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Stocks In Focus (Croesus Retail Trust, United Overseas Bank, Ascott REIT)-03/05/2013
Croesus Retail Trust’s 229m IPO Units Offer
Croesus Retail Trust (CRT), will be offering 229.12 million units to institutional and retail investors at $0.93 per unit. A stipulated of some 21.5 million units, representing 9.4 percent of the offering will be available to the public. The initial public offering (IPO) will see CRT’s shares listed on the mainboard of the Singapore stock exchange. Stipulated to list on 10 May, 2013, the trustee manager has a forecast distribution yield of about 8 percent, which is forecasted for 2014, and 8.1 percent for 2015 (forecasted). 11 cornerstone investors have been separately secured, including Citadel Asset Management, Hong Leong Asset Management, and Eastspring Investments, which have agreed to take up 163.7 million units at the offering price. The trust has a portfolio which consists of four completed retail properties across Japan valued at 52.5 billion yen (approximately $662 million), with net lettable area of 180,622 square metres.
Significance: Competitive strengths of the properties are the stable yields, high occupancy rates, and proximity to train stations and key shopping districts. As at end-December 2012, the properties have an average occupancy rate of about 100 percent.
Record Net 1Q13 Earnings Of $722m For UOB
United Overseas Bank (UOB) has recorded better than expected earnings for 1Q13 of some $722 million, which represents a 4.9 percent increase compared to that of 1Q12. The better performance was mainly attributable to higher fee income, strong loan growth, although offset by lower margins. Annualised earnings per share reflected $1.73, compared to $1.64 a year ago. The net earnings of $722 million outperformed expectations of analysts polled by Reuters of an average estimate of $666 million. Net interest income for 1Q13 was $964 million, which was 3.5 percent lower than that of 1Q12 as a result of declined assets yield that more than offset the increased asset volumes. Gross customer loans were up 13.3 percent at $167 billion compared to a year ago. Singapore loans reflected a growth of 15.5 percent to $110 billion while the growth in regional countries was 9.7 percent.
Significance: Albeit the upbeat results, chief executive of UOB Wee Ee Cheong mentioned he expected overall growth to moderate and despite the strong start seen from the record quarter of profits and fees, UOB is mindful that overall growth is expected to moderate this year.
Ascott REIT’s China And Japan Properties Purchase
Ascott Residence Trust (Ascott REIT), has announced it has entered into conditional agreements to buy three prime serviced residences in China and a portfolio of 11 rental housing properties in Japan. The total cost of these agreements sum up to some $287.4 million. Ascott REIT will buy Citadines Biyun Shanghai for 321 million yuan, and the Somerset Heping Shenyang, the second residence will be bought from Ascott Serviced Residence (China) Fund (Ascott China), for about 438 million yuan. Ascott REIT owns a 36.1 percent stake in Ascott China. The third China residence will also be bought from Ascott China for about 118 million yuan. The three mentioned serviced residences will continue to be managed by Ascott China. The 11 rental housing properties in Japan have a total of 959 apartment units across six Japanese cities and will be bought for 9.2 billion yen. Chairman of the Ascott REIT Lim Jit Poh noted that Asia remains a hot spot for Ascott REIT to grow and that in its pace of acquiring quality assets in China and Japan, these acquisitions will increase Ascott REIT’s Asia portfolio from 59 percent to 63 percent of its total asset value.
Significance: On a pro forma basis, the acquisitions are expected to increase its FY12 distribution per unit from $0.0876 to $0.0901, which represents a 2.9 percent rise. Ascott REIT will seek unit holders’ approval for the transactions at an extraordinary general meeting on 30 May.
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