S-REITs - Week 30 - 2024

24 July -  MAS Proposes to Impose Minimum Interest Coverage of 1.5times on All REITs

• MAS proposes that a minimum ICR of 1.5 times apply to all REITs. This underscores the responsibility of REIT managers in ensuring that REITs can adequately meet their interest payments. The proposed threshold is set at 1.5 times as it will now be applied at all times to all REITs. Currently, the ICR requirement of 2.5 times is to be met only by REITs which intend to increase their aggregate leverage from 45% to 50%. 
  
  
• The ICR and aggregate leverage work complementarily to indicate a REIT’s financial strength. To simplify the requirements, MAS proposes that a single aggregate leverage limit of 50% apply to all REITs going forward.  A leverage limit of 50%, together with the ICR floor, will continue to foster prudent borrowing by REITs.
  
  
• To provide investors with information on how a REIT’s credit profile could be affected by changes in market conditions, MAS proposes that REITs perform and disclose sensitivity analyses on the impact of changes in EBITDA and interest rates on REITs’ ICRs. This disclosure is to be made in their interim financial results and annual reports. 
  
  
• MAS invites views and suggestions from interested parties on the proposals set out in this consultation paper.

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( YTD: -49.07% | 5D: +13.02%)

22 July - Loan Facility obtained by Keppel Pacific Oak US REIT

• Perpetual (Asia) Limited (“PAL”) (in its capacity as trustee of Keppel Pacific Oak US REIT) has on 19 July 2024 secured an option to extend a US$115,000,000 unsecured term loan facility for a period of 12 months from the maturity date; and
  
  
• PAL (in its capacity as trustee of Keppel Pacific Oak US REIT) (the “Borrower”) has obtained the Loan Facility (as defined below) pursuant to a facility agreement dated 19 July 2024 (the “Facility Agreement”).

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( YTD: -3.77% | 5D: +2.00%)

23 July - 1H2024 Key results highlight

• Successive positive rental reversion of 16.8% in 1H 2024 and 8.8% in 2Q 2024, marking our 14th consecutive quarter with positive rental reversion
  
  
• Net property income in 1H 2024 unchanged from a year ago at $27.2 million
  
  
• Successful issuance of $100 million 5-year 4.15% sustainability-linked bonds due 2029
  
  
• Proactive capital management with majority of the REIT’s financing being sustainability-linked
  
  
• Increased portfolio valuation to $914.5m as at 30 June 2024 compared to $903.9m as at 31 December 2023
  
  
• Completion of asset enhancement initiative (“AEI”) at Sabana@1TA4
  
  
• 33 & 35 Penjuru Lane master lease termination
  
  
• 30 & 32 Tuas Avenue 8 master lease termination

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( YTD: -12.40% | 5D: -11.72%)

24 July - 1H2024 Key results highlight

• In Frankfurt, we signed several new leases during the second quarter, generating 630 basis points of positive net absorption, and leasing up substantially all the remaining vacancy on the Frankfurt campus.
  
• THE REIT previously announced that they renewed the lease agreements with both anchor customers on the Frankfurt campus, a AAA-flat and a AA-plus cloud provider, for five years of additional term at a positive 2.0% cash rental reversion, significantly enhancing the duration and stability of this high-quality cash flow stream.
  
  
• In early January, the REIT terminated their second-largest customer’s lease in Frankfurt as part of the broader transaction to resolve their bankruptcy. They expected to retain the majority of the existing end- user customers, and to crystallise value by re-leasing this capacity at favorable terms. The REIT is pleased to report that they have retained all the end- user customers, significantly outperforming their underwriting.
  
  
• The REIT is currently in active negotiations to renew all the leases expiring across their portfolio over the next 12 months, except for a 10-megawatt, fully-fitted facility in Northern Virginia

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( YTD: -24.42% | 5D: -4.41%)

24 July - 1Q2024 Key results highlight

• Financial Performance
  > Gross Revenue: $181.7m (-0.3% y-o-y)
  > NPI: $156.7m (-0.9% y-o-y)
  > DPU: 2.068 cents (-8.9% y-o-y)
  
  
• Asset Management
  > Portfolio Occupancy: 95.7% (4Q FY23/24: 96.0%)
  > Average Rental Reversion: +2.6% (4Q FY23/24: +2.9%)
  > WALE: 2.9 years (4Q FY23/24: 3.0 years)
  
  
• Capital Management
  > Aggregate Leverage: 39.6% (4Q FY23/24: 38.9%)
  > Debt hedged into fixed rates: 83% (4Q FY23/24: 84%)
  > Average Debt Maturity: 3.7 years (4Q FY23/24: 3.8 years)
  > Income hedged for next 12 months: 78% (4Q FY23/24: 78%)

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( YTD: -2.65% | 5D: +0.46%)

24 July - Business Updates for the third quarter ended 30 June 2024

• Business Operation
  > Portfolio Occupancy: 99.7% (2Q24 : 99.9%)
  > Shopper Traffic and Tenants: 4.1%(Shopper Traffic) | 0.7% (Tenants' Sales)
  
  
• Financial Position
  > Aggregate Leverage: 39.1% (2Q24 : 38.5%)
  > Average cost of Debt: 4.1% (2Q24: 4.1%)
  

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( YTD: -9.56% | 5D: -0.87%)

25 July - 1QFY2024/2025 Financial Results

• Performance primarily driven by revenue contribution from Osaka Data Centre, new leases and renewals and higher distribution declared by joint venture
  
  
• Average Overall Portfolio occupancy increased q-o-q from 91.4% to 91.9% due to new lease at 402 Franklin Road, Brentwood
  
  
• Completed Phase 3 fit out works for Osaka Data Centre on 25 Jun 2024
  
  
• Resumption of the distribution reinvestment plan for financial flexibility

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( YTD: -9.09% | 5D: +0.00%)

26 July - 1H FY2024 Financial Results

• 1H 2024 revenue and gross profit increased 11% and 12% y-o-y respectively on stronger performance and contribution from new properties, partially offset by divestments and foreign exchange impact
  
  
• On a same-store basis, excluding acquisitions and divestments2 between 1H 2023 and 1H 2024, gross profit was 3% higher y-o-y due to stronger operating performance
  
  
• Total distribution was stable y-o-y; excluding non-periodic items, adjusted total distribution was 8% higher
  
  
• DPS was 8% lower y-o-y; excluding non-periodic items, adjusted DPS was relatively stable

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( YTD: -2.56% | 5D: -2.06%)

26 July - 1H FY2024 Financial Results

• Financials
  > 1H 2024 DPU1: 4.549 cents
  > Robust financial position; agile financial strategies to support future growth
  > Renewed major contract in Singapore with positive reversion of >40%
  
  
• Portfolio Management
  > Portfolio Occupancy: 97.5%
  > WALE: 6.4 years by lettable area 
  
  
• Value Creation
  > Divestment of Intellicentre Campus at attractive exit cap rate of ~3.6%
  > Australia Data Centre Note investment; initial yield ~7% with annual CPI-linked escalation
  > AMaiden foray into Japan with accretive acquisition of Tokyo Data Centre 

For more information, please click here

( YTD: -3.77% | 5D: +2.00%)

26 July - 1H FY2024 Financial Results

• In local currency terms, Rental and Other Income increased 4.4% Y-O-Y for properties in Indonesia, and 2.0% Y-O-Y for nursing homes in Singapore, while nursing homes in Japan remained stable
  
  
• 1H 2024 DPU of 1.20 Singapore cents is lower Y-O-Y due to currency translation impact
  
  
• Overall financial position remains resilient with a gearing ratio of 39.5% and 86.6% of debt on fixed rates or hedged

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( YTD: -14.68% | 5D: +18.47%)

23 July - Exercise And Completion Of Extension Option For Credit Facility Secured On Sorrento Towers

• Prime US REIT Management Pte. Ltd., as manager of Prime US REIT (“PRIME”, and the manager of PRIME, the “Manager”), refers to PRIME’s existing term loan and revolving credit facility that is secured by Sorrento Towers (the “Facility”), which has an initial maturity date of 22 July 2024.
  
  
• The Facility has two (2) one-year extension options available to PRIME, with the fully extended maturity date being 22 July 2026. The Manager has opted to exercise the first extension option to extend the maturity date to 22 July 2025 and the extension is completed today.
  
  
• The committed Facility amount is US$72,150,000, comprising US$69,900,000 non-revolving portion which was drawn, and US$2,250,000 revolving portion which is undrawn.

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( YTD: +0.00% | 5D: -5.00%)

24 July - 1H FY2024 Financial Results

• Revenue and net property income increased by 5.7% and 1.6% YoY to S$146.7 million and S$117.1 million, respectively, mainly driven by higher contribution from the hospitality segment, and the stable performance of Singapore commercial properties
  
  
• Singapore office properties achieved positive rental reversions of 11.7% in the second quarter of 2024, with committed occupancies inching up to 95.2% as of 30 June 2024
  
  
• Hospitality segment RevPAR increased by 15.8% YoY to S$269 in 1H 2024
  
  
• Only 14.4% of total debt due in 2025
  
  
• Aggregate leverage decreased to 38.7% with well-spread out debt maturity profile at 2.7 years

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( YTD: -4.07% | 5D: +0.85%)

24 July - 1H FY2024 Financial Results

• Distributable income from operations of $88.7 million for the period from 1 January to 30 June 2024 (“1H 24”), in line with the half year ended 30 June 2023 (“1H 23”).
  
  
• Distribution per unit (“DPU”) from operations of 3.042 cents to unitholders was 1.2% lower year-on-year. With the absence of capital distribution in 1H 24, DPU declined 12.5% year-on-year.
  
  
• Suntec REIT had divested $31.5 million of strata units at Suntec City Office Towers at an average price of 27% above book value. The proceeds will be used to pare down debts.

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( YTD: -2.45% | 5D: -2.19%)

24 July - 1H FY2024 Financial Results

• Distribution per unit (“DPU”) rises on the back of higher distributable income from Singapore hospitals and some Japanese nursing homes with step-up lease arrangements and contribution from the properties acquired in 2023.
  
  
• Sustained strength in balance sheet and capital structure, healthy gearing level of 35.3%, all-in cost of debt at a low 1.35%, and no debt refinancing needs till March 2025.
  
  
• Overall, distributable income to unitholders grew by 3.5% to S$45.6 million in 1H 2024, as compared to S$44.1 million in the corresponding period a year ago.
  
  
• The Group’s distribution yield based on closing market price of S$3.50 as at 28 June 2024 has also increased to 4.31% from 4.16% a year ago. 

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