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I will be posting this in all REITs stock in which I have some interests. But please hor, due diligence please, do not take this as the final and only positive statement and cheong to take up positions.....if you are lazy to read through the entire article, just focus on the highlighted parts....
Why is the Singapore REIT market going so strong after two years of COVID-19?
SINGAPORE: Singapore real estate investment trusts or S-REITs have emerged as a resilient segment of the local stock exchange in the past two years.
Traditionally a key pillar of the portfolios of individual investors in Singapore, the iEdge S-REIT Index, regarded as the S-REIT benchmark, reported a total return of 5.2 per cent since the start of 2020 to Nov 17.
This was despite S-REITs raising new equity from unitholders, creating additional units and leading to potential dilution risk. In the past 23 months, S-REITs raised a total of S$8 billion through placements and rights issues led by mega-issuances from Ascendas Real Estate Investment Trust and Frasers Commercial Trust.
Most S-REITs largely maintained their dividends, compensating for the fall in unit prices in this period.
Global financial markets including S-REITs initially crashed when COVID-19 became a pandemic, with investors panicking and selling liquid financial assets. For investors daring and savvy enough to put money to work during the trough in end-March 2020, total returns from capital gains have been a whopping 57 per cent.
Despite headlines on troubles in the retail space and how work-from-home has made offices redundant, occupancies measured by leases have remained high for S-REITs holding shopping malls and offices in Singapore, with little problems in rental collection, even if fewer are using these spaces.
In the hardest hit hotel sector, the fall in physical property asset value was contained to less than 10 per cent at a portfolio level among the S-REITs tracked by OCBC, a good outcome despite the pandemic curbing travel.
Hospitality REITs will likely need time to recover and could do better in a 24-month timeframe as borders reopen further.
S-REITs today generate a significant volume of trading activity for the stock exchange - about one-fourth of the daily turnover before COVID-19. Primary equity markets in Singapore also skew towards S-REITs.
S-REITs, at S$110 billion, represents 12 per cent of Singapore&rsquo s whole equity market by market cap &ndash a figure that is 6 per cent for Australia and only 2 per cent for Japan, the other two top REIT markets in the Asia-Pacific with large domestic economies.
WHY S-REITS STILL ATTRACT SO MANY INVESTORS
The top-performing Singapore stock in the past 23 months goes to iFAST Corporation, an investment products distribution platform, which generated total returns of 771 per cent during this time, superseding the Bloomberg Bitcoin Galaxy Index at 750 per cent.
This is lower than the 1,131 per cent on the Bloomberg Galaxy Crypto Index tracking cryptocurrencies.
Still, S-REITs and the Singapore commercial property market continue to attract significant investor attention.
Investors in Singapore are very familiar with the nuts and bolts of running a property, and understand how policies like stamp duties, urban planning, zoning, tenancy and ownership rules influence whether and when investors should buy an investment property and what to look out for in assessing a property&rsquo s attractiveness.
Many like the idea of owning a passive, stable and recurring income stream. S-REITs generate fairly stable revenue, with the iEdge S-REIT Index reporting revenue per unit of S$132.5 in 2019.
Though it dropped 6.3 per cent in 2020, analysts expect a rebound to S$135.6 this year.
S-REITs are a good source of income. Qualifying S-REITs are encouraged to pay gains to unitholders instead of hoarding profits as they not taxed on dividends distributed to unitholders.
The key challenge is share dilution when S-REITs need to raise to acquire new properties.
Past transactions that have stirred market discussions include K-REIT Asia&rsquo s (now known as Keppel REIT) 87.5 per cent interest in Ocean Financial Centre in 2011, Ascott Residence Trust&rsquo s acquisition of Ascott Orchard Singapore, Citadines City Centre Frankfurt and Citadines Michel Hamburg in 2017 and Lippo Malls Indonesia Retail Trust&rsquo s acquisition of Puri Mall in 2021.
S-REITs are also regulated as a collective investment scheme under the Securities and Futures Act, where there is a 50 per cent cap on the leverage limit for S-REITs to keep credit risks in check. As listed entities, S-REITs also follow SGX rules on the disclosure of information and the right for minority investors to vote on major matters.
S-REITS MORE ACCESSIBLE THAN EVER
Until S-REITs were launched in July 2002, the commercial property market was inaccessible to most individual retail investors, with ticket sizes of each standalone commercial property in the millions and billions of dollars.
Today, all it takes is S$230 at last Wednesday&rsquo s prices for an individual investor to buy into CapitaLand Integrated Commercial Trust (&ldquo CICT&rdquo ), Singapore&rsquo s largest REIT, and enjoy a portion of CICT&rsquo s rental income from shopping malls and offices.
Few investment opportunities provide such stability for 4 to 7 per cent dividend yield per year. It&rsquo s little wonder such investment classes with a dividend income and the potential for capital gains appeal to investors with a neutral risk profile at Singapore&rsquo s median age of 42.
Singapore has maintained an encouraging ecosystem for the development of S-REITs. Regulatory uncertainty is minimised as regulators routinely seek industry feedback from REIT managers, investors and lawyers before introducing new rules.
The market has grown to include fund managers who invest in S-REITs as their specialty, REIT exchange traded funds and REIT derivatives.
Bank lenders and bond investors in Singapore are highly familiar with S-REITs, together providing a pool of liquidity that allows the S-REIT market to grow bigger. Brokerages are also prepared to lend individual investors buying larger amounts of REIT units.
WILL GAINS IN S-REITS CONTINUE?
The bigger question is whether we will continue to see capital gains in the coming 12 to 24 months as interest rates rise.
In a world where stock market prices are affected by sentiments, Reddit fads and breaking news, S-REITs continue to see strong investor demand because their valuation is backed by commercial properties where asset value has seen a continued upward trend.
Indeed, S-REIT indices are not a good representation of the underlying economy. They are weighted towards larger S-REITs, rather than each S-REIT&rsquo s contribution to the Singapore economy.
The iEdge S-REIT&rsquo s top five components make up 43.3 per cent of the index which have an outsized influence on total returns.
Three are large-cap industrial REITs with industrial properties in Singapore and countries across Asia-Pacific, Europe and the United States &ndash in a world where logistics, data centres, business parks and manufacturing facilities have been resilient through the pandemic.
The remaining two are large-cap commercial REITs owning quality assets with tenants largely staying put despite the economic downturn, with occupancies remaining above 90 per cent.
Beyond the broad index, S-REITs that hold hotels and shopping malls located in the city centre have been dragged by the pandemic. With the city centre hollowed out as we work from home and international travelers non-existent, these S-REITs have underperformed Industrial REITs.
Furthermore, the S-REIT industry has been kept buoyant by an inflow of capital. The broad money supply in Singapore has surged by 10.9 per cent year-on-year as of September. With interest rates on cash near-zero, all that money needs to go somewhere.
The S-REITs market is unlikely to cool anytime soon. There is momentum. Thirteen out of the 80 IPOs with primary share offering in Singapore since 2016 were S-REITs raising S$5.6 billion collectively at an average offer size of S$430 million.
Outside of S-REITs, a further S$2.7 billion was raised for two listings, Kakao Corp, the Internet company global depository receipt listing and NetLink NBN Trust, a business trust which holds infrastructure assets.
The remaining 65 had an average offer size of S$28 million &ndash small cap listings with limited liquidity.
Tellingly, the two upcoming IPOs in Singapore - Daiwa House Logistics Trust and Digital Core REIT - are both S-REITs.
The equity analyst community is still optimistic and forecasting a rise in S-REIT dividends in the next 12 to 24 months.
Driven by the growth and resiliency of industrial assets, particularly logistics warehouse and data centres, the Big Three industrial REITs of Ascendas Real Estate Investment Trust, Mapletree Logistics Trust and Mapletree Industrial Trust also recorded average total returns of 15.6 per cent in the past 23 months.
DON&rsquo T DISMISS SGX
Looking ahead, Singapore investors should not be so quick to dismiss the SGX, given the current slew of corporate restructuring exercises with the potential for capital gains, which may not be immediately apparent to new individual investors in the market.
Buying S-REITs is likely to remain a cornerstone investment strategy for many individual investors. The more pertinent decision points remain how much S-REITs should feature as a percentage of one&rsquo s investment portfolio and which specific ones to invest in.
Still, until a next financial crisis with significant liquidity stress, we are unlikely to repeat the kind of capital gains seen from March 2020 to date in S-REITs.
A lot of the negatives has since been priced in, with the broad iEdge S-REIT Index trading at 1.1 times the price-to-book value, indicating that the market cap of the S-REITs as a broad basket is now higher than the value of the underlying properties.
Seriously why would you want to buy Parkway and get 0.0356 dpu when you can pay half the share price for this Mother of Commercial REITs and get 0.0439 dpu?
Mapletree Commercial Trust ' placed for recovery' , stronger 2HFY22 anticipated: Maybank Kim Eng
Maybank Kim Eng&rsquo s Chua Su Tye remains sanguine on Mapletree Commercial Trust (MCT)following its 1HFY2022 ended September results announcement on Oct 27.
Chua has kept his &ldquo buy&rdquo rating for the counter with an unchanged target price of $2.35. &ldquo The results were in line to consensus&rsquo and our estimates, and with 1H22 revenue/NPI/DPU at 47% of our FY2022, we have kept our forecasts unchanged,&rdquo he remarks in a Oct 28 research note.
The way Chua sees it, MCT will have a stronger 2HFY2022, underpinned by rising office demand, and improvement in VivoCity&rsquo s operating metrics alongside a gradual reopening.
He notes that despite a slower q-o-q performance, MCT reported stronger y-o-y performance in 1HFY2022, with revenue and NPI up 11.5% and 10.7% respectively, driven by lower rental rebates and the compensation received from a lease pre-termination at mTower.
Portfolio occupancy climbed to 93.3%, up from 92.6% in 1QFY2022 with improvements across all its assets, except Mapletree Anson.
Meanwhile, revenue and NPI at VivoCity fell 20.5% and 22.7% on a half-year basis, but was up 2.6% and 4.0% respectively on a q-o-q basis on the back of higher occupancy, which improved from 97.7% to 98.6%, and with committed occupancy higher at 99.6%.
Chua has a flattish outlook for rent reversions at Vivocity following the 3.5% recorded for the 1HFY022, with upside risk from further easing restrictions.
MCT&rsquo s assets under management were up 0.5% at $8.8 billion, while gearing remains low at 33.7%. Chua notes that MCT&rsquo s growth profile is stronger from its MBC assets, which now contribute some 43% of AUM, ahead of retail assets at around 36%.
" While a $1.8b billion debt headroom (at 45% limit) offers deal options, and management is eyeing AUM growth, visibility is low given tight office cap rates and a limited sponsor Singapore pipeline,&rdquo he comments.
Chua highlights that valuations are undemanding at 4.5% dividend yield, with better DPU visibility from its MBC assets, and added traction from VivoCity&rsquo s recovery into the coming quarters.
Wow, CIMB said MCT not out of the woods yet.... but still maintain TP $2.32. UOBKH more optimistic, $2.48, shout buy wor...
Reiterate Hold with a DDM-based TP of S$2.32
We cut our FY22F DPU by 4.3% as we impute two months of rental rebates. We expect MCT to release c.S$16m of remaining retained cash from 4QFY20 in 2HFY22. We like its quality assets but find it priced in at 4.5% yield. Upside/downside risks: accretive acquisition/weaker rental reversion and more provision of rental rebates.
Reiterate Hold with a DDM-based TP of S$2.32
We cut our FY22F DPU by 4.3% as we impute two months of rental rebates. We expect MCT to release c.S$16m of remaining retained cash from 4QFY20 in 2HFY22. We like its quality assets but find it priced in at 4.5% yield. Upside/downside risks: accretive acquisition/weaker rental reversion and more provision of rental rebates.
Correction, my mistake: should be " this $0.0439 is its FY 21/22 2Q payout."
NOT FY20/21 2Q....
NOT FY20/21 2Q....
Lobster ( Date: 28-Oct-2021 12:03) Posted:
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That' s right.. for MCT, 1st half DPU normally lower than 2nd half DPU.
Lobster ( Date: 28-Oct-2021 11:55) Posted:
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Just to clear on this. mighty MCT FY ends in March. So this $0.0439 is its FY 20/21 2Q payout.
$0.0532 is FY 20/21 4Q payout. Two different apples.
$0.0532 is FY 20/21 4Q payout. Two different apples.
Lobster ( Date: 28-Oct-2021 11:55) Posted:
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Normally 2Q dpu is lower. You must compare yoy. Last FY 2Q (20/21) was$0.0417.
Total FY20/21 was $0.0949 which was an improvement over FY19/20' s $0.0738.
Don' t forget these are pandemic years earnings.
Total FY20/21 was $0.0949 which was an improvement over FY19/20' s $0.0738.
Don' t forget these are pandemic years earnings.
pkli899 ( Date: 28-Oct-2021 11:45) Posted:
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If compare to previous half year, DPU dropped a lot.
From 5.32 to 4.39, almost 1 cent.
I' m quite concern about it.
From 5.32 to 4.39, almost 1 cent.
I' m quite concern about it.
It is ridiculous that no one post such news on this Mother of all Mapletree REITs!
Mapletree Commercial Trust grows its revenue and property income on lower rental rebates, lease termination compensation
MAPLETREE Commercial Trust Mapletree Com Tr: N2IU 0% ' s gross revenue for the half-year of FY 2022 to September rose by 11.5 per cent, while its net property income improved 10.7 per cent, mainly due to lower rental rebates as well as compensation received from a pre-terminated lease.
The results filed by the trust' s manager, Mapletree Commercial Trust Management, to the Singapore Exchange on Oct 27 indicated that distribution per unit (DPU) was up 5.3 per cent to 4.39 Singapore cents from 4.17 cents. Payment is scheduled for Nov 30.
Mapletree Commercial Trust' s gross revenue stood at S$243.7 million for the half-year, up from S$218.7 million a year earlier. And net property income came in higher at S$189.9 million, up from S$171.5 million for the corresponding period of FY 2021, as all properties recorded a higher year-on-year contribution.
Its distributable income grew 18.7 per cent year on year to S$146.5 million from S$123.4 million.
Mapletree Commercial Trust Management noted that the trust had achieved portfolio rental reversion of 2.3 per cent for H1 FY2022, with committed occupancy at 96 per cent as at end September.
Mapletree Commercial Trust reported that its total investment value inched up to over S$8.7 billion, marginally higher by 0.5 per cent than that at Mar 31, resulting in a flat net asset value per unit of S$1.72.
Mapletree Commercial Trust has its properties all in Singapore, four in HarbourFront and Alexandra, including the shopping mall VivoCity, and one in the central business district.
It added that its aggregate leverage was 33.7 per cent, with the average term to maturity of debt being 3.8 years, weighted average all-in cost of debt at 2.42 per cent per annum and the interest coverage ratio approximately 4.8 times on a 12-month trailing basis, as at end-September.
It said that it has 72.6 per cent of total debt of about S$3 billion on fixed rates, while no more than 24 per cent of debt is due in any financial year.
Aiyo, this acquisition is by Mapletree Investment, not MCT.
And is logistics assets. Nothing to do with MCT la.
And is logistics assets. Nothing to do with MCT la.
Mapletree acquires two portfolios of 141 logistics assets for US$3b
MAPLETREE Investments has acquired two portfolios of logistics assets in the United States, comprising 141 income-producing assets for a total investment value of approximately US$3 billion.
The latest acquisition will give it scale and investor interest to create a fourth US-focused private fund with a fully seeded portfolio of 155 logistics assets, the company said.
The first portfolio, acquired in July 2021, comprises 24 assets totalling 6.1 million square feet (sq ft) of net lettable area (NLA) across Dallas, Memphis, Greater Chicago, Central Florida and Boston.
It has an occupancy rate of 98.9 per cent and a weighted average lease to expiry (WALE) of 3.3 years, as at end of June this year.
The second portfolio was acquired in September this year. It includes 117 assets spanning 22.3 million sq ft of NLA across Greater Chicago, the Carolinas, Memphis, Houston and Washington DC/Baltimore. The portfolio is 94.1 per cent occupied and has a WALE of 4.1 years.
Nicholas Mak, head of research & consultancy at ERA, thinks that Mapletree making the acquisitions is " a good move" .
" Many of the low-lying fruits in the local market have already been plucked. The company will have to look overseas for more opportunities to expand its portfolio, while still generating stable income at an acceptable risk level," he said.
The pair of portfolios' tenant base includes companies in third-party logistics, consumer goods, wholesale and e-commerce sectors, among others.
With the acquisitions, Mapletree will have a total of about S$25.5 billion worth of assets under management in the logistics sector, with an estimated NLA of 224 million sq ft across Asia-Pacific, Europe, and the US.
The real estate and investment company will also hold about US$14.8 billion of real estate across the US.
Michael Smith, regional chief executive officer of Europe and the USA at Mapletree, said: " The US logistics sector is among the best performing and most resilient of all the real estate markets in which Mapletree operates globally. By combining these recently acquired assets with 14 logistics facilities that we currently own, we have attained sufficient scale and investor interest to create a fourth US-focused private fund with a fully seeded portfolio of 155 logistics assets."
In August, Mapletree had separately told BT it will evaluate various options to monetise its portfolio of student accommodation assets over the next few months. These options include a public Reit or private fund, it said.
That came after it acquired four purpose-built student accommodation (PBSA) assets in the United Kingdom from Vita Group for over £ 165 million (about S$306 million), further expanding its student housing footprint in the UK.
This month, it also closed its maiden US office fund, Mapletree US Income Commercial Trust (MUSIC), with US$552 million in total fund equity raised. MUSIC is Mapletree' s twelfth private equity fund and the fifth in a series of fully-seeded funds encompassing Europe and Australia commercial, Europe and US logistics, as well as student accommodation in the UK and US.
The current share price levels for the Singapore REIT (S-REIT) sector presents an &ldquo opportunity&rdquo for investors to re-enter, say DBS Group Research analysts Derek Tan, Rachel Tan, Dale Lai and Geraldine Wong on Aug 30.
On the back of the US Federal Reserve chairman Jeremy Powell&rsquo s broad messaging that the US central bank will &ldquo stay the course&rdquo as opposed to being early in its expected taper programme in the 2HFY2021.
On this, the team sees a &ldquo more patient&rdquo FED to be conducive for S-REITs to re-rate, with a rate hike some time away.
&ldquo Taking the cue from the last rate hike normalisation in 2HFY2013-2018, a 1.5 years difference between &ldquo taper signal&rdquo to the first rate hike will imply the first hike will likely be in 2023,&rdquo they write.
As such, the analysts say they &ldquo see sufficient buffer and S-REITs to find its ground post pandemic before addressing interest rate risks and thus recommend investors to take the recent share price weakness to add&rdquo .
To the team, FY2021 and FY2022 yields for S-REITs are attractive at 5.5% and 6.0% respectively. The figures imply that yield spreads against the SG 10-year bond are close to -1 standard deviation (s.d.) at 4.0% to 4.5%.
Furthermore, the potential inclusion of some S-REITs in the FTSE EPRA Nareit Developed Asia Index has brought about more visibility for the sector. This is due to the wider representation of Singapore in major property indices, note the analysts.
As it is, selected mid-cap S-REITs have already attracted incremental inflows due to their possible inclusion into the index.
From now, the analysts say they expect the overall sector to &ldquo build its base from now on&rdquo .
&ldquo We remain optimistic that the S-REITs can continue to ride on the gradual re-opening of the Singapore economy and maintain our view that the robust earnings growth projections in 2HFY2021-2022 to drive a re-rating for the S-REITs,&rdquo they write.
&ldquo We prefer selected retail and office S-REITs (Mapletree Commercial Trust, Suntec REIT, Frasers Centrepoint Trust, Lendlease Global Commercial REIT) and industrial S-REITs for its robust growth trajectories (Mapletree Logistics Trust, Mapletree Industrial Trust, Frasers Logistics & Commercial Trust, ARA LOGOS Logistics Trust and ESR-REIT). Amongst hotels, we prefer global diversified names like CDL Hospitality Trusts.
10 S-Reits yielding long-term annualised returns based on 10 YEAR Annualised Total Returns (%)
Mapletree Industrial Trust 10 Yrs ATR = 16.7 %
Mapletree Logistics Trust 10 Yrs ATR = 16 %
Mapletree Commercial Trust. 10 Yrs ATR = 15.8%
ParkwayLife Reit 10 Yrs ATR = 15%
Aims Apac Reit 10 Yrs ATR = 12.9%
Ascendas India Trust 10 Yrs ATR = 11.8%
Frasers Centrepoint Trust. 10 Yrs ATR = 10.8%
Ascendas Reit. 10 Yrs ATR = 10.4%
Ara Logos Logistics Trust 10 Yrs ATR = 8.0%
ESR-Reit. 10 Yrs ATR = 7.9%
Mapletree Industrial Trust 10 Yrs ATR = 16.7 %
Mapletree Logistics Trust 10 Yrs ATR = 16 %
Mapletree Commercial Trust. 10 Yrs ATR = 15.8%
ParkwayLife Reit 10 Yrs ATR = 15%
Aims Apac Reit 10 Yrs ATR = 12.9%
Ascendas India Trust 10 Yrs ATR = 11.8%
Frasers Centrepoint Trust. 10 Yrs ATR = 10.8%
Ascendas Reit. 10 Yrs ATR = 10.4%
Ara Logos Logistics Trust 10 Yrs ATR = 8.0%
ESR-Reit. 10 Yrs ATR = 7.9%
I am surprised nobody posted these
10 S-Reits yielding long-term annualised returns
THE 10 best performing S-Reits and property trusts with over a 10-year listing history have averaged 12.5 per cent in 10-year annualised total returns. On an absolute basis across the 10-year period, these 10 trusts have generated total returns averaging 240 per cent as Reits continue to be an asset class of choice for the longer horizon.
Comparatively, the 10 have also outperformed major Asia-Pacific Reit markets which have yielded 10.3 per cent in average total returns for the same period.
Of the 10, the top five trusts Mapletree Industrial Trust Mapletree Ind Tr: ME8U -0.68% , Mapletree Logistics Trust Mapletree Log Tr: M44U -0.98% , Mapletree Commercial Trust Mapletree Com Tr: N2IU -2.4% , ParkwayLife Reit ParkwayLife Reit: C2PU -1.22% and Aims Apac Reit AIMS APAC Reit: O5RU -0.64% , were also among Asia-Pacific' s 20 best performing Reits with a longer trading history.
Three of these are S-Reits sponsored by Mapletree Investments, which owns and manages over S$66 billion of data centre, industrial, lodging, logistics, mixed-use, multifamily, office, residential and retail properties.
Mapletree Industrial Trust (MINT) listed in October 2010 with an initial investment portfolio of 70 Singapore industrial properties valued at S$2.1 billion including business parks, flatted factories, stack-up/ramp-up buildings and light industrial buildings.
Today, the trust has tripled in portfolio with assets under management of S$6.7 billion across 114 properties in Singapore and North America. In terms of asset mix, MINT has also diversified with acquisitions into high-tech buildings and data centres making up 20.9 per cent and 39.8 per cent respectively. Its latest acquisition of 29 data centres in the United States makes it one of the largest owners of data centres among Asia-Pacific Reits.
Mapletree Logistics Trust (MLT) was one of the first Mapletree Group S-Reits to be listed in July 2005 and was the first Asia-focused logistics Reit. Its portfolio of properties has swelled from 15 properties worth S$422 million to 163 properties worth S$10.7 billion across nine countries in the Asia-Pacific.
MLT now has a diversified tenant base of 752 customers with close to 75 per cent of its portfolio serving consumer-related sectors.
Mapletree Commercial Trust (MCT) listed in April 2011 with three properties located in Singapore valued at S$2.8 billion. Its enlarged portfolio value has since trebled and comprises five Singapore properties worth S$8.7 billion.
ParkwayLife Reit (PLife) listed in August 2007 with just three properties in Singapore - Mount Elizabeth Hospital, Gleneagles Hospital and East Shore Hospital with a combined value of S$775 million. Fourteen years on, it has almost trebled its portfolio value at S$1.99 billion across 53 properties in Singapore, Japan and Malaysia and considers itself to be one of the largest listed healthcare Reits in Asia.
PLife recently completed its third strategic recycling initiative with a divestment of a non-core asset and acquired two nursing homes in Japan, increasing its geographical coverage and further diversification of age-care tenants.
Some may remember Aims Apac Reit as MacarthurCook Industrial Reit which listed in April 2007 with a portfolio of 12 industrial properties in Singapore valued at S$316 million.
The Reit has since rebranded itself in 2019 and has grown over five times in size with a portfolio value of S$1.7 billion across 28 properties in Singapore and Australia.
Its tenant base of 188 tenants has also diversified across the years, and include resilient sectors such as logistics and warehouses, bio-medical and life science, telecommunications and data centre operators accounting for seven out of its top 10 tenants. SGX RES
Mapletree Investments issues S$600m of fixed-for-life perps at 3.7%
MAPLETREE Investments' wholly-owned subsidiary Mapletree Treasury Services has launched and priced S$600 million of 3.7 per cent perpetual securities under its US$5 billion Euro medium-term note programme.
In a press statement on Wednesday, the property developer and manager said it received orders in excess of S$1 billion " with participation from about 60 high-quality investors, albeit being a new perpetual structure in the SGD market" .
Proceeds from the offering will be used by Mapletree for general corporate purposes.
This represents the SGD market' s first subordinated fixed-for-life perpetual issuance, said the group. The securities will be unconditionally and irrevocably guaranteed by Mapletree.
Issued in denominations of S$250,000, the perpetual securities are first callable at the issuer' s option on Aug 12, 2024. They have no coupon reset or step-up margin.
Distributions at a rate of 3.7 per cent per annum are payable semi-annually in arrears on a discretionary basis, and will be cumulative in accordance with the terms and conditions of the securities.
DBS, HSBC and OCBC acted as joint lead managers for the offering.
Wendy Koh, group chief financial officer of Mapletree, expects the latest issuance to strengthen the group' s balance sheet and financial flexibility.
" Despite the current, challenging climate brought about by Covid-19, we went ahead to launch this first subordinated fixed for life perpetual securities in the SGD market. We are glad that it was well received by investors from both the institutional and high-net-worth investors," she said.
" The success (of the offering) is a testament of investors' recognition of Mapletree' s brand, strong credit and proven financial track record."
Analysts mostly neutral on Mapletree Commercial Trust' s 1QFY21/22 performance
Analysts have largely kept their calls and target prices unchanged following Mapletree Commercial Trust' s (MCT) 1QFY2021/2022 ended June results, which were released late last week.UOB Kay Hian was the sole analyst with an adjustment in target price, revising it downwards to $2.48 from $2.50 previously while keeping its " buy" call.
CGS-CIMB Research and OCBC Investment Research both kept their " hold" ratings and target prices unchanged.
In a July 26 research note, UOB Kay Hian analyst Jonathan Koh highlights that MCT faces " a temporary setback" pursuant to the Phase 2 (Heightened Alert) period from July 22 to August 18.
The way he sees it, social distancing measures could be " substantially" eased by October, in tandem with the Singapore government' s 75% vaccination target.
To that end, he has assumed that MCT would provide rental rebates of another 0.6 months of fixed rents to eligible retail tenants in 2QFY2021/2022. His tweaked assumption results in a lower DPU forecast for the year by 6.5%, thus underpinning his lower target price.
Koh remains bullish on MCT' s longer-term prospects in view of the government' s plans to develop the Greater Southern Waterfront (GSW) and rejuvenate Sentosa Island and Pulau Brani.
Pointing out that MCT has five properties - accounting for 91.4% of its portfolio valuation - located in the HarbourFront area, which is at the heart of the GSW, he anticipates MCT to benefit as the plans get gradually rolled out.
CGS-CIMB analysts Eing Kar Mei and Lock Mun Yee remain neutral on MCT despite anticipating that it will see more stable income compared to peers amidst the weaker operating environment.
" [We] retain our target price and Hold call as the stock is now trading at c.4.5% yield, which we believe prices in its income stability," they say in a July 26 research note.
They note that MCT' s 1QFY2021/2022 net property income of $96.9 million came in line with their expectations, driven by lower rental rebates and pre-term lease compensation.
For OCBC' s research team, MCT' s 1Q performance was also in line with their expectations. The team also commended MCT' s move to support its tenants amidst the tightened Covid-19 measures. " We believe MCT has always been one of the most proactive retail REITs in supporting its retail tenants, and this was once again illustrated by the ~0.6 months of rental rebates/waivers extended to eligible tenants in 1QFY22 (~4.4 months were given in FY21)," they remark.
To that end, the team views that despite the announcement by the Ministry of Finance on July 23 that it is looking to require sharing of rental obligations between the government, landlords and qualifying tenants, MCT' s outlay will likely not increase significantly given its existing support measures.
" We lower our FY2022 DPU forecast by 0.8% to factor in more rental rebates. However, our fair value estimate remains unchanged at $2.20," the team adds.
As at 2.36pm, units in MCT are trading 1 cent or 0.47% lower at $2.11.
Hi,
May i know when the dividend and the ex-date will be disclosed?
The coming dividend will be for the period 1H2021 right? (someone told me just changed to half-yearly basis)
May i know when the dividend and the ex-date will be disclosed?
The coming dividend will be for the period 1H2021 right? (someone told me just changed to half-yearly basis)
MCT reports 22.9% increase in NPI amid higher revenue
MAPLETREE Commercial Trust (MCT) reported an improvement to gross revenue and net property income during its first quarter, mainly due to lower rental rebates compared to a year ago, and compensation received from a pre-terminated lease.
In a business update on Friday, the manager said MCT' s net property income rose to S$96.9 million for the three months ended June 30, 2021, up 22.9 per cent from S$78.9 million a year earlier.
Meanwhile, gross revenue for the trust - which invests in retail and office properties - also climbed 23.7 per cent year-on-year to S$124.1 million.
" Our performance in Q1 FY21/22 was dampened by the re-imposition of Covid-19 measures in Singapore, including a five-week cessation of dining-in at all F& B establishments," said Sharon Lim, chief executive of the manager.
Even though the impact was less severe than a year ago, MCT said it has rolled out rental assistance.
Ms Lim said: " During the quarter, we rendered rebates amounting to approximately 0.6 month of fixed rents to eligible retail tenants, and we stand ready to render additional assistance where warranted."
The manager said that all properties recorded higher year-on-year contribution to net property income, except for Mapletree Business City, which posted a slight decline.
The biggest improvement came from VivoCity, which saw net property income rise from S$16.4 million to S$29.6 million.
The manager said that recovery momentum at VivoCity was disrupted by tightened Covid-19 measures that took effect from May 16. However, it added that the impact was less significant than last year, when non-essential businesses were shut for 10 weeks.
MCT noted that when dining in was allowed to resume towards the end of June, the average daily shopper traffic at VivoCity reached about half of pre-Covid-19 levels, and rental rebates disbursed to eligible retail tenants was lower than the same period a year ago.
MCT' s office and business park assets saw net property income rise 7.7 per cent year-on-year in Q1, and the manager said it was mainly due to compensation received from a pre-terminated lease at mTower.
For the overall portfolio, net property income margin during the quarter was 78.1 per cent. As at quarter-end, the committed occupancy of the portfolio was 95.4 per cent.
Ms Lim said: " Although the country is once again retightening measures to contain the community spread of Covid-19, we can remain hopeful that recovery is nearer than before given the continued progress in vaccinating the majority of the population."
She added: " MCT will continue to manage our assets actively and position them well for the eventual recovery."
MCT reports 22.9% increase in NPI amid higher revenue
Mapletree Commercial Trust (MCT) reported an improvement to gross revenue and net property income during its first quarter, mainly due to lower rental rebates compared to a year ago, and compensation received from a pre-terminated lease.In a business update on Friday, the manager said MCT' s net property income rose to S$96.9 million for the three months ended June 30, 2021, up 22.9 per cent from S$78.9 million a year earlier.
Meanwhile, gross revenue for the trust - which invests in retail and office properties - also climbed 23.7 per cent year-on-year to S$124.1 million.
" Our performance in Q1 FY21/22 was dampened by the re-imposition of Covid-19 measures in Singapore, including a five-week cessation of dining-in at all F& B establishments," said Sharon Lim, chief executive of the manager.
Even though the impact was less severe than a year ago, MCT said it has rolled out rental assistance.
Ms Lim said: " During the quarter, we rendered rebates amounting to approximately 0.6 month of fixed rents to eligible retail tenants, and we stand ready to render additional assistance where warranted."
The manager said that all properties recorded higher year-on-year contribution to net property income, except for Mapletree Business City, which posted a slight decline.
The biggest improvement came from VivoCity, which saw net property income rise from S$16.4 million to S$29.6 million.
The manager said that recovery momentum at VivoCity was disrupted by tightened Covid-19 measures that took effect from May 16. However, it added that the impact was less significant than last year, when non-essential businesses were shut for 10 weeks.
MCT noted that when dining in was allowed to resume towards the end of June, the average daily shopper traffic at VivoCity reached about half of pre-Covid-19 levels, and rental rebates disbursed to eligible retail tenants was lower than the same period a year ago.
MCT' s office and business park assets saw net property income rise 7.7 per cent year-on-year in Q1, and the manager said it was mainly due to compensation received from a pre-terminated lease at mTower.
For the overall portfolio, net property income margin during the quarter was 78.1 per cent. As at quarter-end, the committed occupancy of the portfolio was 95.4 per cent.
Ms Lim said: " Although the country is once again retightening measures to contain the community spread of Covid-19, we can remain hopeful that recovery is nearer than before given the continued progress in vaccinating the majority of the population."
She added: " MCT will continue to manage our assets actively and position them well for the eventual recovery."
MCT units closed at S$2.14 on Friday, down S$0.01 or 0.5 per cent, before the announcement.
FCT, KReit, MCT among safer Reit options amid return to Heightened Alert: DBS
FRASERS Centrepoint Trust (FCT) Frasers Cpt Tr: J69U -0.83%, Keppel Reit (KReit) Keppel Reit: K71U +0.85% and Mapletree Commercial Trust (MCT) Mapletree Com Tr: N2IU 0% are among the preferred Singapore real estate investment trust (S-Reit) picks of DBS, as the country returns to Phase 2 (Heightened Alert) in a bid to control the spread of Covid-19.
The brokerage has also recommended several industrial Reits as " safe harbours" .
On Tuesday, Singapore' s Covid-19 taskforce reinstated a ban on dining at food and beverage outlets. These F& B players will only be allowed to offer takeaways and deliveries.
Social gatherings outside the home will also be limited to group sizes of two people. These new restrictions will last for about a month.
DBS expects the restrictions will lead to a 6 to 10 per cent cut in earnings estimates for retail Reits, which may have to grant rental rebates to their F& B tenants.
" With restaurants now possibly facing up to two months of not having dine-in customers, we fear that some restaurants may be forced to throw in the towel," the brokerage said in a report dated Wednesday.
But DBS continues to like FCT, which is exposed to the " more resilient essential tenant trades" . Most of FCT' s malls are located in the suburban parts of Singapore, and tend to be frequented by shoppers in need of groceries or other essentials.
DBS has a " buy" call on FCT and a target price of S$3, which is 25 per cent above the trust' s close on Wednesday at S$2.40.
Meanwhile, an extension of the current work-from-home arrangements could affect office leasing momentum.
But DBS is positive on the outlook for KReit and MCT as it sees them as " better positioned to attract new economy tech firms" .
It has " buy" calls on both with target prices of S$1.40 and S$2.25, respectively. Units of KReit closed Wednesday at S$1.19 while MCT closed at S$2.12.
Within the Reit space in general, DBS said industrial Reits have the " clearest growth trajectory" just now, as their tenants are least likely to be affected by Covid-related restrictions.
The brokerage sees warehouses and business parks leading the recovery, and it has " buy" calls on Mapletree Logistics Trust Mapletree Log Tr: M44U -0.48% (target price S$2.35, close on Wednesday S$2.08), Mapletree Industrial Trust Mapletree Ind Tr: ME8U +0.35% (target price S$3.25, close on Wednesday S$2.88), Ara Logos Logistics Trust ARA LOGOS Log Tr: K2LU -1.69% (target price S$0.85, close on Wednesday S$0.87) and Aims Apac Reit AIMS APAC Reit: O5RU +1.29% (target price S$1.60, close on Wednesday S$1.57).
DBS also highlighted the healthcare-focused Parkway Life Reit ParkwayLife Reit: C2PU -1.04% (PLife Reit) for its resilient earnings profile.
PLife Reit owns 53 healthcare-related properties, including three of Singapore' s largest private hospitals: Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital.