Five biggest Chinese real estate plays on SGX

On Friday the China National Bureau of Statistics reported that investment in real estate development from January through September had grown by 13.8%. The five biggest stocks/trusts on SGX with exposure to the Greater China real estate market all outperformed the major Chinese index benchmarks in the year-to-date. The five stocks/trusts are:

  1. Hongkong Land Holdings Ltd (H78). The company which is quoted and traded in US Dollars (USD) has generated a total return of 34.85% and maintains a dividend yield of 2.69%. In SGD terms, the total return converts to 32.84% in the year-to-date. The company owns and manages prime office and retail space in Hong Kong and through subsidiaries, it is active across Asia. With market capitalisation of approximately SGD 17 billion, the company is part of the Straits Times Index (STI) and has displayed a similar volatility level to the STI over the past two years. The investor relations page can be found here.
     
  2. Keppel Land Ltd (K17). The company has produced a total return of 64.67% in the 2012 year-to-date and maintains a dividend yield of 5.81%. Keppel Land is geographically diversified in Asia, with current focus on Singapore, China, Vietnam, Indonesia and India. The market capitalisation of Keppel Land is approximately SGD 5.3 billion. The investor relations page can be found here.
     
  3. Yanlord Land Group Ltd (Z25). The company has generated a total return of 32.98% in the 2012 year-to-date and does not maintain a dividend yield. The market capitalisation of the company is approximately SGD 2.5 billion. Yanlord Land is a real estate developer based in Mainland China that focuses on developing high-end residential, commercial and integrated property projects in Mainland China. The investor relations page can be found here.
     
  4. CapitaRetail China Trust (AU8U); The REIT has generated a total return of 53.22% in the 2012 year-to-date. CapitaRetail China Trust (CRCT) is the first Mainland China shopping mall REIT listed on SGX, with a portfolio of nine income-producing shopping malls. The market capitalisation of the REIT is approximately SGD 1.1 billion. The investor relations page can be found here.
     
  5. Ying Li International Real Estate (5DM); The company has generated a total return of 31.37% in the 2012 year-to-date. Like Yanlord, Ying Li International Real Estate does not maintain a dividend yield. The market capitalisation of the Chongqing commercial property developer is approximately SGD 724 million. The investor relations page can be found here.
     
    Dynasty REIT was launched last week and will be Singapore’s first Renminbi (RMB) denominated Real Estate Investment Trust (REIT). It has been established with the investment strategy of principally investing in income-producing commercial real estate located in Mainland China, as well as real estate-related assets. The closing time for the IPO is 12pm, 24 October 2012, with an afternoon listing on SGX scheduled for 30 October.
     
    The offer price of per units of the Dynasty REIT is RMB 4.40 to RMB 4.70, equivalent to SGD 0.855 to SGD 0.915 per Unit. Over the past 5 years, the Singapore Dollar has depreciated 0.25% to the Renminbi in contrast to appreciating 16.50% to the US Dollar. The units of the Dynasty REIT will be quoted and traded in both RMB and SGD. Dynasty REIT will have two trading counters:  a primary RMB counter and a secondary SGD counter. This provides investors with the flexibility to buy or sell the Units through either counter. Trades made in the Dynasty REIT RMB counter will be settled through the SGX-ST in RMB while trades made in the SGD counter will be settled through the SGX-ST in SGD. The units are fully fungible and any units acquired via the Dynasty REIT RMB counter or the Dynasty REIT SGD counter can be traded on the other counter seamlessly.

Dynasty REIT’s initial portfolio comprises of:

  1. Nanjing International Finance Center, which has 51 stories of mixed-use office and retail building with two basement levels with a 95.5% committed occupancy rate as of 31 May 2012.
     
  2. Dalian Tianxing Roosevelt Center, a retail mall with 5 stories and 2 basement levels and a 93.2% occupancy rate as of 31 May 2012.   
     
  3. Shanghai International Capital Plaza, which includes 29 stories of a mixed-use office and retail building with one basement level and a committed occupancy rate of 86.8%.  

Annualised, the forecast distribution yield of Dynasty REIT is 6.8% to 7.1% for 2012. This is based on the maximum and minimum offering prices. Based on these prices, the forecast distribution yield for the next year, 2013, is 7.0% to 7.3%. In the absence of an undertaking of a waived distribution of sponsor entitlements, the distribution yields would have been 3.2% for 2012 and 4.1% to 4.2% for 2013. The REIT sponsor [ARA Asset Management] has provided the Manager [ARA Trust Management (Dynasty) Pte. Ltd] with an undertaking that it shall waive (or shall procure the waiver of) entitlement to distributions on the sponsor units. Based on maximum to minimum offering prices, waivers amount to between RMB 6.9 million to RMB 7.2 million for the Forecast Period 2012 and thereafter between RMB 16.7 million to RMB 17.3 million for every financial year until the financial year ending 31 December 2017.  More information can be found in The Dynasty REIT prospectus can be obtained here.

Source: SGX My Gateway.

 

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