REIT Oracle

Mapletree Logistics Sells 5 Japanese Properties

Mapletree Logistics Trust keeps cycling its portfolio by divesting from 5 warehouses in Japan:

After evaluating all viable options and taking into consideration the Properties' olderwarehouse building specifications, limited future income growth and lack of redevelopment potential, the Manager assessed that divesting the Properties at the offered price would be desirable in the interests of MLT's unitholders

The transaction of a total of S$213.3 million is 21% above the latest appraised value of the properties.

OUE Commercial & OUE Hospitality Considering Merger

Following on the merger of ESR with Viva Industrial Trust, another consolidation could be in the work in the world of Singapore's REIT as OUE Hospitality and OUE Commercial Trust (both sponsored by the Lippo Group) are now in merger talks according to a report by the Wall Street Journal:

Under the proposed merger, OUE Commercial REIT will acquire all of OUE Hospitality’s securities in a cash and share deal. For each OUE Hospitality unit, holders will receive S$0.04075 in cash and 1.3583 new units of OUE Commercial REIT.

Keppel REIT Issues 5-Year Convertible Bond

Keppel REIT is making a S$200 million bonds offering. The security is a senior, unsecured convertible bond with a 5 year maturity and a conversion price of S$1.4625, about 12% above the current trading price. Priced at 100%, the interest rate is set at 1.90%.

Noteholders have a put option after three years to require early redemption of the bonds. After three years, Keppel Reit also has a call option to force early redemption of the bonds, subject to the common units trading at least 30 per cent over the prevailing conversion price.

Frasers Logistics Sells Australian Asset

Frasers Logistics Trust is divesting from an industrial facility located near Melbourne, Australia. The transaction of S$16.64 million is 13.1% over its book value.

Robert Wallace, CEO of Frasers Logistics & Industrial Asset Management, said, “63-79 South Park Drive is an older, non-core manufacturing-suited facility with an imminent lease expiry. The proposed sale of the Property is timely and in line with our proactive asset management and portfolio rebalancing strategies.”

CapitaLand Retail China Trust Divests From CapitaMall Wuhu

CapitaLand Retail China Trust and it's sponsor CapitaLand are both selling their stake in the company that owns CapitaMall Wuhu, in China.

The divestment of CapitaMall Wuhu is expected to be completed in 2H 2019. Following the divestment, CRCT's portfolio will have 10 malls in seven Chinese cities, while CapitaLand's retail network in China will comprise 51 malls in 21 cities.

Sale Cancelled for Sabana REIT

The plan by Sabana REIT to divest of an industrial property in Tuas, Singapore has been called off as the trust has not obtained approval from JTC.

In September 2018, Sabana had proposed to sell the building at 1 Tuas Avenue 4 for S$11.18 million in cash, 52 per cent below the property's book value of S$23.3 million as at June 30.

Lendlease REIT in the Work

It is reported that the developer LendLease group, listed in Australia, is eyeing the listing of a REIT in Singapore to offload some of its properties:

Citing people with knowledge of the transaction, the online article published today said the group is planning to raise up to US$500 million, or $675.3 million, from the listing.

The group itself, however, has yet to make any announcements on the ASX nor via its website as at the time of writing.

Lippo Malls Makes Jakarta Acquisition

Lippo Malls (LMIRT) is planning to acquire a new property from its sponsor, the Lippo Mall Puri, for the sum of S$354.7 million (or 3.70 trillion Indonesian rupiah).

As at Dec 31, 2018, the mall has an occupancy rate of 89.6 per cent, with 324 tenants ranging from retail, dining, entertainment and leisure options. They include brands such as Cinema XXI, Matahari, Parkson and Time Zone, and over 100 renowned international brands such as adidas, Best Denki, H&M, Marks & Spencer, Uniqlo and Zara.

The large size of the purchase will make the assets size of the trust increase by 19%, which means a private or public right issue is likely during the 2019 year.

ESR-REIT Coud Suffer From Hyflux Troubles

The difficulties met by water processing company Hyflux could impact ESR-REIT bottom line:

Hyflux is one of ESR-REIT’s top-10 tenants by rental income and income from the property accounted for 3.5% of rental income in December 2018.

Assuming a worst-case scenario wherein Hyflux is unable to fulfil its rental obligations, the REITs are unable to lease out space in the most recent financial year, and the full amount of the security deposit was drawn down for rental, ESR-REIT would suffer a 5.4% drop in annualised Q4 2018 distribution per unit.

Frasers Centrepoint Trust Gets a Slice of PGIM Real Estate Fund

Frasers Centrepoint Trust (FCT) will purchase a 17.1% stake in unlisted PGIM Real Estate Fund for S$342.5 millions:

FCT's manager said that the open-end fund is the largest non-listed retail mall fund in Singapore. It owns and manages six retail malls in Singapore - Tiong Bahru Plaza, White Sands, Liang Court, Hougang Mall, Century Square and Tampines 1 - and office property Central Plaza, as well as four retail malls in Malaysia.