Posted:
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Hahhaa ya lor. Maybe if drop below my average, i will loot more.
If you had sold two weeks ago, this should be a nice price to enter
If you sell now, I don' t know if it will drop further
It seems quite undervalued now though, 0.673 price to book ratio
My average is 1.34 lol
If you sell now, I don' t know if it will drop further
It seems quite undervalued now though, 0.673 price to book ratio
My average is 1.34 lol
Starry123 ( Date: 17-May-2021 14:35) Posted:
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