AIMS AMP Capital Industrial Trust - Waiting for Redevelopment Pipeline to Bear Fruits
- Quarterly DPU was diluted due to the private placement done in April this year. Fortunately, even with the dilution effect, DPU still remains decent as a result of positive rental reversions and full rental contributions from 20 Gul Way Phase 1.
- Gearing ratio is very healthy compared to its peers, at 25.4%. No refinancing need this year.
- Occupancy rate increased from 96.1% to 98% quarter-on-quarter. Only 3.6% of Net Lettable Area will expire next year, followed by 17.2% in 2015, 21.2% in 2016 and 22% in 2017. Reasonably well staggered, unlike Sabana REIT.
- 20 Gul Way Phase 2 already received TOP in May 2013, 7 months ahead of schedule and within budget. After a 2-month rent free period, rental payment will start in July 2013.
- Looking forward, redevelopment of 103 Defu Lane will be completed by mid-2014, while 20 Gul Way Phase 2E and Phase 3 will be completed by end-2014. If everything remains constant (no rights issues, no private placements, no financial crisis, no defaults of major tenants etc.), total DPU should be around 13.3 cents in 2015.
- The management is keen to acquire yield-accretive assets from its sponsor (AIMS AMP Capital) in Australia. The CEO cited 2 reasons - low interest rate and the weakening AUS$ against Sing$. I still prefer slow and steady organic growth instead of overpaying for new overseas assets in a rush. There are quite a few properties left in Singapore that have the potential to maximise their plot ratios. I do understand that it is impossible to redevelop every single property (even the CEO said so himself) and we need to wait for the master leases at these properties to expire first before redeveloping. This strategy may seems slower but I think it is more prudent.
CACHE Logistics Trust - Room for Growth
- Quarterly DPU increased by 8% year-on-year, mainly due to the new acquisition, 'Precise Two'.
- Occupancy rate remains at 100%. No renewal risk left in 2013.
- Gearing ratio remains healthy and conservative at 29%. Therefore, the management is actively looking for new acquisitions in Singapore, Malaysia and China. The sponsor, CWT/ C&P, also has a pipeline of quality assets.
- Enjoys Triple-Net master leases with built-in rental escalations.
- The master lease for Kim Heng Warehouse will expire in 2014. Management is exploring the possibility of redeveloping that property in order to maximise its plot ratio. Gross Floor Area can potentially increase from 54,000 square feet to 180,000 square feet.
Mapletree Industrial Trust - Leveraging on BTS Projects
- Quarterly DPU increased 7.5% year-on-year, mainly due to positive rental reversions of 1.7%.
- Occupancy rate remains high at 9.5%. Strong retention rate of 84% for the entire portfolio. MINT is offering tenants attractive longer-term leases with lower starting rent and staggered rental escalations. Management is also working actively to lease out the space left by Credit Suisse.
|Artist's impression of the KNS Building|
- AEIs at Woodlands Central and The Signature have been completed. AEI at Toa Payoh North 1 is on track for completion by end-2013, together with the BTS project (KNS Building) for Kullicke & Soffa.
|Artist's impression of the Equinix IBX data centre|
- The Equinix IBX (International Business Exchange) Data Centre, another BTS project, will be completed by end-2014. Equinix has already committed to a 20-year lease for the data centre. This is a good business because data consumption is increasing fast in Asia. Big Data and Cloud Computing are also becoming critical for MNCs.
- **It is interesting to note that during a recent interview with The Edge Singapore, the Chairman and CEO of Boustead Singapore, Mr Wong, said he regretted selling 4 industrial properties to Mapletree back in 2005. Now, these properties are part of MINT's portfolio. All I can say is, 'Boustead's loss is MIT's gain'. ^___^
Sabana REIT - Mitigating Renewal Risk
- Quarterly performance is largely in line with forecasts, so I am not going to elaborate on it.
- Instead, I would like to focus more on the renewal risk this year. Finally, the management provided some updates on lease renewals! The good news is, at least one master lease will be renewed. The contingency plan - in case the 4 remaining master leases are not renewed - is to convert the properties into multi-tenanted. However, there is no guarantee that the multi-tenanted buildings can attract new tenants by 4Q2013.