REIT Oracle

Cromwell REIT to New Buy Italian Logistics Park

Cromwell European REIT plans to acquire a logistics park in Italy for 52.6 million Euros.

Asset

The purchased freehold property, to be completed by the end of the year, has a total leasable area of 156,888 m² and is almost fully rented with over 99% occupancy (and a WALE of 3.7 years). It is located along the A14 / E55 motorway which connects Bari to Bologna.

Financing

The total acquisition cost of 55.1 million Euros is to be paid using cash reserves and debt.

CapitaLand Retail China to Raise at Least S$300 Million of Equity

Hot on its S$822 million acquisition of different stakes in business parks, CapitaLand Retail China Trust will raise at least S$300 million with both a private placement and preferential offering.

New shares price for the private placement will be between S$1.193 and S$1.236 per share, while existing shareholders will be able to subscribe at a price between S$1.170 and S$1.210 (the allotment ratio is yet to be determined).

The private placement exercise starts today and closes tomorrow (Wednesday 18th). For the preferential offering, the record date to be eligible is November 25th, and application will need to be made from November 30 to December 8.

Ascendas REIT Buys San Francisco Offices, Raises S$1.2 Billion

Ascendas REIT continues its buying spree, with two more offices acquisitions in San Francisco, USA.

Assets

The purchased freehold assets, both built in 2017, are:

• An office building at 510 Townsend Street, currently tenanted by payment company Stripe. The property has a 27,437 m² Net Lettable Area (NLA) and comes with 7 years left on the lease.

• An office property at 505 Brannan Street with 13,935 m² NLA, current HQ of Pinterest. The lease has 12.4 years left.

Both are fully occupied under triple net leases, with a global WALE of 9.1 years.

Financing

The S$768 million operation is being funded by debt and a S$1.2 billion equity raise operation. Existing unit holders as of the 18th of November will be able to subscribe to new shares at a price of S$2.96 per new share with 37 new units for every 1,000 existing units held.

Expectations

The manager expects the operation to be DPU accretive and to improve the portfolio profile with increased WALE (from 3.9 to 4.1 years), geographical diversification and proportion of freehold assets.

CRCT Gets Into Business Parks

CapitaLand Retail China Trust (CRTC) is proposing to buy stakes into five business parks along with a stake in Rock Square mall, for a total price of S$822 millions (S$800 plus fees).

Assets

The purchased assets are:

• 80% stake in Singapore-Hangzhou Science & Technology Park (phase I and II)
• 51% stake in Ascendas Xinsu Portfolio in Suzhou
• 100% stake in Ascendas Innovation Towers in Xi’an
• 80% stake Ascendas Innovation Hub in Xi’an
• The remaining 49% stake in Rock Square in Guangzhou

Financing

Financing is yet to be determined.

CRCT intends to finance the Acquisition through an optimal mix of debt, equity and hybrid securities which will result in distribution per unit accretion.

Expectations

Along with diversifying the trust assets (which so far was exclusively operating retail properties), the manager expects the operation to be DPU accretive by 5.1% pro-forma.

About S-REIT Foreign Acquisition Binge

Yoojung Lee from Bloomberg writes about the healthy Singapore REIT market and their fresh recent surge in acquisition, spurred by lower borrowing cost and increased leveraging limits:

For trusts in Singapore, which houses the most REITs in Asia excluding Japan, transactions are slowly picking up, boosted in part by lower financing costs. Most of the S$3 billion ($2.2 billion) in deals announced since January happened in the third quarter, DBS Group Holdings Ltd. said in a note on Sept. 29 titled “S-REITs: Insatiable growth appetite.” It added that the market should keep improving through the rest of the year and start of 2021, and analyst Derek Tan expects more acquisitions as the coronavirus crisis dissipates over time.

MAS: Eagle Hospitality Must Change Manager

A Notice of Intention (NOI) to remove the manager of Eagle Hospitality Trust was issued by the Monetary Authority of Singapore (MAS) today.

MAS has serious concerns about the EH-REIT Mgt's ability and commitment to comply with MAS' rules and regulations. MAS therefore deems it necessary to direct DBS Trustee Limited to remove EH-REIT Mgt from managing EH-REIT and appoint a new manager.

MAS will announce its final decision after reviewing any written submissions from DBS Trustee Limited and EH-REIT Mgt, which will be given 10 business days to respond upon receipt of the NOI.

ARA LOGOS Makes Australian Acquisitions, Capital Increase

ARA LOGOS Logistics Trust (formerly know as Cache Logistics Trust) is announcing a large acquisition along with a capital increase effort.

Assets

The purchased assets are:

• 5 logistics properties around Brisbane, Queensland. Four are leasehold (and almost fully tenanted) and one is freehold (and vacant).
• A 49.5% stake in New LAIVS Fund, which owns 4 logistics properties (one leasehold, the rest freehold). Two are located around Sydney and two around Melbourne.
• A 40% stake in OP Fund, which owns a freehold cold storage property around Melbourne.

The transaction includes a pre-emptive right over balance stakes in both New LAIVS Fund and OP Fund.

Financing

The $404.4 million operation (which will need approval by vote at an EGM) will be financed by bank debt along with both a private placement and a non-renounceable preferential offering of new units to existing unit holders.

Expectations

After the operation and based on pro-forma comparison with the first semester of 2020, the trust expects a slight decrease of DPU and NAV, with an increase in gearing from 40.4% to 42.9%. Average portfolio WALE (based on NLA) will however be extended from 2.8 to 4.6 years.

Mapletree Logistics Acquires Portfolio of Asian Properties

Mapletree Logistics Trust plans to acquire a group of 9 properties across Asia (7 in China, 1 in Malaysia and 1 in Vietnam) as well as the remaining 50% stake in a portfolio of 15 Chinese properties. The aggregate transaction is done on a S$1.04 billion valuation.

Funding is done by a mix of debt and equity raise (private placement and preferential offering) and is expected to be DPU and NAV accretive.

CDL Hospitality Sells Brisbane Hotel

CDL Hospitality Trust is selling its Novotel Brisbane hotel, a freehold property with 296 rooms, for A$67.9 million.

Elite Commercial REIT Makes First Acquisition

Elite Commercial REIT is announcing it's first asset acquisition, a portfolio of 58 British properties sold by its sponsor for a total of £212.5 million. Primarily occupied by UK government entities, the fully-leased properties have a long WALE of 7.4 years and are mostly freehold.

Financing will be done through debt and the issuance of new units. The manager expects the operation be to DPU accretive.