Suntec – BT
SINGAPORE – Suntec Real Estate Investment Trust , which owns most of Singapore's Suntec City complex, said on Monday it planned to raise around $429 million (US$325 million) via a private placement of new units.
Suntec will issue 310.7 million to 320 million new units at between $1.34 and $1.38 per unit, Suntec's manager said in a disclosure to the Singapore Exchange.
Suntec obtained shareholder approval on Nov 26 to buy a one-third stake in Marina Bay Financial Centre Towers 1 and 2 along with the mall and 695 car park lots from a firm linked to Hong Kong's Cheung Kong and Hutchison Whampoa.
In October, Suntec announced that it would buy the stake for $1.5 billion.
The company has hired Citigroup, DBS Bank and Standard Chartered to act as joint financial advisers, underwriters and bookrunners for the placement.
ARA, the manager of Suntec Reit, is 15.6 per cent owned by Cheung Kong Investment Company Ltd, an entity controlled by Hong Kong billionaire Li Ka-Shing. — REUTERS
PST – BT
PST buys five bulk carriers for US$150m
MOVING further from its purely container ship holdings past, Pacific Shipping Trust (PST) has acquired five 57,000 deadweight-tonne (dwt) supramax bulk carriers for US$150 million.
This is the third such acquisition of non-container ship vessels made by PST in five months.
Now, one-third of PST’s 21 vessels are bulk carriers, up from the two 180,000-dwt capesize bulk carriers it bought in June, PST’s first diversification move.
Last month, it bought two 24,000-dwt multi-purpose vessels (MPPs) to add to its fleet of 12 container ships.
The five supramax bulkers will be built by Tianjing Xingang Shipbuilding Industry.
After delivery between October 2012 and April 2013, they will be leased to Korean-based logistics company Glovis on time charter agreements.
The agreements with Glovis add US$250 million to PST’s total contracted revenue, bringing that figure to US$800 million, an increase of 45 per cent.
The tenor of the Glovis charters will last eight and 10 years, and will provide PST charter income stretching into 2023.
PST would not reveal the daily charter hire rate secured from Glovis due to non-disclosure terms from the latter.
However, going by PST’s comments that charter rates are the same for all five vessels, this pegs the rate at about US$15,500 per day.
While its latest buys have been strictly non-container ships, Teo Choo Wee, acting CEO of PST Management, the trustee-manager of PST, told BT that the company would consider diving back into the vessel class now that charter rates have risen sharply since last year.
London shipbroker Clarkson said in September that charter rates for a gearless panamax ship of 3,500 TEUs (twenty-foot equivalent units) rose to US$18,250 a day from an average US$6,575 a day throughout 2009.
‘The charter rates to the price of the vessels didn’t make sense at all to buy more. But now it seems it’s different,’ said Mr Teo. ‘We’ve also heard that a number of good operators are out there looking for financing, so if there’s a good deal out there, we’d definitely consider it.’
PST has slowly decreased income reliance on its parent company, Pacific International Lines (PIL).
Glovis is now its majority contributor to total contracted revenue, making up 31 per cent of PST’s total.
PIL makes up 24 per cent of total charter revenue, down from 35 per cent; Jiangsu Shagang 24 per cent from its previous 34 per cent; and Cosco Xiamen 14 per cent, down from 19 per cent. CSAV takes up 7 per cent, down from 12 per cent.
Separately, PST announced that it has secured financing worth US$150 million from Bangkok Bank, DBS Bank and Malayan Banking that will pay for about 81.9 per cent of its MPPs and capesize bulkers, costing about US$183 million in total.
The remaining 20 per cent of the vessels’ cost considerations are drawn from ‘funds made available from PST’s existing cash retention programme’.
Mr Teo said the securing of the bank financing should make it unnecessary for PST to raise new equity to fund these acquisitions.
The loan-to-value (LTV) ratio of PST is now at 46 per cent for its 12 container ships.
When the two capesize bulkers are delivered in September 2011, it will increase to 52 per cent.
After all nine new vessels are delivered in 2013, LTV ratio will reach 55 per cent.
PIL will be providing pre-delivery down payment for the five new supramax bulk carriers.
PST closed trading in the market yesterday 1.5 cents higher at 36 US cents.
Sabana – DJ
SINGAPORE (Dow Jones)–Sabana Shari''ah Compliant Industrial Real Estate Investment Trust (M1GU.SG), or Sabana REIT, Friday opened 5.7% lower on its debut on the Singapore Exchange.
Sabana REIT, the world''s largest listed Shariah-compliant REIT by total assets, opened at S$0.99 compared with an initial public offering price of S$1.05. It was trading at S$1.00, or 4.8% lower than the IPO price, at 0610 GMT.
The Singapore-based company, which priced its offer at S$1.05 per unit, saw its IPO subscribed 2.5 times, allowing it to raise a total of S$666.40 million in gross proceeds.
Sabana, which is also the first Shariah-compliant listing in Singapore, had offered a total of 632.8 million units, of which 101.8 million were placed with cornerstone investors.
Of the remaining 507.99 million units, a total of 432.49 million were placed with institutional investors, 25.5 million with the public and the remaining 50 million reserved for company officials.
Sabana intends to use the proceeds of the IPO to purchase properties and to pay off debt-related costs.
The REIT''s assets are estimated at S$850 million.
Sabana – BT
Sabana Reit units 2.5 times subscribed
SHARES in Sabana Shari’ah Compliant Industrial Reit were subscribed about 2.5 times at the close of its initial public offering on Wednesday.
The offer for Singapore’s first real estate investment trust that adheres to Islamic finance principles comprised about 508 million units at $1.05 apiece.
This included an international placement of about 432.5 million units (which was subscribed about 1.9 times) and a retail tranche of 75.5 million units made available to the Singapore public.
For the public offer, 11,159 valid applications for 314.1 million units were received for the 25.5 million units available – which translated to a subscription ratio of 12.3 times.
The remaining 50 million were allocated as reserved units.
‘The level of interest shown by the public as well as institutional investors is a signal of their confidence in what we believe to be the strong growth potential of Sabana Shari’ah Compliant Reit,’ said Kevin Xayaraj, chief executive and executive director (investments) of the trust’s manager.
‘We are proud that we have four quality cornerstone investors, and two of them are from the Middle East.’
The offer by what is also the world’s largest Syariah-compliant Reit is expected to raise $664 million.
Most of the proceeds will be used to pay for three industrial properties in Singapore that it plans to buy from its sponsor, two of which are chemical warehousing facilities.
Trading of the units is expected to start at 2pm today.
The Hongkong and Shanghai Banking Corporation Limited, Singapore Branch, is the sole financial adviser. HSBC, United Overseas Bank Limited and Daiwa Capital Markets Singapore Limited are the joint global coordinators, issue managers, bookrunners and underwriters.
StarHill Global – Kim Eng
New beginning beckons
We initiate coverage on Starhill Global REIT with a BUY recommendation and target price of $0.80/share. Starhill owns 13 prime commercial properties in stable, high‐growth markets in the Asia Pacific, with retail rental making up 87% of group revenue in 3Q10. DPU growth is bolstered by medium‐ and long‐term leases that provide income stability and rental upside potential, as well as acquisition opportunities. With a clear target to double asset size and the backing of a strong and committed sponsor, Starhill is poised for a new beginning. At 0.7x FY10 P/B and 6.8% FY11F yield, the stock is deeply undervalued.
Steady income from defensive rental structure
Starhill has a stable of master and long‐term leases that comes with built‐in positive rental reviews every few years. This ensures a steady stream of longterm income for the group. Around 44% of its total revenue this year comes from such leases. Its medium‐term leases, which are typically for three years, have rental tied to gross turnover, thus allowing Starhill to ride on market rental recovery and rising consumption in retail markets such as Singapore.
Asset size to double in five years
Unlike many other REITs, Starhill’s REIT manager has a clear target to double Starhill’s portfolio from $2.6b currently to at least $5b in five years. The REIT manager has been sourcing for third‐party assets in China, Australia, Singapore and London, and has a few deals on the negotiating table.
Committed sponsor with deep pocket
Starhill’s sponsor is YTL Corporation Berhad, one of the largest companies listed on Bursa Malaysia. YTL aspires to own a portfolio of prime commercial properties globally under the luxury Starhill brand, and the REIT is a viable vehicle to achieve its dream. Its financial prowess and commitment should provide Starhill with the necessary support for acquisitions.
Sharp discount hard to ignore; initiate with BUY
Starhill is trading at a steep 30% discount to its NAV in stark contrast to the 10‐30% premium commanded by its peers. We think this could be because of the lack of asset enhancement initiatives on its part. Its FY11F DPU yield of 6.8% offers a yield spread as high as 160bps over the yield of some of its retail peers. We initiate coverage with a BUY recommendation and target price of $0.80/share, based on the Dividend Discount Model.