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Cambridge Ind Trust Results Announcement
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baoyuk
Member |
28-Oct-2022 18:36
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wow.. did people see how much the sponser' s ESR Group share price has corrected this year as well... more than 47%!!! truly stunning!! will be interesting to see what price ESR REIT will be if they buy the $2.7billion worth of sponser pipeline which they talk about during the merger especially with their leverage of > 40% already |
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lukewong82
Master |
28-Oct-2022 08:06
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If you look at ESR-LOGOS Cost of debt in pre-covid era 2019 and after merger 2022, you will see that it has shown a lot of improvements. 
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lukewong82
Master |
27-Oct-2022 21:23
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lukewong82
Master |
27-Oct-2022 19:46
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I also want to address the drop in occupancy rates for ESR-LOGOS from 94 to 92%. First one non-renewal is deliberate as Elog is redeveloping the asset into new economy assets aka cold storage. Second one they are in currently negiotiating with replacement tenant so by Q4 the vacancy should be filled up. And positive reversion is expected into the year 2023. This helps to offset any increase in interest rate for the floating component. DBS REPORT: (-) Slight dip in portfolio occupancies to 92.4%
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lukewong82
Master |
27-Oct-2022 19:06
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ESR-LOGOS like other reits cannot escape rising interest rate. Just hope inflation can be controlled ASAP and interest rate to drop ASAP. http://www.dbs.com.sg/treasures/aics/templatedata/article/recentdevelopment/data/en/DBSV/102022/EREIT_SP_10272022.xml Key summary points
(-) Slight dip in portfolio occupancies to 92.4%
(+) Acquisition of Sakura Distribution Centre to be completed at the end of the month
(+) Completed S$132.2m in divestments this year
(-) All-in cost of debt inched up to 3.27%
Our thoughts Riding on the past few quarters of positive rental reversions, EREIT reported another quarter of strong double-digit reversions of +11.4%. We noted that all its property segments reported positive rental reversions, with the strongest reversions coming from its Logistics and High-Specs property segments. However, portfolio occupancies dipped by 1.7ppts q-o-q mainly due to non-renewals at two properties. Similar to peers, EREIT&rsquo s cost of borrowings reported an uptick to 3.27%. Although the proportion of its debt hedged to fixed rates remained at 66.6%, the spike was likely from floating rate loans. EREIT does not have any refinancing requirements for FY22, and the bulk of the refinancing for FY23 will only be due in 4Q23. A total of S$390m in loans will be due in FY23, and this represents approximately 19.6% of EREIT&rsquo s entire loan book. Given the rising interest rate environment, we will be watching the terms of refinancing closely. We continue to like EREIT as it recalibrates its portfolio with the impending completion of the acquisition of Sakura Distribtuion Centre, and further divestments of non-core assets to manage its gearing. Although EREIT had previously expected to benefit from lower margins and financing costs following the merger with ARA LOGOS Logistics Trust, the rapid rise in interest rates will lead to higher overall borrowing costs. As such, we have revised our projections and assumed higher interest expenses going forward, leading to a lowering of FY23 and FY24 DPU projections by 2%-3%. Having assumed higher cost of debt and increasing our risk-free rate assumption to 3.5%, we have lowered our TP to S$0.44. Despite this, EREIT is currently trading at a very attractive forward yield of slightly more than 9.0%. As such, we will be maintaining our BUY recommendation. |
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lukewong82
Master |
27-Oct-2022 16:19
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Let me clarify YET again. 1) The merger was completed in April. So the number of shares issued for 2Q and 3Q is the same except for script for dividend in 2Q which is not significant. Comparing 2Q and 3Q as shown below. a) 2Q/2022: NPI (for dividend payout) = $63.3M  b) 3Q/2022 NPI (Latest) = $69.9M  So latest 3Q results is indeed a very good one as NPI improves. 2) Japan assets is 2.9% accretive and it will start contributing in NOVEMBER. So expect at least a 2% accretive to the DPU for the 2 months of Nov and Dec.  3) The fact that ESR-LOGOS has pass the energy costs to the customers means that starting from 3Q, the expenses will be reduced and thus we will see high NPI (Net Property Income) which will mean high dividends ahead 
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baoyuk
Member |
27-Oct-2022 15:10
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3Q2022 operating metrics is quite telling for the DPU in the quarter ocuppancy fell from 94.1% in 1H2022 to 92.4% in 3Q2022 Net property income NPI only increase by 59% when total number of units increase by 66% (means less net property income for every unit) Cost of debt increase by 10% from 2.97% to 3.27% I think it is clear from the above recurring DPU is estimated to be lower in 3Q2022 on a year on year basis |
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baoyuk
Member |
27-Oct-2022 15:01
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This one already discuss already....sigh... GIC is investing in the fund which usually has a fixed exit period of within 5-10 years.. As fund manager, ESR is incentize for the fund to make as much profit as possible, sell the assets as high price as possible so they can earn performance fee on the profit Guess who are they exiting to and will buy the assets at a high price? lol Will the assets in the fund also be part of the pipeline for ESR REIT to buy??  The japan asset ESR REIT is buying is also from one of ESR fund' s. Anybody have asked how much profit the fund is making in the sale to ESR REIT? Ask la... |
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Joelton
Supreme |
27-Oct-2022 08:16
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ESR-Logos Reit reports S$69.9m in Q3 net property income post-merger
ESR-LOGOS Reit saw its gross revenue and net property income (NPI) of S$96.2 million and S$69.9 million, respectively, for the third quarter ended Sep 30 &ndash representing a 57.4 per cent and 59.2 per cent increase from the previous year.
In a business update on Wednesday (Oct 26), its manager attributed the higher year-on-year gross revenue and NPI to contributions from Ara Logos Logistics Trust (ALog Trust) after the merger in April 2022.
The latest set of results brings ESR-Logos Reit&rsquo s gross revenue for the year to date (YTD) to S$243.9 million, up 34.8 per cent from S$180.9 million the previous year. YTD NPI rose 32 per cent to S$172.7 million from S$130.8 million per cent a year ago.
Net asset value (NAV) per unit as at Sep 30, however, fell 7.6 per cent to 36.6 Singapore cents from 39.6 cents the year before after factoring in the premium paid over ALog Trust&rsquo s NAV as well as transaction costs that were incurred to the merger being written off in the second quarter of 2022.
For both Q3 and YTD 2022, the Reit&rsquo s (real estate investment trust) portfolio achieved a positive rental reversion of +11.4 per cent, with space demand mainly driven by the logistics and high-specs segment.
Its weighted average lease expiry stood at 3.2 years with about 6.4 per cent of leases due for renewal in FY2022. About 91 per cent of these expiring leases are in the process of the renewal, said the manager.
Portfolio occupancy stood at 92.4 per cent &ndash which the manager highlighted is above the industry average albeit down from previous quarters (94.1 per cent in Q2 and 93.7 per cent in the first quarter).
Citing advanced estimates from the Ministry of Trade and Industry for Q3, the manager foresees a slowdown in global economic activity to dampen private consumption and investments going forward, with Singapore&rsquo s manufacturing sector and some trade-related services expected to moderate downwards.
While the manager said it anticipates continued demand for logistics and high-specs sectors in Singapore for the rest of the year, it cautioned that the pace of growth could moderate in 2023 amid softening sentiments alongside mounting global risks.
In Australia, it noted a slight fall in national vacancy rates and an increase in rents by a new record high led by Sydney.
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Observers
Elite |
27-Oct-2022 07:32
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https://www.reuters.com/markets/us/us-mortgage-interest-rates-jump-716-highest-since-2001-2022-10-26/ 7.16%. I wonder if there is anything our govt can do to mitigate interest rates. I think quite hard right? As far as Singapore is concern it' s inflation first, interest rate 2nd. At most is use money to " bail out" our strategically important SOEs like SIA MCBs that they are now redeeming. I guess this is the main reason why manulife US reit hit so hard? |
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lukewong82
Master |
26-Oct-2022 20:26
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Our own GIC is achoring Giant ESR, the parent of ESR-LOGOS. So who knows, GIC may decide to take a stake in ESR-LOGOS. Then ESR-LOGOS holders will huat to jurong!
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lukewong82
Master |
26-Oct-2022 20:24
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lukewong82
Master |
26-Oct-2022 20:16
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haha.. thanks for bumping up this thread. The fear monger says Temasek can run with 41% gearing. Well well well, perhaps he likes to read the following news: ESR is a GIANT so yes ESR-LOGOS under ESR can also run with 41% gearing. Thanks for supporting ESR-LOGOS. http://realassets.ipe.com/news/singapores-gic-cornerstones-second-esr-australia-development-partnership/10062559.article Singapore&rsquo s GIC cornerstones second ESR Australia development partnershipSingapore&rsquo s GIC has injected a further A$490m (&euro 321.7m) into ESR Australia to back the launch of a second development partnership with the Australian arm of ESR. ESR has raised A$540m, including the cornerstone investment from GIC, with the first close of ESR Australia Development Partnership II (EADP II). It expects to raise the balance of the targetted A$1bn in equity in the second close by the first half of 2023. |
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baoyuk
Member |
26-Oct-2022 20:02
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ya CICT is a blue chip REIT with Capitaland as main shareholder and main shareholder of capitaland is Temasek. that' s why it can run with leverage of 41% When the hospitality sector recover, FHT will soon increase its book value and the leverage will reduce. They also sold a sydney hotel which will reduce leverage as well Funny that you mention Suntec which also has ESR as a sponser, if you look at its price chart, it is also trading at more than 25% below its pre-covid level and trading below book value. is it also same same as ESR REIT' s high leverage issue??
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lukewong82
Master |
26-Oct-2022 18:51
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To counter the guy who tries to cause panic by saying ESR-LOGOS gearing at around 40% is " fatal' , let us see examples of other reputable reits that have gearing at 40%. 1) CICT. Capitaland Comm trust Gearing 41.2%. A super blue chip type of reit. No one can deny this is a solid reit. I dare the fear mongering guy talks bad about this reit becos of it' s gearing. Let see what responds he will get.   2) Fraser H trust: 42.3%. Fraser is a solid sponsor. I challenge the fear mongering guy to talk bad about this reit. The management willing to pay 70 cents to take it private even when Gearing is 42.5%. So it shows gearing of around 40% is not " fatal"  3) Suntec: 43.75 gearing. this reit is favourite among institutional investors. So is the fear mongering guy suggesting that institutional investors are stupid?  |
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lukewong82
Master |
26-Oct-2022 18:43
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Thanks ... yes my strategy is to look for those reits that are not " appreciated" by investor yet becos the results have not being reflected like AEIs. The fruits of AEIs will come to bear after 1 to 2 years when the AEIs are completed. That is what I observed in SABANA reits. During the period from 2018 to 2020, Sabana reit share price used to always lag behind ESR-Reit because at that time, due to AEI of NewTech Park, the money invested in the AEIs resulted in lacklustre dividend and NTA. So Sabana is always the little bro to ESR-Reit. All that changed once AEI of Newtech park was completed and extra income kept coming in and the Newtech park enjoyed revaluation and then Sabana share price shot ahead of ESR-Reit because it is now ESR-Reit turns to do a placements to fund their AEIs and purchase of Australia assets. So I waiting for the AEIs to be completed for ESR-LOGOS and then extra income will come in as well as revaluation of the new improved assets. Yes.. appreciate ur help.. haha. I will now look at CICT and see whether the potential of their AEIs. BUT investing based on AEIs need A LOT OF PATIENCE. At least need to wait 2 years to bear the fruits. Cheers
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chengwh1
Elite |
26-Oct-2022 18:31
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Actually,... yo have a point there too,... betting on AEIs today, because it is hard to go for acquisitions in today' s environment. A REIT can' t grow dpu if it does not do acquistions,.. but in these times, AEIs and .......... asset conversions (like what Capitaland Ascendas REIT is doing) will help. Back to AEIs, if you look at the reporting by CICT last Friday, there are AEIs being completed in the next few years,... perhaps this might be helpful to you too. I' m for the dividend, capital gain is a bonus to me. But interestingly, many of my REITs enjoyed great capital gains too. |
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lukewong82
Master |
26-Oct-2022 18:22
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Yes.. ESR-LOGOS needs patience.. So this is not for those who wants fast capital gains. There are MANY durians to pick now that almost all reits are at 52 weeks low, some even covid march 2020 low. I stick ESR-LOGOS hahaha cos i believe in my analsye based on what happened to Sabana after AEI of Newtech park was completed so I betting on ESR-LOGOS AEIs' completion as well as overseas assets. All the best to you. Cheers
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chengwh1
Elite |
26-Oct-2022 18:12
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Luke Wong,... I am not too keen to debate here,.. I' ve sold-out of ESR-Logos and with many REITs dropping to 52-week lows today,... I' m pointing my rifle to other directions. Not here to cause panic or whatsoever along that line,.. but I appreciated your explanations. I might go back into ESR-Logos in future,... but I' d prefer to ' fill my stomach with other food' first before taking this one. |
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baoyuk
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26-Oct-2022 16:14
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With leverage increasing to 42% after the acquisition especially in an interest rising environment, it also means there is a likelier chance that there would be a capital raising such as placement If they sell assets to bring down the leverage, it also means less DPU... at the end.. cannot have your cake and eat it
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