Category: MI-REIT
MI-REIT – SGX
MACARTHURCOOK INDUSTRIAL REIT ACQUIRES CHANGI PROPERTY FOR S$20.8 MILLION
– Increases FY2008 DPU by 0.23 cents to 7.64 cents per unit and FY2009 DPU by 0.22 cents to 7.81 cents per unit
Singapore, 24 October 2007 – MacarthurCook Investment Managers (Asia) Limited
(“MCKIM Asia”), the Manager of MacarthurCook Industrial REIT ( “MI-REIT”), is pleased to announce that MI-REIT, through its Trustee, HSBC Institutional Trust Services (Singapore) Limited ( the “Trustee”), has signed a conditional call option agreement (the “Agreement”) to acquire a logistics and warehouse building from Prologis Singapore Pte Ltd ( “Prologis” or the “Vendor” ).
The property at 11 Changi South Street 3 (the “Property” ) will be sub-leased to its current tenant, Builders Shop Pte Ltd ( “Builders”) for the remainder of the existing 10 year lease term, which commenced on 16 December 2004. Builders, a division of SGX-listed Shining Corporation Limited, is primarily engaged in the supply of quality building materials. The acquisition is expected to be completed by 4Q FY2007.
At an initial yield of 7.23%, the acquisition of the Property is accretive to MI-REIT’s distribution per unit (“DPU”). The pro forma financial effect of the acquisition on DPU is:
– an additional 0.231 Singapore cents per unit, representing an increase of 3.10% from the forecasted FY2008 DPU of 7.41 Singapore cents per unit2 for the financial year ended 31 March 2008 (“FY2008”); and
– an additional 0.221 Singapore cents per unit, representing an increase of 2.90% from the forecasted DPU of 7.59 Singapore cents per unit2 for the financial year ended 31 March 2009 (“FY2009”).
Rationale for the acquisition
Mr Chris Calvert, CEO of the Manager, said: “We are pleased with the acquisition of 11 Changi South 3, which is a strategic operational fit for MI-REIT’s industrial property portfolio.
The acquisition expands our presence in Singapore’s logistics and warehousing property sector and brings our total investments to over S$500.9 million3 in 16 properties.”
The acquisition increases MI-REIT’s exposure to the tightly held Changi industrial precinct and the average lease expiry profile from 6.3 to 6.4 years.
Other benefits of the acquisition to MI-REIT’s portfolio include:
MI-REIT – Phillip
MI-REIT announces its third acquisition since IPO, bringing its total value of announced acquisitions to $126.1 million.
MI-REIT completed the acquisition of 541 Yishun Industrial Park A on 4th Oct 2007. The property will be leased back to the tenant for a 12 year lease term with a built-in rental escalation structure. With an acquisition target of $500 million annually, we believe there will be more annoucements coming up.
About the properties. The latest acquisition improves the lease expiry profile as well as the diversification of the property portfolio. WALE will improve from a pre-acquisition of 6.3 years to 7.06 years post-acquisitions. The acquisitions will be fully funded by debt. Gearing post-acquisitions of 7 Clementi Loop and 541 Yishun Industrial Park A will increase to 16%. With
a gearing limit of 60% and a further $159 million of corporate debt facility, MI-REIT still has much debt room for further acquisitions.
Valuation. We revise our revenue to factor in the contributions from the latest acquisition. Our forecasted DPU increases to 7.48 cents for FY08 and 7.96 cents for FY09, translating to a yield of 6.33% and 6.74%. Our fair value remains at $1.39, derived from our DCF model. Reiterate Buy.
MI-REIT : SGX
MACARTHURCOOK INDUSTRIAL REIT COMPLETES ACQUISITION OF WAREHOUSE PROPERTY FOR S$16.8 MILLION
– Increases portfolio value to S$472.9 million
– Yield-accretive acquisition
Singapore, 4 October 2007 – MacarthurCook Investment Managers (Asia) Limited (“MCKIM
Asia”), as Manager of MacarthurCook Industrial REIT ( “MI-REIT”), is pleased to announce that through HSBC Institutional Trust Services (Singapore) Limited ( the “Trustee”), MI-REIT has completed the acquisition of a property for a total consideration of S$16.8 million.
Following a simultaneous exchange and settlement of contracts, MI-REIT has completed the sale and purchase of 541 Yishun Industrial Park A (the “Completed Acquisition” or “541 Yishun”), in connection with the conditional sale and purchase agreement1 entered into between the Trustee and King Plastic Pte Ltd ( “King Plastic” or “the Vendor” ) on 3 October 2007.
King Plastic, a leading manufacturer and distributor of synthetic products will lease back the property for 12 years with an option to renew for another 6 years. With the completion of this acquisition and inclusion of the property, MI-REIT now comprises 15 assets with a total portfolio value of S$472.9 million2.
Mr Chris Calvert, CEO of the Manager, said: “The acquisition is in line with our aim to achieve distribution growth through the acquisition of properties that contribute to the long-term growth and income stability of the MI-REIT portfolio.”
Rationale for the acquisition
Yield Accretion
The acquisition of 541 Yishun Industrial Park A is expected to be accretive to MI-REIT’s distribution per unit (“DPU”), with the following pro forma financial effect:
MI-REIT
MACARTHURCOOK GROUP EXPANDS TEAM
Singapore, 1 October 2007 – Australian Securities Exchange listed MacarthurCook
Limited (ASX Code: MCK) is pleased to announce the appointment of the following senior
executives:
Ms Philippa Marshall has been appointed to Head of Legal & Compliance and will have global responsibility for all legal and compliance matters. In addition she will be Company Secretary of MacarthurCook Limited and MacarthurCook Fund Management Limited, the responsible entity of the MacarthurCook Property Securities Fund (ASX code: MPS) and MacarthurCook Asian Real Estate Securities Fund (ASX code: MSAS). Ms Marshall was previously General Manager Legal & Compliance of VicTrack and prior to this a partner of leading legal firm Blake Dawson Waldron.
Mr Andrew Bygrave has been appointed Head of Institutional Business for the MacarthurCook Group and will have international responsibility for investor relations, coordination of capital raisings, marketing and public relations. Mr Bygrave has over 10 years Investment Banking experience in corporate finance and legal. Mr Bygrave was previously Vice President at Deutsche Bank in Hong Kong, Vice President & Counsel with Credit Suisse in Australia and Legal Manager at Citigroup in London.
Mr Stuart Milham has been appointed to Joint Fund Manager of the MacarthurCook Industrial Property Fund. Mr Milham will also be involved with assisting SGX listed MacarthurCook Industrial REIT (SGX Code: MacCookIReit) on acquisitions, as well as driving acquisition of industrial assets in Europe and North America. Mr Milham has more than 16 years commercial and legal experience in the property industry. Most recently Mr Milham was Senior Legal Counsel at Austock Property Funds Management Limited where he was involved in property acquisitions, due diligence, leasing, financial structuring, capital raising and corporate advice in relation to the $300m ASX listed Australian Education Trust and a portfolio of industrial, hotel and infrastructure properties.
The MacarthurCook Industrial REIT team has expanded with the appointment of two new acquisition managers:
Mr Andrew Chee Chin Leong has been appointed as an acquisition manager to acquire property assets across Asia for MI-REIT. Mr Chee has over 13 years professional experience in property consultancy, valuation and business development.
Mr Alan Wong Peng How has been appointed as an acquisition manager to acquire property assets across Asia for MI-REIT. Mr Wong has over 12 years experience in business development with 7 years in the real estate industrial sector. Mr Wong was previously an Investment Manager with a leading industrial real estate developer.
We are pleased to announce the appointment of Ms Nancy Tan as Acting Fund Manager of MI-REIT, replacing Ms Christine Mount who will leave her current role effective 23 October 2007. Ms Tan, who is currently serving as Senior Asset Manager of MI-REIT, has more than 20 years experience in the commercial real estate and asset management industry and has held senior management roles with one of Singapore’s largest real estate developers. She has managed a portfolio of commercial assets in excess of $S1.0 billion.
As the MacarthurCook Group looks to expand its presence in Asia and Europe it is anticipated that further senior appointments will be made over the coming months.
MI-REIT – Phillip
Expansion Within Sight
We are initiating coverage on MacarthurCook Industrial REIT (MIREIT) with a BUY call and a 12 month fair value of $1.39/share. The counter is currently trading at a discount of 15% to our fair value. With a projected FY08 DPU of 7.43 cents, MI-REIT offers a yield of 6.35%. We expect the Manager to annouce further acquisitions in the coming months in anticipation of its target of $500 million of acquisitions a year.
Diverse Industrial Portfolio. The initial property portfolio consists of a diversified portfolio of 12 industrial properties located in Singapore. MIREIT’s investment objective is to pursue acquisition opportunities locally as well as across Asia. Recently MI-REIT annouces the acquisition of 2 additional properties. MI-REIT will add an office park, which is in increasing
demand to its portfolio. With the increased diversification, it reduces the reliance on any one sub-sector or tenant.
Lowest geared REIT. MI-REIT’s current gearing stands at 8.6% which is the lowest among the S-REIT. MI-REIT had obtained a corporate rating of Baa3 from Moody’s in June, which will increase its gearing limit to 60%. This provides substantial capability for future acquisitions. Currently MIREIT has an available $193 million of corporate debt facility to utilise.
Stable income. MI-REIT’s properties has a 100% occupancy rate with an average lease term of 6.3 years. The leases have a built-in rental escalation component which ensures rentals are up to market. 70.8% of tenants are SGX listed companies or subsidiaries of SGX listed companies. With a security deposit ranging from 3 months to 24 months, it reduces the risk of income variability in the event of any lease termination.
Valuation. Our DCF model gives us a fair value of $1.39. MI-REIT compares attractively in terms of yield and P/NAV to the other listed SREIT. With a forecasted distribution of 7.43 cents, MI-REIT offers an attractive yield of 6.35%, which is higher than the average S-REIT yield of 5.05% and a spread of 366bp over Singapore 10-yr bond yield of 2.69%(as at 14 Sep 2007). MI-REIT also trades at a lower P/NAV of 1.03 to the SREIT average of 1.23. We believed regional acquisitions would provide a near term catalyst to the share price.