AREIT – SGX
COMPLETION OF THE ACQUISITION OF GOODMAN’S STAKE IN ASCENDASMGM FUNDS MANAGEMENT LIMITED AND UNITS IN A-REIT
The Board of Directors of Ascendas-MGM Funds Management Limited (“AMFML”), as manager of Ascendas Real Estate Investment Trust (“A-REIT”, and manager of A-REIT, the “Manager”) wishes to announce that Ascendas Investment Pte Ltd, a wholly-owned subsidiary of Ascendas Pte Ltd, had on 26 March 2008, completed its acquisition of 40% interest in the Manager comprising 400,000 ordinary shares in the ordinary share capital of the Manager from Goodman Singapore Industrial Management (Aust) Pty Limited (“Goodman”).
At the same time, Ascendas Land (Singapore) Pte Ltd (“ALSPL”), has completed the acquisition of 83,241,801 units in A-REIT (“Units”), representing 6.28% of the total issued Units (the “A-REIT Sale Units”) from Goodman Singapore Pte Limited (“GSPL”).
Following the completion, AMFML is now a wholly-owned subsidiary of Ascendas Investment Pte Ltd and an indirect wholly-owned subsidiary of Ascendas Pte Ltd and Jurong Town Corporation; and it has been renamed as Ascendas Funds Management (S) Limited.
Further, following the completion, Mr Gregory Leith Goodman, Mr James Hodgkinson and Dr Peter Dodd have relinquished their directorships in AMFML. The Board of the Manager now comprises:
Mr Lew Syn Pau (Chairman of the Board)
Mr David Wong (Audit Committee Chairman)
Mr Benedict Kwek (Audit Committee Member)
Mr Swee Kee Siong (Non-Executive Director)
Ms Chong Siak Ching (Non-Executive Director)
Source : SGX
AllCo – BT
Debt reprieve for Allco Reit – but at a much higher cost
Market cheers news the firm has secured extension of loans
Allco Commercial Real Estate Investment Trust (Allco Reit) earned a reprieve in its debt repayment obligations last week – but at a much higher cost.
Allco (Singapore) Limited, the manager of Allco Reit, had announced last Thursday that the trust had received in-principle approval to extend the due date of S$550 million in debt from July 31, 2008 to Dec 31, 2009. It had not detailed the terms and conditions of the extension, saying only that it was currently reviewing them.
When asked by BT yesterday about the terms of the refinancing, Nicholas McGrath – CEO and managing director of Allco (Singapore) Limited – did reveal that, while the terms were largely the same, the refinancing was ‘a lot more expensive’.
He declined to state the exact quantum of the increase in the cost of refinancing, that is the change in interest rate charged by creditors for the extension of the loan – explaining that such matters are confidential.
Refinancing of loans is typically a pricier matter for most debtors, with creditors choosing to charge more for the extension or relief in debt obligations.
Mr McGrath could, however, reveal to BT the blended margins for Allco Reit’s total debt obligations. The trust currently has S$620 million in Sing-dollar debt and another S$260 million in debt denominated in Japanese yen. The blended interest rate for its total is 3.8 per cent for 2008 and 3.95 per cent for 2009 – with the interest rate being higher for the Sing-dollar debt than the Japanese-yen portion.
‘But the margins are still lower than what our properties are yielding,’ Mr McGrath explained.
Allco Reit’s key properties include China Square Central and 55 Market Street in Singapore, and Central Park in Perth, Australia.
S$70 million of its Sing-dollar debt will mature in November 2008, which Allco Reit will repay in full with the proceeds from the sale of the assets of Allco Wholesale Property Fund. The rest of its debt obligations are long-term ones.
Mr McGrath also told BT that the trust intends to decrease its leverage over the next 12 months – from 43 per cent currently, to about 30 per cent in a year’s time.
Allco Reit’s debt repayment concerns had been the subject of a fierce legal tussle last week. The trust had sought a court injunction to head off a credit ratings downgrade by Moody’s Investors Service, concerned that the downgrade would hurt its attempts to refinance its debt. But Moody’s had battled the injunction, saying it should not be stopped from going ahead with its independent credit reviews.
The injunction was set aside by the High Court last week, and Moody’s had gone ahead with the ratings downgrade – lowering the trust’s corporate family rating to ‘Ba2’ from ‘Ba1’ and retaining the ratings on review for further possible downgrade.
Despite the downgrade, Allco Reit still succeeded in refinancing its debt – announcing a day after Moody’s ratings revision that it had managed to secure an extension of its loan obligations.
And the market has reacted favourably to Allco Reit’s announcement, with its share price having climbed steadily since. Allco Reit shares closed at 80.5 cents yesterday – up 11 per cent from its close of 72.5 cent last Thursday, after the ratings downgrade.
MACQUARIE SINGAPORE REIT INDEX – SGX
The Benchmark Index (which has been named “Macquarie Singapore REIT Index”) is compiled and calculated independently by FTSE Group (“FTSE”).
The Singapore-listed real estate investment trusts currently included in the FTSE Global Equity
Index Series and the Macquarie Singapore REIT Index are as follows:
1. Allco Commercial Real Estate Investment Trust;
2. Ascendas India Trust;
3. Ascendas Real Estate Investment Trust;
4. Cambridge Industrial Trust;
5. CapitaCommercial Trust;
6. CapitaMall Trust;
7. CapitaRetail China Trust;
8. CDL Hospitality Trusts;
9. Fortune Real Estate Investment Trust;
10. Frasers Centrepoint Trust;
11. K-REIT Asia;
12. Mapletree Logistics Trust; and
13. Suntec Real Estate Investment Trust.
LMIR – BT
LMIR Trust makes maiden buy
LIPPO-Mapletree Indonesia Retail Trust (LMIR Trust) yesterday announced its maiden acquisition since its listing in November last year. The trust is buying Sun Plaza, a mall in Medan, North Sumatra, for $147.4 million.
The purchase will increase LMIR Trust’s asset portfolio by 15 per cent to $1.15 billion, from $1.0 billion at present.
It will also increase total net lettable area (NLA) in the trust’s portfolio by about 20 per cent to 376,035 square metres.
The acquisition will be funded 20 per cent with internal cash resources and 80 per cent with debt, drawing from a $125 million term loan facility granted by Deutsche Bank at an effective all-in cost of 6.89 per cent. The purchase takes LMIR Trust’s gearing from zero to 10.2 per cent.
The property is the largest and only upmarket retail mall in Medan, Indonesia’s third most populous city, the trust said. The mall has a land area of about 29,419 sq m and gross floor area and net lettable area of 87,188 sq m and 62,583 sq m respectively. It has a committed occupancy of 97.0 per cent for the month ending April 2008.
LMIR Trust said that there are further opportunities to improve the tenant mix at the mall to increase gross revenue and net property income.
It has identified and held preliminary discussions with many leading Indonesian and international retailers which are currently not represented at the new mall but are tenants of other properties in the trust’s portfolio, the trust said.
After the acquisition, the trust’s manager plans to explore various options to increase rentable area – such as increasing the net lettable area and reconfiguring the layout.
LMIR Trust listed on the Singapore Exchange in November 2007 with a portfolio of seven Indonesian malls and seven retail spaces in other malls. It sold some 645.5 million units at 80 cents each. The trust said then that it aims to triple its portfolio size to $3 billion by end-2009.
LMIR Trust’s shares were last traded at 57 cents.