REIT Oracle

Frasers Centrepoint Buys Stake in Nex Mall, Singapore

Frasers Property and Frasers Centrepoint Trust have agreed to jointly acquire a 50% stake in Nex Mall, Singapore, for a purchase consideration of S$652.5 million:

NEX is located within the Serangoon housing estate which has an estimated resident population of 68,800 with 21,634 Housing Development Board (HDB) flats in the area. NEX is the largest suburban retail mall in Northeast Singapore with total net lettable area of approximately 634,631 square feet spread over seven retail levels, including two basement levels, and the committed occupancy was 99.9% as at end-November 2022.

The property sits on a leasehold land plot, with 85 years remaining on the lease.

Partial Offer on Sabana REIT at S$0.465 Per Unit

A substantial shareholder of Sabana REIT, Swiss group Volare, is trying to increase its stake in the trust and making an offer to acquire 10% of the capital at S$0.465:

The offer price represents a premium of 9.4 per cent over the volume-weighted average price on Jan 20; it is also respectively 8.6 per cent, 9.7 per cent and 6.9 per cent over the volume-weighted average price during the one, two and six-month periods preceding Jan 20.

CapitaLand India Buys IT Park in Bangalore

CapitaLand India Trust (CLINT) is not done with its buying spree and now announces the purchase of part of an IT park project on the Outing Ring road of Bangalore, India. The property will be built on a 5.3 acres freehold plot with 2 buildings, the larger one (about a million square feet) being completed in 2025 and acquired in 2027 by CLINT, while the other one (about 0.5 million square feet) will go to the landowners.

CLINT will provide total funding for the development of up to INR8,684 million (or about S$142.4 million towards the project), with a projected total purchase price expected to be INR12,261 million (or about S$201.0 million).

Pro-forma, the operation is expected to be NAV and DPU accretive.

Mapletree Logistics Sells Two Malaysian Properties

Mapletree Logistics Trust is divesting of two warehouse in Malaysia for RM50.2 million, or 6.1% over the latest valuation as of October 1st 2022:

Subang 1 is a 16-year old warehouse located in Subang while Chee Wah is a 18-year old warehouse located in Puchong, with gross floor area of 12,873 square metres (“sqm”) and 7,705 sqm respectively. Both properties are single-storey warehouses with limited redevelopment potential.

ARA Hospitality Buys Service Residence Property in Colorado Springs

ARA US Hospitality Trust is announcing the acquisition of service residence Home2 Suites by Hilton Colorado Springs South for a total cost of about US$30.0 million:

The Property is a recently-built select-service, extended-stay hotel with 119 rooms located at 1235 Tenderfoot Hill Road, Colorado Springs, Colorado 80906. Colorado Springs is at the center of the Rocky Mountain recreation activities and is a popular tourist attraction. In addition, it is a strong base for prominent U.S. aerospace and military establishments as well as higher education institutions. The growing sports and high-technology industries also offer strong support to the expanding sub-market.

The purchase is expected to be DPU accretive.

Starhill Global Sells Tokyo Property

Starhill Global REIT is announcing the divestment of Daikanyama, a 3 storey commercial building in Tokyo, for ¥1,877.7 million (approximately S$18.91 million):

This translates to a 39.1% and 2.9% premium over the latest valuation and acquisition price of the Property respectively. The transacted price translates to a yield of 2.77%.

Manulife US REIT Close to Leverage Limit

Manulife US REIT, suffering from the drop in value of its portfolio, is seeing its aggregate leverage inching closer to the regulatory limit of 50%. The trust, which is now doing a strategic review, is publishing an update on the issue:

Manulife US REIT’s expected aggregate leverage will be approximately 49% (taking into account additional borrowings, fair value changes in investment properties and certain projections in the value of other total assets from 30 June 2022 to 31 December 2022), while its projected interest coverage ratio as at 31 December 2022 will be approximately 3.1 times. Accordingly, the aggregate leverage of Manulife US REIT is within the regulatory 50% limit under Appendix 6 to the Code on Collective Investment Schemes

For the avoidance of doubt, the financial covenants in respect of the existing loans of Manulife US REIT are not expected to be breached despite the decline in valuation.

The blog Investment Moats has published an in depth discussion on the issue as well.

CLINT Buys IT Business Park From Sponsor

CapitaLand India Trust is announcing the acquisition of International Tech Park Pune – Hinjawad from its sponsor for about S$221.9 million. The sponsor will be paid partially with S$25.0 million worth of new units of the trust.

The property, which has four buildings, sits on leasehold land (with 95 years remaining) and is fully occupied with a WALE of 3.4 years.

The manager expects the operation to be DPU accretive.

SPH REIT Renamed to Paragon REIT

SPH REIT will be renamed, starting from the 3rd of January, to Paragon REIT. The stock ticker remained unchanged.

Mapletree Logistics Selling Singapore Property

Mapletree Logistics Trust is proposing the sale of its property at 3 Changi South Lane (Singapore) for the price of S$22.0 million:

The proposed sale price represents a 39.2% premium to the Property’s latest valuation of S$15.8 million as at 1 October 2022. The Manager plans to distribute any divestment gain from the transaction to Unitholders, after taking into account all relevant costs and expenses, while the capital released may be used to fund committed investments and/or reduce debt.