汇丰银行-亚洲-房地产行业-新加坡REITs：安全是有代价的-2019.5-21页.pdf

Disclosures&Disclaimer This report must be read with the disclosures and the analyst certifications in the Disclosure appendix,and with the Disclaimer,which forms part of it.MCI(P)065/01/2019 MCI(P)008/02/2019 Issuer of report:The Hongkong and Shanghai Banking Corporation Limited,Singapore Branch View HSBC Global Research at:https:/ Sectors safe haven appeal is reflected in its valuation Our property sector views remain unchanged Stay selective.Preferred ideas KREIT,SUN and FEHT Sectors safe haven appeal is reflected in its valuation.After outperforming the broad market(as represented by FSSTI STI Index)in eight out of the past nine years on a total returns basis,the SREIT sector(as represented by FSTREI SREIT Index)has continued its outperformance y-t-d.However,this has moderated the prospective upside the sector offers.While its safe haven status may continue to appeal to investors,various valuation metrics such as DPU yield(5.3%vs.historic average:5.7%),PBV(1.16x vs.historic average:1.06x)and spreads over 10-year government bond yields(320bp vs.historic average:350bp),suggest the SREIT sector is well-owned,making it harder for investors to find value.Also,our proprietary indicator of forward looking returns suggests that the sector is over-bought.Incremental demand will be matched against capital raising activity.Investor expectations of 10-year government bond yields and shifts in such expectations have had an inverse relationship with SREIT performance in the past.Our rates strategists expect the SG 10-year government bond yield at 1.95%by end-2019(18 April 2019:Asia-Pacific Rates Polls and fiscal goals),which is 20bps lower than the current yield of 2.15%.Judging by the tighter than historical average dividend yield spread of 320bps(vs.350bps historically),the sectors recent strength could in part be attributed to lower bond yield expectations in our view.Incremental demand,however,is likely to be matched against elevated capital raising activity(the sector has raised cSGD9bn in equity capital over the past 2 years,averaging cSGD375m per month).Our property sector views remain unchanged.Divergences in opinion on the property market remain narrow and our views remain unchanged.Medium-term,there could be some grounds for incremental enthusiasm.Prospects for hospitality could improve on the back of a renewed push by the government to boost tourism.For the office sector,incentives to redevelop older office assets could be a positive,though we remain more guarded in our optimism here as the extent to which developers and landlords may deem these incentives as attractive remains unclear.Stay selective.Preferred ideas KREIT,SUN and FEHT.Given valuations,we advocate investors stay selective.Our preferred ideas are Keppel REIT(KREIT SP,Buy,CMP:SGD1.23,TP:SGD1.35),Suntec REIT(SUN SP,Buy,CMP:SGD1.79,TP:SGD2.05),and Far East Hospitality Trust(FEHT SP,Buy,CMP:SGD0.645,TP:SGD0.75).Upside/downside risks pertain to extent of inflows and outflows into and out of the sector driven by expectations of long-term bond yields.Also,currency movements can impact investor returns and thus pose upside/downside risks.14 May 2019 Pratik Burman Ray*,CFA Senior Property Analyst The Hongkong and Shanghai Banking Corporation Limited,Singapore Branch .sg+65 6658 0611 Derek Chang*Property Analyst The Hongkong and Shanghai Banking Corporation Limited,Singapore Branch .sg+65 6658 0624 Utkarsh Rastogi*Associate Bangalore *Employed by a non-US affiliate of HSBC Securities(USA)Inc,and is not registered/qualified pursuant to FINRA regulations Singapore REITs Equities REITs Singapore Safety comes with a price tag Equities REITs 14 May 2019 2 SREITs under HSBC coverage*:Valuation summary Company name Stock code Rating 10 May price TP(SGD)Market Cap(USDm)ADTV(USDm)RNAV(SGD)Premium/(discount)to RNAV DDM(SGD)Target premium/(discount)#Upside/downside DPU yield 2-year DPU CAGR Ascendas REIT AREIT SP Hold 2.940 2.80 6,713 23.0 2.56 15.1%3.06 0%-4.8%5.7%1.7%CapitaLand Mall Trust CT SP Hold 2.440 2.50 6,606 17.7 2.27 7.3%2.68 0%2.5%4.9%3.6%CapitaLand Commercial Trust CCT SP Hold 1.900 1.95 5,229 20.0 2.01-5.3%1.73 5%2.6%4.6%0.4%Suntec REIT SUN SP Buy 1.790 2.05 3,672 10.8 2.05-12.5%2.05 0%14.5%5.6%1.3%Mapletree Commercial Trust MCT SP Hold 1.920 1.90 4,079 11.7 1.76 9.2%2.01 0%-1.0%4.9%2.2%Keppel REIT KREIT SP Buy 1.230 1.35 3,076 7.2 1.44-14.4%1.18 5%9.8%4.7%1.9%Mapletree Logistics Trust MLT SP Hold 1.480 1.40 3,935 15.8 1.17 26.5%1.60 0%-5.4%5.5%2.4%Frasers Centrepoint Trust FCT SP Hold 2.420 2.45 1,651 2.4 2.15 12.6%2.98-5%1.2%5.3%2.4%CDL Hospitality Trusts CDREIT SP Hold 1.580 1.68 1,399 2.1 1.50 5.1%2.02-5%6.3%5.8%0.8%Keppel DC REIT KDCREIT SP Hold 1.540 1.45 1,528 4.0 1.12 37.6%1.91-5%-5.8%5.0%3.4%Far East Hospitality Trust FEHT SP Buy 0.645 0.75 901 1.3 0.78-16.9%0.90-10%16.3%6.6%2.9%Cache Logistics Trust CACHE SP Hold 0.740 0.72 585 1.5 0.75-0.9%0.95-15%-2.7%8.3%2.3%Total/Simple average 39,376 117.3 5.3%2.8%5.6%2.1%Total/Weighted average 39,376 117.3 6.2%1.8%5.3%2.1%#Our target prices for REITs are based on the target premium/(discount)applied to 50:50 weighing of our RNAV and DDM valuations.Source:Bloomberg,HSBC estimates 1QFY19 results summary Company name What was positive?What was negative?What should investors look out for?Ascendas REIT Positive rental reversions across all segments in Singapore(no renewals overseas);overall portfolio-4QFY19:+6.6%and FY19:+3.7%Supply-side headwinds persist in Singapore(79%of portfolio value);where management remains cautious on reversions going forward.Possible acquisitions given SGD700m debt headroom;developments post the proposed merger of CapitaLand and Ascendas Singbridge.CapitaLand Mall Trust Retail sector has bottomed and showing signs of stabilisation.Managements operating environment outlook remains cautious given supply considerations.Operating metrics for Funan post completion,potential AEIs at older properties,as well as acquisition and redevelopment.CapitaLand Commercial Trust Limited Grade A/A+office supply.Leverage is low at 35.2%,giving the REIT the opportunity to grow via acquisitions.Lack of clarity on whats next for HSBC Building,though we think risks around this are contained.Lease-up of CapitaSpring development and backfilling of other potential vacancies.Acquisitions Singapore and overseas.Suntec REIT 9 Penang Road office space 100%pre-leased;occupation in 2H20.Management upbeat on Suntec Citys retail prospects.Lower contributions from MBFC and ORQ.Potential acquisitions with proceeds raised from recent capital issuance.Mapletree Commercial Trust Healthy overall portfolio reversion of+5.4%and high occupancy of 98.1%with committed occupancy of 98.5%.PSA Building and Mapletree Anson(20%of overall NPI)are the pressure points.Inorganic growth from acquisitions with a debt headroom of SGD815m(40%gearing).Keppel REIT Strong rent reversion of+14.4%and healthy tenant retention rate of 69%in 1QFY19.Limited Grade A/A+office supply.Impending departure of UBS(lease expiry:Dec 2020),which occupies 230k in Office Raffles Quay(17%of the buildings NLA).Leasing up of space that will be vacated by UBS at ORQ.Eventual improvement in cash rentals from positive reversions achieved in prior years.Mapletree Logistics Trust Healthy reversions in HK(+5.8%),China(+2.6%driven by strength in T1 cities)and Vietnam(+2.8%).Key tenant CWT taken over by creditors post CWT Internationals default on HKD 1.4bn loan.Continued weakness in Chinas T2/T3 cities.Acquisitions sponsor has over SGD3bn in pipeline assets;third party deals also an option.CWTs ability to fulfil rental payment obligations.Frasers Centrepoint Trust Healthy average rental reversions(1HFY19:+5.4%,2QFY19:+2.0%).Shopper traffic still positive at+2.4%from Jan-Mar 2019.Post the acquisition of a 18.8%stake in a PGIM-linked fund,FCTs gearing is c36%,higher than the historical gearing range of 27.6-31.7%.Acquisition of stake in Waterway Point and a possible rollup of sponsors stake in the PGIM-linked fund.Potential impact of Jewel Changi Airport on FCTs Changi City Point.CDL Hospitality Trusts RevPAR growth in Munich,Florence and Maldives.FY19 RevPAR growth guidance for Singapore(63%of asset value)lowered to 1-3%from 3-5%post 2.4%y/y RevPAR decline in 1Q19.Inorganic growth from acquisitions,potentially in Europe.Incremental improvements in Singapores hotel sector.Keppel DC REIT Organic growth from AEI at Keppel DC Singapore 3 and Keppel DC Dublin 2,with expected completion this year.Assets like Basis Bay Data Centre and Keppel DC Dublin 1 continue to be under pressure,being c63%and c62%occupied respectively.Acquisition led-growth,given debt headroom of cSGD273m.Keppel DC 4 remains a potential acquisition from the sponsor upon stabilization.Far East Hospitality Trust 1Q19 hotel RevPAR up 0.7%y/y,with marginally higher room rates and stable occupancies in hotels(89.2%).Corporate demand remains tepid greater impact on serviced apartments.Relatively high gearing at 39.9%,though DRP could lower this.Incremental improvements in Singapores hospitality sector,opening of the Sentosa hotel and its operating metrics as well as prospective growth via acquisitions.Cache Logistics Trust Rental reversions turned positive for 1QFY19 at+1.3%(vs.4QFY18:-4.4%;FY18:-4.5%).Key tenant CWT taken over by creditors post parent company CWT Internationals default on HKD 1.4bn loan.CWTs ability to fulfil its rental payment obligations,portfolio rebalancing and diversification outside Singapore.Source:HSBC Our recently published notes on Singapore REITs Suntec REIT Upgrade to Buy:Looking cheap,10 May 2019 Frasers Centrepoint Trust Downgrade to Hold:A pause is in order,24 Apr 2019 Keppel REIT Buy:Entry into third market,10 May 2019 Mapletree Commercial Trust Hold:Healthy performance,24 Apr 2019 CDL Hospitality Trusts Hold:Marginal disappointment,30 Apr 2019 Keppel REIT Buy:On the lookout for acquisitions,17 Apr 2019 Ascendas REIT Hold:Yield appeal,29 Apr 2019 Singapore REITs:Potential fallout from CWT International default,17 Apr 2019 Mapletree Logistics Trust Hold:Steady performer,27 Apr 2019 Keppel DC REIT Hold:Focus on acquisition-led growth,15 Apr 2019 Source:HSBC 3 Equities REITs 14 May 2019 Singapore REITs:Sector table Price Market cap 90-day ADTV%YTD Bloomberg DPU yield estimate(consensus)Name Ticker Segment Currency 10-May (USDm)(USDm)Change P/B Year#1 Year#2 Year#3 CapitaLand Commercial Trust CCT SP Equity Office SGD 1.90 5,229 20.0 8.6%1.05 4.7%4.7%5.0%Keppel REIT KREIT SP Equity Office SGD 1.23 3,076 7.2 7.9%0.89 4.6%4.7%4.9%Frasers Commercial Trust FCOT SP Equity Office SGD 1.46 968 2.5 6.6%0.93 6.6%6.6%6.6%OUE Commercial Trust OUECT SP Equity Office SGD 0.50 1,049 0.4 8.7%0.70 6.8%7.0%7.0%Total/Average(Office)10,322 30.0 7.9%0.89 5.7%5.8%5.9%CapitaLand Mall Trust CT SP Equity Retail SGD 2.44 6,605 17.6 8.0%1.20 4.9%5.1%5.3%SPH REIT SPHREIT SP Equity Retail SGD 1.05 1,993 0.7 5.0%1.12 5.4%5.6%5.7%Frasers Centrepoint Trust FCT SP Equity Retail SGD 2.42 1,651 2.4 11.5%1.16 5.1%5.3%5.4%Total/Average(Retail)10,250 20.8 8.2%1.16 5.2%5.3%5.5%Suntec REIT SUN SP Equity Retail/Office SGD 1.79 3,672 10.8 0.6%0.85 5.6%5.5%5.6%Mapletree Commercial Trust MCT SP Equity Retail/Office SGD 1.92 4,079 11.7 16.4%1.20 4.8%4.9%5.1%Starhill Global REIT SGREIT SP Equity Retail/Office SGD 0.76 1,209 1.6 11.0%0.84 6.1%6.2%6.2%Total/Average(Mixed)8,959 24.1 9.3%0.97 5.5%5.6%5.6%Ascendas REIT AREIT SP Equity Industrial SGD 2.94 6,713 23.0 14.4%1.38 5.6%5.7%5.9%Mapletree Logistics Trust MLT SP Equity Industrial SGD 1.48 3,935 15.8 17.5%1.27 5.5%5.7%5.7%Mapletree Industrial Trust MINT SP Equity Industrial SGD 2.07 3,071 6.8 8.4%1.37 6.1%6.2%6.5%Keppel Data Centre REIT KDCREIT SP Equity Data Centre SGD 1.54 1,528 4.0 14.1%1.47 5.1%5.3%5.6%Cache Logistics Trust CACHE SP Equity Industrial SGD 0.74 585 1.5 6.5%1.12 8.1%8.0%8.6%AIMS AMP Capital Industrial REIT AAREIT SP Equity Industrial SGD 1.39 705 0.5 4.5%1.03 7.4%7.4%7.6%ESR REIT EREIT SP Equity Industrial SGD 0.53 1,224 1.7 2.9%1.12 8.4%8.6%8.2%Soilbuild Business Space REIT SBREIT SP Equity Industrial SGD 0.60 464 0.4 2.6%0.95 8.2%8.2%8.4%Sabana Shariah Compliant Industrial REIT SSREIT SP Equity Industrial SGD 0.41 317 0.2 5.1%0.72 n.a n.a n.a Total/Average(Industrial)18,542 53.9 8.4%1.16 6.8%6.9%7.1%Ascott REIT ART SP Equity Hospitality SGD 1.20 1,915 2.5 11.1%0.96 6.0%6.1%6.3%CDL Hospitality Trusts CDREIT SP Equity Hospitality SGD 1.58 1,399 2.1 8.2%1.03 6.0%6.1%6.4%OUE Hospitality Trust OUEHT SP Equity Hospitality SGD 0.70 943 0.9 4.5%0.93 7.3%7.4%7.6%Frasers Hospitality Trust FHT SP Equity Hospitality SGD 0.71 980 0.5 0.7%0.93 6.7%6.8%7.0%Far East Hospitality Trust FEHT SP Equity Hospitality SGD 0.65 901 1.3 6.6%0.74 6.5%6.8%7.0%Ascendas Hospitality Trust ASCHT SP Equity Hospitality SGD 0.94 779 0.5 21.4%0.96 6.3%6.4%n.a.Total/Average(Hospitality)6,917 7.8 8.8%0.93 6.5%6.6%6.8%Parkway Life REIT PREIT SP Equity Healthcare SGD 2.87 1,274 1.0 9.1%1.53 4.5%4.6%4.9%First REIT FIRT SP Equity Healthcare SGD 0.99 573 1.7 0.0%0.96 8.9%9.0%8.9%Total/Average(Healthcare)1,848 2.7 4.6%1.24 6.7%6.8%6.9%Mapletree Greater China Commercial Trust MAGIC SP Equity Retail/Office(HK/China)SGD 1.33 3,098 7.8 16.7%1.01 5.9%6.0%6.2%Fortune REIT FRT SP Equity Retail(Hong Kong)HKD 10.40 2,559 0.1 16.7%0.63 5.1%5.3%5.5%Frasers Logistics&Industrial Trust FLT SP Equity Industrial(Australia)SGD 1.16 1,726 7.2 12.6%1.28 5.8%5.8%5.9%CapitaLand Retail China Trust CRCT SP Equity Retail(China)SGD 1.49 1,092 2.1 9.6%0.94 6.8%7.1%7.4%Cromwell REIT CERT SP Equity Office/Industrial(Europe)EUR 0.50 1,232 0.2 13.6%0.94 8.2%8.2%8.0%Manulife US REIT MUST SP Equity Office(US)USD 0.84 1,171 1.1 9.1%1.03 7.1%7.3%7.4%Lippo Malls Indonesia Retail Trust LMRT SP Equity Retail(Indonesia)SGD 0.21 446 0.6 15.4%0.71 11.4%11.4%11.4%Ascendas India Trust AIT SP Equity Office/Biz Parks(India)SGD 1.31 1,002 0.9 21.3%1.29 6.1%6.6%n.a.Keppel KBS Realty KORE SP Equity Office(US)USD 0.75 613 0.3 22.1%0.89 6.8%7.9%7.9%EC World REIT ECWREIT SP Equity Logistics(China)SGD 0.78 455 0.2 13.0%0.90 8.1%8.2%8.8%IREIT Global IREIT SP Equity Mixed(Europe)SGD 0.75 349 0.2 3.4%1.02 n.a.n.a.n.a.Dasin REIT DASIN SP Equity Retail(China)SGD 0.87 355 0.2 0.0%0.57 4.3%4.5%n.a.BHG Retail REIT BHGREIT SP Equity Retail(China)SGD 0.73 271 0.0 2.1%0.90 n.a.n.a.n.a.Sasseur REIT SASSR SP Equity Retail(China)SGD 0.79 685 0.8 n.a 0.97 8.3%8.5%9.2%Total/Average(REITs with overseas assets only)15,053 21.7 12.0%0.93 7.0%7.2%7.8%SECTOR TOTAL/AVERAGE 71,890 161.0 8.5%1.04 6.2%6.3%6.5%Source:Bloomberg,HSBC Equities REITs 14 May 2019 4 Sectors safe haven appeal is reflected in its valuation Not cheap on various valuation metrics After outperforming the broad market(as represented by the STI Index,FSSTI)in 8 out of the past 9 years on a total return basis since 2010,the SREIT sector(as represented by the SREIT Index,FSTREI)has continued its relative outperformance y-t-d.However,the run-up has dented the prospective upside this sector offers,which makes