SECTOR ROUND-UP
Two new SREITs made their debut on the Singapore Exchange, bringing the number of SREITs to 41. Daiwa House Logistics Trust (DHLT SP, not rated) was listed on 26 November 2021 with an AUM of S$953mn. It comprises 14 logistic assets located in Japan. Data centre REIT, Digital Core REIT (DCREIT SP, not rated), made its debut on 6 December 2021 with a portfolio of 10 data centres located in North America valued at US$1.4bn.
SREITS pressed on with portfolio rebalancing. c.S$2.9bn in acquisitions were announced since November 21, bringing the YTD value of acquisitions to c.S$11.5bn. Notable acquisitions include Mapletree Logistics Trust’s (MLT SP, not rated) S$1.4bn acquisition of 17 logistics assets in China, Vietnam and Japan, Manulife US REIT’s (MUST SP, Accumulate, TP: US$0.84) three office assets in Phoenix and Portland, USA, and CapitaLand Integrated Commercial Trust’s (CICT SP, Accumulate, TP: S$2.54) maiden entry into Australia through the acquisition of two Grade A office buildings in Sydney valued at A$720mn. The latter comes hot on the heels of Keppel REIT’s (KREIT SP, not rated) A$328mn acquisition of a Grade A office under development located in North Sydney.
Retail
The Oct 21 retail sales index (excluding motor vehicles) was its tightest at -1.6% compared with the respective month in 2019, partly attributed to the Computer & Telecommunications Equipment sector (+73.4% YoY), which recorded higher mobile phone sales due to new product launches. Eight out of 12 of the retail categories experienced YoY growth, with Watches & Jewellery and petrol service stations delivering significant YoY growth of 30.1% and 17.6% respectively.
The F&B services index dipped 5.1% YoY due to the two pax dine-in restrictions in Oct 21. However, the raising of group size from two to five pax for dine-in and gatherings, which came into effect on 22 November 2021, should help catalyse F&B spending during the festive year-end period.
Hospitality
Nov 21 international visitor arrivals grew 72% MoM from 24k to 41k, the highest since the pandemic hit (Figure 12). This was largely attributed to the nine countries that were added to the vaccinated travel lane (VTL) on 19 October and 15 November. However, this represents a mere 2.7% of Nov 19’s arrivals. Outbound resident departures by air surpassed international arrivals for Oct 21, up 9.6% MoM to 45k. This represents 6.4% of Oct 19’s outbound residents travelling by air. This could be the start of waning staycation demand as Singaporeans revisit travel plans.
Average RevPAR was 24.7% higher YoY, on the back of higher room rates and occupancy. The rerating followed the commencement of the VTL on 8 September 2021, which began with Germany and Brunei. On a MoM basis, average RevPAR marginally improved – a 14.2% improvement in room rates erased a marginal 0.4ppt decline in occupancy.
Singapore and the nine respective countries continued with the VTL despite the emergence of the Omicron variant in November. We think this reiterates the government’s stance on the virus becoming endemic and confidence in protocols in place to detect and contain the infections. Hospitality recovery remains fragile, threatened by the new mutation of the virus and additional pre- and post-travel testing and isolation requirements.
Important Information
This report is prepared and/or distributed by Phillip Securities Research Pte Ltd ("Phillip Securities Research"), which is a holder of a financial adviser’s licence under the Financial Advisers Act, Chapter 110 in Singapore.
By receiving or reading this report, you agree to be bound by the terms and limitations set out below. Any failure to comply with these terms and limitations may constitute a violation of law. This report has been provided to you for personal use only and shall not be reproduced, distributed or published by you in whole or in part, for any purpose. If you have received this report by mistake, please delete or destroy it, and notify the sender immediately.
The information and any analysis, forecasts, projections, expectations and opinions (collectively, the “Research”) contained in this report has been obtained from public sources which Phillip Securities Research believes to be reliable. However, Phillip Securities Research does not make any representation or warranty, express or implied that such information or Research is accurate, complete or appropriate or should be relied upon as such. Any such information or Research contained in this report is subject to change, and Phillip Securities Research shall not have any responsibility to maintain or update the information or Research made available or to supply any corrections, updates or releases in connection therewith.
Any opinions, forecasts, assumptions, estimates, valuations and prices contained in this report are as of the date indicated and are subject to change at any time without prior notice. Past performance of any product referred to in this report is not indicative of future results.
This report does not constitute, and should not be used as a substitute for, tax, legal or investment advice. This report should not be relied upon exclusively or as authoritative, without further being subject to the recipient’s own independent verification and exercise of judgment. The fact that this report has been made available constitutes neither a recommendation to enter into a particular transaction, nor a representation that any product described in this report is suitable or appropriate for the recipient. Recipients should be aware that many of the products, which may be described in this report involve significant risks and may not be suitable for all investors, and that any decision to enter into transactions involving such products should not be made, unless all such risks are understood and an independent determination has been made that such transactions would be appropriate. Any discussion of the risks contained herein with respect to any product should not be considered to be a disclosure of all risks or a complete discussion of such risks.
Nothing in this report shall be construed to be an offer or solicitation for the purchase or sale of any product. Any decision to purchase any product mentioned in this report should take into account existing public information, including any registered prospectus in respect of such product.
Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may provide an array of financial services to a large number of corporations in Singapore and worldwide, including but not limited to commercial / investment banking activities (including sponsorship, financial advisory or underwriting activities), brokerage or securities trading activities. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have participated in or invested in transactions with the issuer(s) of the securities mentioned in this report, and may have performed services for or solicited business from such issuers. Additionally, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may have provided advice or investment services to such companies and investments or related investments, as may be mentioned in this report.
Phillip Securities Research or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report may, from time to time maintain a long or short position in securities referred to herein, or in related futures or options, purchase or sell, make a market in, or engage in any other transaction involving such securities, and earn brokerage or other compensation in respect of the foregoing. Investments will be denominated in various currencies including US dollars and Euro and thus will be subject to any fluctuation in exchange rates between US dollars and Euro or foreign currencies and the currency of your own jurisdiction. Such fluctuations may have an adverse effect on the value, price or income return of the investment.
To the extent permitted by law, Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may at any time engage in any of the above activities as set out above or otherwise hold an interest, whether material or not, in respect of companies and investments or related investments, which may be mentioned in this report. Accordingly, information may be available to Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, which is not reflected in this report, and Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited to its officers, directors, employees or persons involved in the issuance of this report, may, to the extent permitted by law, have acted upon or used the information prior to or immediately following its publication. Phillip Securities Research, or persons associated with or connected to Phillip Securities Research, including but not limited its officers, directors, employees or persons involved in the issuance of this report, may have issued other material that is inconsistent with, or reach different conclusions from, the contents of this report.
The information, tools and material presented herein are not directed, intended for distribution to or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to the applicable law or regulation or which would subject Phillip Securities Research to any registration or licensing or other requirement, or penalty for contravention of such requirements within such jurisdiction.
This report is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. The products mentioned in this report may not be suitable for all investors and a person receiving or reading this report should seek advice from a professional and financial adviser regarding the legal, business, financial, tax and other aspects including the suitability of such products, taking into account the specific investment objectives, financial situation or particular needs of that person, before making a commitment to invest in any of such products.
This report is not intended for distribution, publication to or use by any person in any jurisdiction outside of Singapore or any other jurisdiction as Phillip Securities Research may determine in its absolute discretion.
IMPORTANT DISCLOSURES FOR INCLUDED RESEARCH ANALYSES OR REPORTS OF FOREIGN RESEARCH HOUSE
Where the report contains research analyses or reports from a foreign research house, please note:
