Month: June 2007

 

MIREIT – UBS

MACARTHURCOOK, ubs put new rating BUY with target price $2.07

  • MacarthurCook Limited’s foothold in Asia . MacarthurCook Limited (MCK), a specialist fund manager in Australia, launched MacarthurCook Industrial REIT (MI-REIT) with an initial portfolio of 12 Singapore industrial assets valued at S$316m. MCK sees MI-REIT as the primary vehicle to expand its direct industrial real estate funds management business in Asia. MI-REIT aims to grow its portfolio in Asia by S$300-500m pa over the next three years.
  • First right of refusal from MCK and UEL . The manager of MI-REIT is jointly owned by MCK (92.5%) and United Engineers (UEL, 7.2%). MI-REIT has been granted first right of refusal for five years for industrial assets offered to MCK in Asia. We believe UEL has also granted MIREIT first right of refusal to buy Print Media Hub in 2007, and is considering selling other assets in Singapore to MI-REIT.
  • Debt capacity of over S$200m and potential 23% accretion . MI-REIT’s current portfolio provides 2% pa organic rental growth. In addition, MI-REIT’s current gearing is 8%. We expect MI-REIT to acquire more assets in Singapore and reach its gearing target of 45% within the next 18 months. We estimate this could increase DPU by 23% between now and end-FY09.
  • Valuation initiate coverage with Buy 2, S$2.07/unit PT . Our DCF valuation is S$2.04/unit, with our 12-month forward DCF-based price target of S$2.07/unit. At the current price level, MI-REIT’s DPU yield for FY08 is 6.5%.

June 8, 2007 AIMSAMPIReit, MI-REIT No Comments »

Singapore Reits – DMG

Japan firm plans to list Reit in S’pore

Tokyo-based real estate fund manager Re-plus Inc is in talks with bankers to list the first Singapore property trust backed by a Japanese sponsor.

Re-plus wants to list a real estate investment trust (Reit) that would include two Chinese office buildings worth at least US$400 million. Situated in Beijing, the buildings are the only overseas assets in Re-plus’s portfolio, which is valued at about 270 billion yen (S$3.4 billion).

According to a banker, The portfolio has not been finalised yet. They are in talks with several banks now, but the trust could come to the market early next year. Re-plus, valued by the market at US$482 million, already manages Re-plus Residential investment, a Reit based on rents collected from its apartments in Tokyo.

Bankers said that Re-plus wants to list its Reit in Singapore because Japanese-listed property trusts are not allowed to own foreign assets. Singapore’s Reit market – the third-largest in the Asia-Pacific after Australia and Japan – has grown to more than US$18 billion, boosted by trusts containing assets ranging from Indonesian hospitals to Chinese shopping malls.

June 7, 2007 Uncategorized No Comments »

Singapore Reits – UBS

Global Equity Research PT adjustments following rise in spot risk free rate

Event – PT revisions downwards by average -1.8%
We have moved the spot risk free in our DCF model to 2.9% for yr0-10, from 2.7% following recent interest movements. Our terminal rate (yr10+) is unchanged at 3.6%.

Impact – Downgrade CCT and SUN

This move lifts our price targets downwards by -1.8% on average. Due to recent price movements we have moved CCT from a Neutral 2 to a Reduce 2 and SUN from a Buy 1 to a Neutral 1. We believe the office rental uptrend has been largely priced in and it is increasingly difficult for these REITs to make yield-accretive acquisitions domestically.

Action – Overweight Industrial & Retail

Our key picks among the SREITs are 1. Mapletree (acquisition upside potential not priced in) 2. Cambridge (re-rating potential & possible acquisition upside) =3. Domestic retail – FCT and CMT (organic growth likely to continue to exceed expectations). We maintain a Buy 2 on KREIT due to the strong expected rental reversions which we believe have not been priced in.

Valuation

The sector continues to offer relatively attractive pricing currently, with a 4.3% CY’07 yield, 6.0% ’07-12 DPU growth, and 7.5% upside to our price target. We recognise the expected S$5bn+ of capital raising in 2007 ($945m YTD) is likely to provide a moderate headwind.
June 5, 2007 CCT, CMT, ESR, FCT, KepREIT, MLT, Suntec No Comments »

FirstREIT – SGX

First REIT acquires 3rd Singapore nursing home (51 Lentor Avenue) for S$12.8 million

  • Marks the Group’s 4th acquisition in Singapore
  • Expected incremental annualized distribution per unit of 0.067 Singapore cents

SINGAPORE – 1 June 2007 – First Real Estate Investment Trust (“First REIT”), Singapore’s first healthcare real estate investment trust, announced that it has entered into a conditional Option Agreement (“Option Agreement”) for the acquisition and lease of a nursing home at 51 Lentor Avenue (the “Property”) for S$12.8 million.

This latest move follows First REIT’s acquisition of two nursing homes and a hospital in Singapore in January 2007.

The Option Agreement was entered into with the Vendor – Sphere Investment Pte Ltd, which currently owns the four storey custom-built 148-bed nursing home with a land area of 2,485.6 square metres and gross floor area of 2,982.721 square metres. Upon the completion of the acquisition, First REIT will in turn lease the Property to First Lentor Residence Pte Ltd for 10 years at a commencement rental income of S$998,400 per annum, with an option to renew the lease before the expiry. In addition, First REIT will enjoy annual step up rental increases in the subsequent years for up to 10 years.First REIT, which expects the acquisition to be completed by June 2007, estimates that Property will give rise to an incremental annualised distribution per unit (“DPU”) of 0.067 cents.

“This acquisition will represent our third nursing home in Singapore. We will continue to identify acquisition targets for modern and purpose-built nursing homes in Singapore as they provide relatively high yield with stable and high occupancy,” said Dr Ronnie Tan, Chief Executive Officer of Bowsprit Capital Corporation Limited, as manager of First REIT (the “Manager”).

Dr Tan added, “Not only will this acquisition further strengthen our income stream, it will also enlarge First REIT’s asset portfolio, raising it to S$293.1 million once the deal is completed. This will expand our asset base by 14% since our IPO in December 2006. Our investment goal is clear – to grow our asset base to S$500 million within 3 years from the initial public offer, focusing on quality healthcare assets in Asia. Based on the acquisition momentum we have set, and the pipeline of acquisitions which we are currently negotiating, we believe we are on track to achieve our target.”

The acquisition will be fully funded by debt via the proceeds of a S$90 million term loan from Oversea-Chinese Banking Corporation set up on 11 January 2007. Assuming that the acquisition is successfully completed by June 2007, First REIT’s gearing will be raised from the current 7.88% to 11.68% as at 30 June 2007.

“Our gearing after the acquisition will still be relatively low, giving us financing flexibility to undertake more acquisitions that fit in with our strategy. We will continue to look out for quality healthcare assets in different parts of Asia so as to reduce our reliance on any single country or type of tenants,” added Dr Tan.

First REIT believes that it is well positioned to benefit from Asia’s growing healthcare industry, supported by rising life expectancies in the region, increasing consolidation within the Asian healthcare industry, as well as the growing demand for healthcare services. Itremains confident of delivering on its FY2007 forecast distribution of 6.51 cents as indicated in First REIT’s prospectus dated 4 December 2006.

Source : SGX

June 1, 2007 FirstREIT No Comments »