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ESR-Logos Reit reports occupancy growth for assets in Japan, Singapore
THE manager for ESR-Logos Real Estate Investment Trust (ESR-Logos Reit : J91U +4%) has announced higher occupancy figures for the Reit portfolio&rsquo s assets in Tokyo and Singapore.
On Friday (Oct 27), it said the Reit&rsquo s ESR Sakura Distribution Centre asset hit 100 per cent occupancy after its existing tenant expanded its space requirement.
Located in Sakura City in the northern part of the Chiba prefecture in Tokyo, the five-storey modern logistics development was ESR-Logos Reit&rsquo s maiden entry into the Japanese logistics market when it was acquired in October 2022.
In Singapore, a new tenant was also secured for 7002 Ang Mo Kio Avenue 5 following its recent asset-enhancement initiative (AEI) completion. This brings occupancy in the multi-tenanted, high-specifications building to about 62 per cent.
Adrian Chui, chief executive of the manager, said the building &ldquo continues to demonstrate strong leasing traction&rdquo , given its latest occupancy level within two months of obtaining its temporary occupation permit.
While the tenant was not named, the manager referred to it as a &ldquo world-leading manufacturer of food service and airline equipment for the aviation industry for over 20 years&rdquo .
The tenant&rsquo s parent company was described as a &ldquo diversified, international conglomerate specialising in brand management, marketing, logistics and travel services&rdquo .
DBS Group Research lowered its price target on ESR-Logos Reit to S$0.34 from S$0.38 as it expects divestment, on top of AEI and redevelopment projects, to create an &ldquo income void&rdquo in the medium term.
While its analysts noted the Reit&rsquo s improved balance sheet and successful divestment to date, they estimate that its current 6 per cent exit yield on divestment may deprive it of S$25 million in income a year.
&ldquo Considering this income void on a full-year basis, we anticipate a 4 per cent impact on distribution per unit from FY2024,&rdquo they said on Friday.
The analysts also noted that 7.6 per cent of the Reit&rsquo s portfolio has a remaining lease of 10 years or less. In their view, this could dampen portfolio valuations by the year-end.
DBS nonetheless remains positive on the Reit&rsquo s prospects, as the research house said its upcoming asset-recalibration strategy should be value-accretive to the Reit, and drive its share price re-rating.
It rates the counter at &ldquo buy&rdquo , and highlighted an &ldquo attractive&rdquo dividend yield of more than 10 per cent.
Well in a way ARA Logos REIT shareholders were lucky at the time of the merger - their company held assets that had a relatively short asset life which was not reflected in the share price and yet ESR REIT offered a premium on top in their merger offer. If they sold out then they were laughing all the way to the bank. In contrast, ESR REIT shareholders at the time have only themselves to blame for voting in favour of the merger.
ESR-reit NTA was 58 cents in 2018. Sabana reit 53 cents.
Now in 2023, ESR-reit NTA is just 33 cents while Sabana reit remains at 53 cents.
So I would classify it as value destruction for ESR-reit holders.
Luckily Sabana reit got active shareholder Quarz to fight for the shareholders interests by rejecting the merger with ESR-Reit
and also deny ESR from issueing new shares thus help to prevent dilution. ARA-LOGOS shareholders on the other hand did not
have such luck, they must be cursing now.
Now in 2023, ESR-reit NTA is just 33 cents while Sabana reit remains at 53 cents.
So I would classify it as value destruction for ESR-reit holders.
Luckily Sabana reit got active shareholder Quarz to fight for the shareholders interests by rejecting the merger with ESR-Reit
and also deny ESR from issueing new shares thus help to prevent dilution. ARA-LOGOS shareholders on the other hand did not
have such luck, they must be cursing now.
BlackAx ( Date: 11-Oct-2023 15:42) Posted:
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Slip sliding away...ESR has been found out and unit holders are paying the price for a tainted and incompetent manager. For all the blustery of acquisitions the current price of the reit is saying something is not right with the management. Can a Quartz equivalent step forward and rescue this one. Time to get rid the manager and internalize it.
Unit holders of Sabana have shown that democracy works and investors need not accept the status quo. I hope the manager of ESR will take note and retail unit holders know they can demand change through their votes.👏
Taking shareholders for granted is nothing new. Always short change SH. Don think they will change.
BillionX ( Date: 07-Aug-2023 15:30) Posted:
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Todays historic development with the internalization of Sabana manager is a wake up call to ESR manager to not to take retail unit holders for granted. The message is very clear. Perform and achieve your KPIs or be voted out.
I think many ESR-LOGOS shareholders like me are giving ESR manager the LAST CHANCE to make sure they improve ESR-LOGOS performance within the next 1 year thru their 4Rs strategies. If performance dun improve, I think most shareholders will turn anti-ESR and would want to internalise and kick them out too.
luckyguy3 ( Date: 30-Jul-2023 14:57) Posted:
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Now that Sabana reit kicks out ESR manager. Good or bad for ESR-LOGOS?
Maybe this will wake up ESR manager' s idea and since now they can focus more on ESR-LOGOS since they no longer managing Sabana reit, they better make sure ESR-LOGOS performance improves if not next ESR-LOGOS shareholders will want to internalise and kick out ESR manager too.
Maybe this will wake up ESR manager' s idea and since now they can focus more on ESR-LOGOS since they no longer managing Sabana reit, they better make sure ESR-LOGOS performance improves if not next ESR-LOGOS shareholders will want to internalise and kick out ESR manager too.
I like to buy shares that are looked down by others and share price is low, like betting on outsider horse in turf club if u want me to use an example
Higher risk but higher gain (both dividend and capital gain as in share price).
If u buy winners like Mapletree etc... lower risk lower gain (lower dividend rate and capital gain).
Manulife etc.. high dividend but high gearing and lousy assets and prospect. Not so keen.
ESR-LOGOS is trying everything to lower the gearing and improve the quality of their assets, so I willing to give it a chance. Anything goes wrong I going to accept it. The most I lose my own money, I never borrow $$$ so I can afford that.
Cheers
Higher risk but higher gain (both dividend and capital gain as in share price).
If u buy winners like Mapletree etc... lower risk lower gain (lower dividend rate and capital gain).
Manulife etc.. high dividend but high gearing and lousy assets and prospect. Not so keen.
ESR-LOGOS is trying everything to lower the gearing and improve the quality of their assets, so I willing to give it a chance. Anything goes wrong I going to accept it. The most I lose my own money, I never borrow $$$ so I can afford that.
Cheers
Seventy ( Date: 30-Jul-2023 13:26) Posted:
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Strange logic. Buying the loser and hope they change. Wouldnt it be much easier to buy the winner and hope they continue? Following your logic of higher yield, u must buy Manulife, KORE, Prime, Dasin, Ec World etc.
luckyguy3 ( Date: 30-Jul-2023 01:13) Posted:
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Everyone can have their own view of things. My view is simple. We always get the shorter end of the stick. No shareholders interest in mind. So no point sticking to this. Cut loss and get out.
Seventy ( Date: 29-Jul-2023 18:07) Posted:
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Already so supportive when ELOG is worst performing, just make sure u dont go running naked around yr neighbourhood celebrating when Elog climbs one position up. We are all very proud of your choice of stock pick.
luckyguy3 ( Date: 29-Jul-2023 17:14) Posted:
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Any problem with that? My own money not yours right? Cheers
And worst performing at the moment, who will have the last laugh still dun know yet
And worst performing at the moment, who will have the last laugh still dun know yet
Seventy ( Date: 29-Jul-2023 14:26) Posted:
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Taking away the chinese and US property REITS, ESR LOGO REITS is the worst performing SReit on SGX?. In spite of this, you are still happy with ELOG? guess you are easy to please and Elog is very lucky to have unitholders like you.
luckyguy3 ( Date: 29-Jul-2023 14:14) Posted:
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I am a half full person when it comes to ESR-LOGOS. My own opinion is I am happy that ESR-LOGOS went for fund raising + disposal of non core assets although it will means short term pain (1-2 years pain, in the meantime got dividends to soothe my pain).
By fund raising and disposal they bring down the gearing to 33% and then will rise to around 35-36% after footing the bill for the 3 AEIs. Imagine had they not do the fund raising and the disposal, the gearing will shoot to 45-50% and panic set in. The share price will crash to new low around 25 cents.... At least now the share price stabilised at 32-35 cents because with gearing down to below 36%, panic will not set in even if interest rate remains high.
So for those who are vested in ESR-LOGOS, u will have to wait for interest rate to start coming down before u see ESR-LOGOS fly. Different from Sabana reits which is conservative and not planning to expand (they cant expand becos shareholders has blocked Sabana reit from issuing extra shares) which outperform when interest rate is high.
Cheers
By fund raising and disposal they bring down the gearing to 33% and then will rise to around 35-36% after footing the bill for the 3 AEIs. Imagine had they not do the fund raising and the disposal, the gearing will shoot to 45-50% and panic set in. The share price will crash to new low around 25 cents.... At least now the share price stabilised at 32-35 cents because with gearing down to below 36%, panic will not set in even if interest rate remains high.
So for those who are vested in ESR-LOGOS, u will have to wait for interest rate to start coming down before u see ESR-LOGOS fly. Different from Sabana reits which is conservative and not planning to expand (they cant expand becos shareholders has blocked Sabana reit from issuing extra shares) which outperform when interest rate is high.
Cheers
BillionX ( Date: 29-Jul-2023 14:00) Posted:
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I am vested. So I am happy if ESR outperform Sabana. Unit holders are in for the a consistent and resilient dpu and the Reit to reflect its value . 🙏 PS thank you for sharing your thoughts 😊
If Sabana replacement of the external manager with an internal one is successful it will be in ESR management interest to take note and not to take unit holders interest for granted.
As expected the dpu has fallen despite all the new acquisitions. Why? Again the unwieldy issuing of new units to pay ESR. It?s a win-win for the owner-management but not the unit holders 🥲
Seems like the trend is moving towards internalization of the asset manager - something which Link REIT model is built upon.
RumbaRambo ( Date: 25-Jul-2023 21:37) Posted:
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