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Stocks In Focus (Courts Asia, Croesus Retail Trust, Cache Logistics Trust) – 25/04/13
Courts Asia $125m Bond Receives Overwhelming Response
Courts Asia (Courts), Singapore’s largest furniture and electrical appliances seller saw overwhelming response for its three-year $125 million bonds. The bond issue saw a massive order size of $2.1 billion, which made allocation tough as well. Nonetheless, Courts’ successful bond debut is a resounding testimony of investor receptivity to the Courts brand name. The near five percent coupon (actual at 4.75 percent) tagged to the three-year bond note was also a major attraction for yield hungry investors, apart from the strong brand name. Proceeds from the bond issue will be used to repay existing borrowings of the group and for general corporate use.
Significance: Not many bonds in the market, especially on a three-year maturity basis, see an offer close to five percent. The strong take up rate reflects the appetite of investors for yield seeking investments, and the belief in the strong consumption trend especially in Asia.
Croesus Retail Trust IPO; Priced At $0.93 Per Piece
A real estate investment vehicle backed by Marubeni Corporation and Daiwa House Industry Co, Croesus Retail Trust (Croesus), has priced its planned initial public offering (IPO) at $0.93 a piece. This US$300 million deal would be the second biggest IPO in Singapore this year after the mega listing of Mapletree Greater China Commercial Trust earlier this year. The plan to list Croesus in Singapore in November last year was shelved due to weak market conditions. Croesus will own Japanese shopping malls in its portfolio and can be expected to start roadshows, upon filing its preliminary IPO prospectus to the Singapore central bank.
Significance: If listed successfully, Croesus will be the first Japanese company focused on retail property to list in Singapore, and the second Japanese company after Saizen REIT, which listed residential properties in a share sale in 2007, raising some $197 million.
Cache Logistics Trust’s 1Q13 DPU Up 7.1%
Cache Logistics Trust (Cache), has posted a 7.1 percent increase in its distribution per unit for 1Q13. Backed by the higher gross revenue of $19.1 million (up 13.3 percent), distributable income rose 18.3 percent to $15.8 million for 1Q13. The higher distributable income and revenue was mainly due to additional rental income from upward rental adjustments and acquisitions of investment properties completed in 2012. Other than the completed transaction of acquiring Precise Two, a completed three storey fully ramp up warehouse in Gul Way, Cache was also able to secure a new tenant for its APC Distrihub to address its lease expiry in 2013.
Significance: Cache continues to be fully occupied with no renewals due for the remainder of the year. Cache’s portfolio as of end March 2013 included 12 logistics warehouse properties located in Singapore and China. The overall portfolio occupancy was maintained at 100 percent with a weighted average lease to expiry of 3.7 years.
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