REIT Oracle

Reits' Asset Injections: A Little Less Action a Little More Discretion, Please

The Business Times publishes an editorial regarding the recent wave of rights-issue that has dismayed Singapore's REIT shareholders.

Recent cash calls by OUE Commercial Reit, Keppel-KBS US Reit and Cromwell European Reit have all drawn negative market reactions. As one market watcher whispered in passing: You never know who's next.

Indeed, Reits have always relied on equity dilution or new debt to fund acquisitions, since the law requires them to distribute at least 90 per cent of income to enjoy tax benefits.

Keppel REIT Sells 20% Share of Ocean Financial Centre

Keppel REIT is selling a 20% stake of the Ocean Financial Centre to Allianz Real Estate for a sum of S$537.3 million. This is 16.8% higher than its original purchase price and will leave Keppel REIT with a 79.9% ownership of the property.

Ascendas Hospitality Acquires Seoul Property

Ascendas Hospitality Trust is acquiring the Ibis Ambassador Seoul Insadong, in South Korea, for about S$94.5 million. The freehold asset is a 363 rooms hotel built in 2013 leased by the Ambassador Hotel Group, with a 20 years tenor starting in 2013.

The purchase is intended to be funded by dept and be DPS accretive.

Keppel-KBS Acquires Another Florida Office Building

Keppel-KBS US REIT continues its buying spree with the purchase for US$48.5 million of an office property in Maitland, near Orlando, Florida. Named Maitland Promenade I, the asset is adjacent to Maitland Promenade II that the trust already owns. With a net lettable area of 230,371 m², the property has a 98.1% committed occupancy rate.

As financing is expected to be done by debt, the manager expects the transaction to increase DPU.

Lippo Related REITs Fall Sharply on Sponsor's Woes

Both Lippo Malls Indonesia REIT and First REIT are falling sharply today as investors worry about their sponsor and parent Lippo Karawaci debt situation. The Indonesian group has seen debt downgrades by rating agencies, with Fitch lowering the group recently from B to CCC+. Investors are concerned some its assets could be offloaded to both trusts, which would then be forced to make diluting capital increase. Lippo Karawaci is also a key tenant of First REIT, creating an extra amount of uncertainty for the trust shareholders.

Ascendas-Singbridge Considering New REIT IPO

Ascendas-Singbridge Group, jointly owned by sovereign funds Temasek and public company JTC Corp, is considering floating a new REIT comprised of 33 office properties in the USA. The IPO could raise US$500M and start as early as the first quarter of 2019.

Mapletree Logistics Acquires South-Korean Property

Mapletree Logistics Trust has announced the acquisition of Wonjin Logistics Centre, in Gyeonggi-do, South Korea, for KRW37.85 billion.

Located near Seoul, the two blocks property built in 2007 and 2018 has a gross floor area of 29,325 m². It is fully leased with a WALE of 4.3 year (by Net Lettable Area) and a Net Property Income yield of about 6.5% based on the transaction price.

The purchase will be funded by debt, which upon completion of the transaction will set the gearing ratio to about 39.2%.

BHG Retail Plans to Acquire Mall

BHG Retail REIT has agreed to purchase Hefei Changjiangxilu Mall in China for 328.3 million Yuan, or S$ 65.2 million. The leasehold property, completed in 2010, has a Net Lettable Area of 27,221 m² and an occupancy rate of 99.4%. Anchor tenants include BHG Supermarket, KFC, Pizza Hut as well as a movie theater.

The manager, which expects the purchase to be DPU and NAV accretive, plans to finance the acquisition through debt, increasing the leverage to 37% by the end of the year. The approval of unitholders will be required for the transaction to go through.

Mapletree Logistics Acquires Vietnam Property

Mapletree Logistics Trust announces the acquisition from Unilever of a 66,800 m² warehouse in Binh Duong province, Vietnam for a price of about S$43 million. The property will be leased back to Unilever Vietnam for 10 years.

Upon completion of the acquisition, the trust gearing will reach 38.9%.

Frasers Logistics Acquires Dutch Property

Frasers Logistics Trust is buying its 22nd property in Europe with the acquisition of a logistics property in the Netherland for a price of 25.36 € million.

Located in Meppel, the freehold property of 31,013 m² is currently fully leased by FrieslandCampina with a long WALE of about 14.9 years.