Category: Saizen
Saizen – BT
Saizen Reit takes another hard knock
Trust has 22 of its 146 Japan properties in worst-hit Sendai
NOT all S-Reits with properties in Japan have been equally hit on the stock market. Of the Singapore-listed real estate investment trusts with such exposure, DMG Research pegged Saizen Reit as potentially the worst-off trust, since all of its 146 properties are in Japan, and 22 are in the worst-hit city of Sendai alone. Yesterday, the Saizen Reit counter took another hit, tanking 9.7 per cent to 14 cents.
In contrast, Parkway Life Reit, whose healthcare facilities are mainly in western Japan, dropped 1.2 per cent to $1.68. None of its properties were structurally affected.
Another Singapore-listed company, Uni-Asia Finance, which manages or has interests in hotel and residential properties in Japan, shed 3.8 per cent to 25 cents. Uni-Asia, an Asia-based structured finance arrangement and alternative assets direct investment firm, said none of its properties were structurally affected. All 13 of its hotels are operational.
In a late update yesterday, Saizen said: ‘In total, all 6 properties in Morioka and Koriyama, and 8 out of 22 properties in Sendai have been viewed by the property managers thus far, and preliminary reports have confirmed that these properties appear to have sustained only minor damage and are not in any imminent danger of collapse. However, the full extent of damage can only be ascertained after more detailed assessments.’
Of those 28 properties, 12 belong to YK Shintoku portfolio and do not contribute to distributions. Eleven are in Sendai and one in Morioka. Saizen’s 22 Sendai properties make up 11.2 per cent of its $581.8 million portfolio and contribute 10.6 per cent of the $56.3 million annual rental income. Koriyama’s three properties comprise 2.9 per cent of portfolio value and give 2.6 per cent rental income.
Morioka’s three properties constitue only 1.4 per cent of the Reit’s portfolio value and contribute 1.5 per cent of rental income.
For PLife Reit, it is ‘business as usual’ at its 29 nursing homes and one pharmaceutical manufacturing facility. The Reit’s closest property is in Akita, 200km away from the Sendai area.
The company does not foresee ‘any disruption to their long term business operations’. ‘Nursing homes residents usually stay for a longer term, at around three to five years on average. Hence, we do not expect any significant changes in occupancy rates. Our Japan nursing homes are on long term master leases and as such, income will not be affected by any dips in occupancy rates,’ said PLife Reit’s company spokesman.
CIMB analyst Janice Ding said in a note: ‘We are comforted that the manager is holding six to nine months of security deposits in the bank from all its Japanese master tenants.’ She added P-Life Matsudo, the Reit’s manufacturing facility, reported only minor water pipe leakage.
CIMB maintained its ‘outperform’ rating on the Reit, with a target price of $1.98.
REITs (Japan Assets) – BT
S’pore Reit buildings in Japan get away lightly
The damage unleashed by the earthquake and tsunami on the north-eastern coast of Japan has left most of the properties owned by Mapletree Logistics Trust, Parkway Life Real Estate Investment Trust (Reit) and Global Logistic Properties (GLP) relatively unscathed.
Mapletree Logistics Trust said yesterday that 13 out of its 14 properties in Japan ‘escaped with either no damage or minimal damage’. Its remaining property in Sendai – where devastation has been greatest – Sendai Centre, has been affected by the tsunami, the trust said.
The latest valuation has put the cost of reinstating the building at about 600 million yen, or about S$9 million. The trust’s manager, however, does not expect the cost of repairs to amount to that much.
‘Preliminary report suggests that the building is intact. However, the affected area has been cordoned off by the local authorities due to safety measures. The full extent of damage can only be ascertained when access into the property is allowed,’ the trust said in a filing on the Singapore Exchange yesterday.
Sendai Centre is the second smallest of the trust’s properties in Japan by revenue contribution, accounting for 0.7 per cent of its portfolio’s total gross revenue.
On Friday night, GLP said that damage to its property had been estimated at about 3.9 billion yen or US$47.5 million, with the likely loss of rental income coming up to 0.89 billion yen or US$10.8 million. In total, this accounts for less than one per cent of GLP’s US$6.3 billion portfolio of properties in Japan. The majority of the repairs to its properties will take place in the next 30 days.
‘The low level of losses are testimony to the quality of our portfolio and property management as well as the rapid response of our dedicated team in Japan,’ said Jeffrey Schwartz, deputy chairman of GLP, who had been visiting the operations in Japan when the earthquake took place.
Parkway Life Reit, which has 29 properties in Japan, said that none of them have been structurally affected. ‘In addition, none of our properties are located within the evacuation zones of the nuclear plants in Fukushima Prefecture, with our nearest property to the nuclear plant site at least 200 kilometres away,’ it said yesterday.
Saizen Reit, a firm with 22 properties in Sendai alone, said on Friday night that its manager, Japan Residential Assets Manager Limited, and asset manager, KK Tenyu Asset Management, were contacting local property managers to assess the extent of the impact, but that it was being hampered by ‘breakdown of telecommunications networks and power blackouts’.
The collective value of its properties in the three affected areas – Sendai, Koriyama and Morioka – stand at 5.88 billion yen, accounting for 15.5 per cent of its total portfolio value.
Mapletree Logistics Trust, Parkway Life Reit and GLP have said that all their staff in Japan are safe and accounted for.
Saizen – BT
Saizen Reit defaults on 7.25b yen loan
Property trust says maturity default not likely to affect its ability to operate
Singapore-listed property trust Saizen Reit said yesterday it had defaulted on a 7.253 billion yen (S$112.65 million) commercial mortgage-backed securities loan.
The company said in a statement the ‘maturity default’ was not expected to affect Saizen Reit’s ability to operate as a going concern nor impair its ability to get further financing.
A maturity default occurs when the borrower fails to pay the lender the balloon payment, or principal balance, at maturity.
‘The main impact of this maturity default is an increase in the interest rate from 3.07 per cent to a default rate of 7.07 per cent per annum,’ Saizen said in a statement.
The loan, known as ‘YK Sintoku’, is a non-recourse and not cross-collateralised against other properties in Saizen Reit’s portfolio. It was originally provided by Credit Suisse Principal Investments Ltd, a unit of Credit Suisse, in 2005 and was later securitised and transferred to an issuer of the commercial-mortgage backed securities, the statement said.
Saizen, which went to market in November 2007, is the only Singapore-listed real estate investment trust (Reit) with purely Japanese regional residential properties. — Reuters
Saizen – CNA
Saizen REIT defaults on S$113m loan but unlikely to affect other portfolios, loans
Mainboard-listed Saizen Real Estate Investment Trust said it has defaulted on a commercial mortgage-backed securities loan worth 7.3 billion yen or about S$113 million.
It said despite efforts since early last year, it was unable to find a commercially viable solution before the maturity of the YK Shintoku loan.
The loan is non-recourse and Saizen said the default is not expected to affect its other portfolios or loans.
And it said this is also not expected to affect its ability to operate as a going concern or impair its ability to obtain further financing from financial institutions.
Saizen said the main impact of the maturity default is an increase in the interest rate from 3.07 per cent to a default rate of 7.07 per cent a year.
It doesn’t expect immediate foreclosure by the lender and it said refinancing of the loan is still possible with the consent of the lender.
The REIT said in the event of a foreclosure, the pro forma impact on its net asset value will be a reduction of about 10 per cent.
Meanwhile, CEO of the REIT’s manager, Chang Sean Pey, said efforts to refinance the loan will continue.
He said: “CMBS default is not uncommon in Japan in the past one year. And all this is because the CMBS market basically shut down after the credit crisis. We are continuing talks with banks on the refinancing. It’s just that we need time but we’re continuing to work on that.”
Mr Chang added that the lender is currently in talks with four banks about the refinancing of this loan.
The property trust said it expects to fully repay its other loans maturing over the period from this month to January next year.
Saizen – CNA
Saizen REIT unit gets S$15.7m loan from Japan’s Mizuho bank
Yugen Kaisha JOF, a subsidiary of mainboard-listed Saizen REIT, has entered into an agreement for a S$15.7-million loan from Japan’s Mizuho Bank.
The loan, which has been fully disbursed, has a term of 10 years.
Under the terms, the asset manager of Saizen will act as a guarantor for the loan, and the property portfolio of Yugen will be pledged as security for the loan.
The proceeds will be used to fully repay a S$6.3-million short-term bridging loan that the Saizen unit has from Star Finance, and the balance will be used for working capital purposes.
Saizen said on Thursday its asset manager plans to explore further financing possibilities with Mizuho.