BHG Retail REIT (BMGU)

As at 2020 Second Quarter Financial Results (7 Aug 2020)

BHG Retail REIT is the first pure-play China retail REIT sponsored by an established PRC homegrown retail property operator (Beijing Hualian Department Store Co), listed on 11 Dec 2015. It has ownership/interest in 6 properties worth S$0.93 billion (RMB 4.7 billion) as at 30 Jun 2020.

Gross rental income
(by sector)
Percentage
Fashion39.4%
F&B22.3%
Supermarket18.6%
Services8.2%
Recreation5.8%
Lifestyle5.4%
Specialty Stores0.3%
Gross rental income
(by geographical location)
Percentage
China100%

Metrics2Q 20201Q 2020
Gearing Ratio
(Aggregate Leverage)
35.9%35.3%
Weighted Average Debt to Maturity
(Average Term to Maturity)
2.2 years2.2 years
Average Cost of Debt (p.a.)3.9%4.2%
Occupancy Rate92.9%94.7%
Weighted Average Lease Expiry
(by GRI)
3.7 years3.7 years
Top 10 tenants
(gross rental income)
24.4%(as at
31 Dec 19)
Top tenant
(gross rental income)
15.8%(as at
31 Dec 19)

1H 20201H 2019
MetricsS$ milS$ mil
Gross Revenue27.838.1
Property operating
expenses
(11.3)(12.9)
Net Property Income16.525.2
Distributable Income4.39.0
DPU0.89c2.08c

Changed to semi-annual reporting. No Q2 2020 comparison with Q2 2019.

PORTFOLIO

CHINA

PropertyNPI (%)Occupancy
2Q 2020
Occupancy
1Q 2020
Beijing
Wanliu
(60%)
58.893.795.0
Chengdu
Konggang
14.188.891.2
Hefei
Mengchenglu
10.389.992.0
Hefei
Changjiangxilu
6.890.094.3
Xining
Huayuan
5.9100.0100.0
Dalian
Jinsanjiao
4.1100.0100.0

PropertyValuation
(RMB m)

Jun-20
Valuation
(RMB m)

Dec-19
Leasehold
expiry
Beijing
Wanliu
(60%)
2,5022,50229 Aug 2044
Chengdu
Konggang
66266223 May 2047
Hefei
Mengchenglu
60360331 Aug 2044
Hefei
Changjiangxilu
49249230 Apr 2043
Xining
Huayuan
28028019 Aug 2048
Dalian
Jinsanjiao
16816827 Feb 2042

Potential pipeline projects from Sponsor

Acquisition pipeline of 12 properties under Right of first refusal with Sponsor.

Sasseur REIT (CRPU)

As at 2020 Second Quarter Financial Results (14 Aug 2020)

Sasseur REIT is the first listed outlet mall REIT in Asia, listed on 28 Mar 2018. It has ownership/interest in 4 properties worth S$1.6 billion (RMB 8.2 billion) as at 30 Jun 2020.

Gross rental income
(by sector)
Percentage
Fashion39.7%
International Brands21.3%
Sports15.8%
Shoe Wear5.5%
Children5.3%
Miscellaneous5.2%
F&B3.2%
Ad-hoc Outlet2.2%
Kids Amusement Park1.0%
Anchor Tenants0.4%
Lifestyle0.3%
Gross rental income
(by geographical location)
Percentage
China100%

Metrics2Q 20201Q 2020
Gearing Ratio
(Aggregate Leverage)
28.1%28.5%
Weighted Average Debt to Maturity
(Average Term to Maturity)
2.23 years2.49 years
Average Cost of Debt (p.a.)4.17%4.34%
Occupancy Rate93.6%94.8%
Weighted Average Lease Expiry
(by GRI)
0.8 years1.0 years
Top 10 tenants
(gross rental income)
18.0%(as at
31 Dec 19)
Top tenant
(gross rental income)
7.5%(as at
31 Dec 19)

WALE is low, as REIT deliberates short leases to optimise tenant mix. In conventional retail malls, the typical lease terms are 5 to 10 years for anchor tenants and 1 to 3 years for other tenants. Sasseur REIT however has intentionally opted for a shorter lease to

  • cease leases to under-performing brands more easily and replace them with brands that are better suited to changing consumers’ trends
  • renew leases more frequently at higher commission rates for brands that perform well

2Q 20202Q 20191H 20201H 2019
MetricsS$ milS$ milS$ milS$ mil
Gross Revenue28.029.153.260.0
Distributable Income18.219.234.238.9
DPU1.512c1.608c2.846c3.264c

PORTFOLIO

CHINA

PropertyNPI (%)Occupancy
2Q 2020
Occupancy
1Q 2020
Chongqing Outlets45.9100.0100.0
Bishan Outlets9.584.286.5
Hefei Outlets25.394.795.5
Kunming Outlets19.497.396.0

PropertyValuation
(RMB m)

Jun-20
Valuation
(RMB m)

Dec-19
Leasehold
expiry
Chongqing Outlets2,9732,9732047
Bishan Outlets8248242051
Hefei Outlets2,7952,7952053
Kunming Outlets1,6201,6202054

Potential pipeline projects from Sponsor

Acquisition pipeline of 9 properties under Right of first refusal with Sponsor.

Far East Hospitality Trust (Q5T)

As at 2020 Second Quarter Financial Results (23 July 2020)

Far East Hospitality Trust (FEHT) is the first and and only Singapore-focused hotel and serviced residence hospitality trust, listed on 27 Aug 2012. It has ownership/interest in 13 properties in Singapore, comprising 9 hotels and 4 serviced residences, worth S$2.65 billion as at 30 Jun 2020.

Gross rental income
(by sector)
Percentage
Hotels64.4%
Serviced Residences14.0%
Commercial21.6%
Gross rental income
(by geographical location)
Percentage
Singapore100%
Metrics2Q 20201Q 2020
Gearing Ratio
(Aggregate Leverage)
39.2%39.5%
Weighted Average Debt to Maturity
(Average Term to Maturity)
2.8 years3.0 years
Average Cost of Debt (p.a.)2.5%2.8%
Occupancy Rate77.6% (H)
82.7% (SR)
65.3% (H)
83.6% (SR)
Average Daily Rate$102 (H)
$200 (SR)
$144 (H)
$213 (SR)
Revenue Per Available Room$79 (H)
$166 (SR)
$94 (H)
$178 (SR)

2Q 20202Q 20191H 20201H 2019
MetricsS$ milS$ milS$ milS$ mil
Gross Revenue21.427.944.355.7
Property operating
expenses
(2.7)(1.5)(5.7)(5.5)
Net Property Income18.729.438.650.2
Distributable Income7.517.620.235.0
DPU(semi-
annual)
(semi-
annual)
1.03c1.82c

PORTFOLIO

SINGAPORE

Hotels:

PropertyNPI (%)Valuation
($m) Jun-20
Valuation
($m) Dec-19
Leasehold
expiry
Village Hotel
Albert Court
4.9127.8127.827 Aug 2087
Village Hotel
Changi
8.2205.8205.827 Aug 2077
The Elizabeth
Hotel
5.2163.7163.727 Aug 2087
Village Hotel
Bugis
10.0232.7232.727 Aug 2078
Oasia
Hotel Novena
11.0330.0330.027 Aug 2104
Orchard
Rendezvous
Hotel
18.3431.2431.227 Aug 2062
The
Quincy Hotel
2.682.082.027 Aug 2087
Rendezvous
Hotel
Singapore
10.5284.1284.11 Aug 2083
Oasia Hotel
Downtown
10.2245.0245.02 Apr 2083

Serviced Residences

PropertyNPI (%)Valuation
($m) Jun-20
Valuation
($m) Dec-19
Leasehold
expiry
Village Residence
Clarke Quay
7.6205.9205.927 Aug 2092
Village Residence
Hougang
2.162.062.027 Aug 2093
Village Residence
Robertson Quay
4.0105.3105.327 Aug 2090
Regency
House
5.4170.2170.227 Aug 2093

Potential pipeline projects from Sponsor

  • Acquisition pipeline of 7 properties (1,200 hotel rooms and 618 serviced residence units) under Right of first refusal with Sponsor.
  • 30% stake in a joint venture in development of three hotels in Sentosa with Sponsor which opened in 2019.

Powerhouse Sponsor Mapletree

Besides CapitaLand (C31) leading strong REITs as a strong Sponsor, Mapletree Investment is also another powerhouse Sponsor. Mapletree Investments (or just Mapletree) is not listed on SGX however — it is 100% owned by Temasek Holdings.

Mapletree has assets under management (AUM) global portfolio (S$60.5 billion as at 31 Mar 2020) which focuses largely on logistics, industrial, data centres, office space, student accommodations and corporate housing. The growth from the previous year of S$55.7 billion was mainly attributable to the growing presence in US and Europe.

Logistics and data centres form approximately 35% of portfolio AUM, a significant proportion which is relatively less affected by the current COVID-19 pandemic in terms of profitability.

While Singapore and Asia remains focused as its core markets, it continues to expand its presence across 13 markets, namely Singapore, Australia, Canada, China, Europe, Hong Kong SAR, India, Japan, Malaysia, South Korea, the UK, the US and Vietnam.

Mapletree manages, in addition to 6 private funds, 4 Singapore-listed REITs.

REITOwnership /
interest
Country of
operation
Valuation
(S$bil)
Mapletree Logistics Trust30%Singapore,
Australia,
China,
HK SAR,
Japan,
Malaysia,
South Korea,
Vietnam
4.6
Mapletree Industrial Trust29%Singapore,
North America
3.6
Mapletree Commercial Trust32%Singapore5.8
Mapletree North Asia
Commercial Trust
36%China,
HK SAR,
Japan
4.7

3 of the 4 REITs are in the top 6 in terms of market capitalisation in Singapore. 2 of the REITs (MLT and MCT) are also constituents in the Straits Times Index (STI).

Comparing the NAV/unit versus the current share price, the undervaluation might provide opportunity for investment, as the REITs make a slow recover due to COVID-19 in the hospitality and retail sectors.

REITNAV/unit as
at Q2 2020
Share Price as
at 20 Aug 20
Mapletree Logistics TrustS$1.22S$2.07
Mapletree Industrial TrustS$1.62S$3.12
Mapletree Commercial TrustS$1.75S$1.89
Mapletree North Asia
Commercial Trust
S$1.41S$0.90

Mapletree Group CEO Hiew Yoon Khong had said during an interview reported in The Business Times (17 Jun 2019) that “the company prefers to raise funds for acquisitions by selling assets, rather than through bank loans or issuing bonds”. With the Right of first refusal over Sponsor’s assets for its REITs, we can be certain of the continued pipeline of relevant assets to be injected in future for the Sponsor to continue focusing on its objective of delivering consistently high returns by maximising capital efficiency.

In 2019 and 2020,

  • MCT Trust acquired MBC II from Mapletree at S$1.55 billion. 
  • MLT acquired seven logistics properties across Malaysia, Vietnam and China from Mapletree at S$411.8 million
  • MNACT acquired two office buildings in Japan from Mapletree at about S$480 million.  
  • MIT acquired remaining 60% stake in 14 data centres from Mapletree at US$210.9 million.

What is also interesting to note in the next 5 years is that Mapletree plans to list two REITs (IPO of about S$2 billion each) backed by overseas assets in student accommodation and logistics. This looks promising considering the untapped assets it has in these 2 areas.

Mapletree North Asia Commercial Trust (RW0U)

As at 2020 First Quarter Financial Results (27 July 2020)

Mapletree North Asia Commercial Trust (MNACT) is Singapore’s first commercial REIT with properties in China, Hong Kong SAR and Japan, listed on 7 Mar 2013. It has ownership/interest in 2 properties in China, 1 in Hong Kong SAR and 8 in Japan worth S$8.3 billion as at 30 Jun 2020.

Gross rental income
(by sector)
Percentage
Office60%
Retail40%
Gross rental income
(by geographical location)
Percentage
China28%
Hong Kong SAR46%
Japan26%

Metrics1Q 20204Q 2019
Gearing Ratio
(Aggregate Leverage)
39.6%39.3%
Weighted Average Debt to Maturity
(Average Term to Maturity)
3.05 years3.35 years
Average Cost of Debt (p.a.)2.17%2.33%
Occupancy Rate96.4%95.2%
Weighted Average Lease Expiry
(by GRI)
2.6 years2.7 years
Top 10 tenants
(gross rental income)
35.4%36.1%
Top tenant
(gross rental income)
7.4%7.4%

1Q 20201Q 2019
MetricsS$ milS$ mil
Gross Revenue93.7104.9
Property operating
expenses
(25.2)(19.8)
Net Property Income68.585.1
Distributable Income
(change to
half-annual)
62.0
DPU
(change to
half-annual)
1.95c

PORTFOLIO

CHINA

PropertyNPI (%)Occupancy
1Q 2020
Occupancy
4Q 2019
Cap rate
Gateway Plaza
(Beijing)
22.091.491.55.50
Sandhill Plaza
(Shanghai)
9.096.398.05.00

For Cap rate, (O) = Office, (R) = Retail, (H) = Hotel

PropertyValuation
($m) Jun-20
Valuation
($m) Dec-19
Leasehold
expiry
Gateway Plaza
(Beijing)
1,3681,38525 Feb 2053
Sandhill Plaza
(Shanghai)
4844753 Feb 2060

Hong Kong SAR

PropertyNPI (%)Occupancy
1Q 2020
Occupancy
4Q 2019
Cap rate
Festival Walk46.099.399.84.15

PropertyValuation
($m) Jun-20
Valuation
($m) Dec-19
Leasehold
expiry
Festival Walk5,0904,96730 Jun 2047

Japan

PropertyNPI (%)Occupancy
1Q 2020
Occupancy
4Q 2019
Cap rate
ALL23.097.794.74.10 –
4.70

PropertyValuation
($m) Jun-20
Valuation
($m) Dec-19
Leasehold
expiry
IXINAL Monzen-nakacho
Building (MON)
110106Freehold
Higashi-nihonbashi 1-
chome Building (HNB)
3226Freehold
TS Ikebukuro Building
(TSI)
7264Freehold
Omori Prime Building
(Omori)
96(new)Freehold
ABAS Shin-Yokohama
Building (ASY)
3833Freehold
SII Makuhari Building
(SMB)
370325Freehold
Fujitsu Makuhari
Building (FJM)
259228Freehold
mBAY POINT Makuhari
(MBP)
428(new)Freehold