SG property news

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MAS warns of risks over new property sales tactic where agents have been pitching to flat-owners to sell their HDB flat and use the proceeds to make down payments on two private condos under separate names, one for the family’s occupation and the other to be rented out. The value touted by property agents is that Additional Buyers Stamp Duty (ABSD) does not apply as each spouse holds only one property, and there is the possibility of positive cash flow if retirement CPF funds are used to fund payments, while the rental income covers the balance. The MAS warned of potential changes in the economic environment impacting the value of properties and mortgage servicing ability. (Source: The Business Times)

50% stake in Westfield Marion sold at 7.8% discount to book for A$680m by Lendlease’s managed fund APPF, according to the head of J.P. Morgan’s Australian REITs team, Richard Jones. The sale implies a cap rate of 5.5-5.6%, ~43bps above the previous book. Media reports, e.g. The Australian and AFR, had suggested that SPH REIT was in the lead to secure the interest. (Source: The Australian, J.P. Morgan)

Ascott Residence Trust (ART) has divested its entire 70% stake in Somerset West Lake Hanoi in Vietnam, at a consideration of S$13.7m. The agreed property value of S$18.5m compares against the last June-2019 valuation of S$13.3m. (Source: Ascott Residence Trust)

Ascott Residence Trust – Merger benefits coming soon. ART’s 3Q19 DPU rose 5% YoY to 1.91 Scts with 9M19 of 5.34 Scts (+7.0% YoY). This was in line with our and consensus estimates. 3Q19 DPU on a same store basis (excluding S$4m of capital distributions in 3Q19 and income in 3Q18 from Ascott Raffles Place Singapore which was sold earlier this year) would have risen by 1% YoY to 1.73 Scts which was also largely in line with our expectations. We maintain our OW rating and PT of S$1.45. We continue to like ART for the expected 2-3% DPU accretion and unlocking of value through asset recycling following the merger with ASCHT which is expected to complete by year end. (Source: Ascott Residence Trust, J.P. Morgan estimates)

CDL Hospitality Trusts – Drag from overseas operations. CDREIT reported a 4.1% YoY drop in 3Q19 DPU to 2.09 Scts. As a result, 9M19 DPU came in at 6.25 Scts (-3.7% YoY), which represents 70% and 68% of our and consensus DPU estimates. This is in line with our expectations, but below consensus estimates based on CDREIT’s typical seasonal split. While we expect RevPAR for the Singapore portfolio to improve by 1% next year on the back of an uplift from biannual conferences, this will be below market expectations of a 3-5% increase given our expectation of price competition from new serviced apartments with hotel licences. We reiterate our UW rating and PT of S$1.50. Link. (Source: CDL Hospitality Trusts, J.P. Morgan estimates)

Frasers Hospitality Trust’s (FHT) 4QFY19 DPU fell 4.1% due to fall in revenues and operating profit from its Australia portfolio amidst a challenging trading environment in Sydney and Melbourne (Source: The Business Times)

Guoco Group’s stake in GuocoLand (GUOL) increased by 0.11%pts to 66.8% after an off-market purchase of 1.3m shares in GUOL at S$2.05/sh. This follows the previous day’s announced off-market purchase of 17.1m shares by Guoco Group. (Source: GuocoLand)

Keppel DC REIT (KDCREIT) has incorporated a wholly-owned subsidiary in Singapore, KDCR Singapore, for the purpose of investment holding. (Source: Keppel DC REIT)

ParkwayLife REIT’s (PREIT) 3Q19 DPU rose 1.9% to 3.3 Scts. On the back of higher rent from its Singapore properties, appreciation of the JPY, and one-off insurance proceeds for the reimbursement of property repair expenses incurred by certain Japanese properties. (Source: ParkwayLife REIT, The Business Times)

Google is looking to lease the entire 202,000 sf, seven-story Sorting Office block under development in Dublin Docklands, The Irish Times reported. The Sorting Office is being developed by Marlet Property Group and Mapletree Investments had acquired the property for €240.0m in June. (Source: The Irish Times)

URA has launched a tender for a 99-year leasehold resi site at Irwell Bank Road in River Valley. The site can yield about 445 residential units (35,809 sqf GFA), with consultants expecting the top bid in the S$650-680m range (S$1,700-1,770 psf), similar to the S$1,732 psf for the Jiak Kim street site (Riviere), which was awarded to Frasers Property in December 2017. (Source: The Business Times)

Keppel DC REIT (KDCREIT) has completed the acquisition DC1 in Singapore, with S$203.9m of gross proceeds from the recent S$473.8m equity fund raising used to fund the acquisition. (Source: Keppel DC REIT)

Keppel Land invests US$25m in India-based coworking operator Smartworks Coworking Space, which provides flexible spaces for enterprise companies across 23 centres in nine major Indian cities. (Source: The Business Times)

Eagle Hospitality Trust has confirmed that Frank Yuan, the single largest shareholder of EHT, also sold to EAGLEHT’s sponsor six of the 18 hotels that eventually formed its IPO portfolio, according to The Business Times. However, there was no legal requirement to disclose the relationship as the seller, ASAP Holdings, had sold the six hotels to the sponsor’s founders, who subsequently injected them into EAGLEHT after. Frank Yuan is EAGLEHT’s largest shareholder and CEO of ASAP. Mr Yuan took a 16.2% stake in EAGLEHT via placement during the IPO, but has since pared his stake to 13.7% as of last Friday. (Source: The Business Times)

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