Elite Commercial REIT IPO

A Happy New Year and a new REIT IPO. Here are articles from news articles and bloggers who wrote about this.

IPO details from The Business Times

ELITE Commercial Reit braved the choppy market to launch its initial public offering (IPO) on Tuesday, pricing its units at £0.68 or S$1.21 per unit, which will translate to a forecast distribution yield of 7.1 per cent for 2020 and 7.2 per cent for 2022.

This is the first pound-denominated Reit listing in Singapore in what could pave the way for more UK-focused Reits to list here, including new asset classes such as student accommodation.

The retail and placement tranches, together with the cornerstone units - the latter mostly taken up by private banking and wealth management clients of UBS, Bank of Singapore, and CIMB - will raise gross proceeds of about £130.9 million in all.

The retail tranche represents just 5 per cent of the offering, which management told reporters in an interview on Tuesday is a function of the "small" offering size.

There is, however, institutional participation from the existing investors in the private trust that holds the properties. All have agreed to roll over their existing stakes into the listed Reit vehicle.

These include investment holding company Kim Seng Holdings, formerly a sponsor of Viva Industrial Trust; as well as Apricot Capital, the private investment firm of Super Group's Teo family; LB Venture Capital, a wholly-owned unit of the Lian Beng Group; and Partner Reinsurance Asia, a UK-based reinsurance company.

Closing date for applying to the IPO is 4 February 2020, 12pm

Investmentmoats
Probutterfly
Dr Wealth
Dollars and Sense
Financial Horse
Seedly
Marksman's Investment Corner
Financial MTC

Lend Lease REIT IPO

Another big REIT IPO. Here are articles from news articles and bloggers who wrote about this.

IPO details from The Straits Times

Sydney-headquartered Lendlease Group has lodged a prospectus to list a new Reit (real estate investment trust) - Lendlease Global Commercial Reit - on the Singapore Exchange's (SGX) main board.

About 387.5 million units at $0.88 each will be offered under the initial public offering (IPO) and a placement tranche.

The Reit's manager, Lendlease Global Commercial Trust Management, aims to raise gross proceeds of about $1.03 billion, which will pay for the costs of the IPO, the acquisition of the properties and working capital.

The Reit will initially consist of leasehold retail mall 313@Somerset in Singapore and freehold office property Sky Complex, which comprises three buildings, in Milan, Italy. The Reit's portfolio has an appraised value of about $1.41 billion.

Based on the Reit's unaudited pro forma balance sheet, net asset value per unit as of the proposed listing date will be $0.8134. Net property income is projected to be $47.9 million for next year and $65.8 million for 2021.

Projected distributable income is forecast at $44.9 million for next year and $62.7 million for 2021. Distribution per unit is forecast to be 3.82 cents, with distribution yield at 5.8 per cent for next year.

The public offer opens on Sept 25 at 9pm and closes on Sept 30 at 12pm, with the Reit expected to list on Oct 2. The minimum initial subscription for applications is 1,000 units. Placement tranche units are offered through an international placement including Singapore and excluding the United States.

Investmentmoats 

Financial Horse 

Seedly 

Dr Wealth 

Budget Babe 

Business Times 

Random Thoughts: Trade War and our Big 3 Banks, HK and Singapore ETF

In case you have been living under a rock for the last 2 years, the US and China are locking horns in a escalating trade war.

Here is a timeline from Bloomberg to help you get up to speed.

For those of you who have always wanted to buy into banks at their lows, the Big 3 banks have dropped about 20% off their recent 52 week highs. 

In addition, dividend yields for DBS and UOB have crossed the 5% threshold.

Here is what it looks like for the Tracker Fund of Hong Kong, and the SPDR Straits Times Index ETF

Time to think about opening the warchest...

Weekly Reads - Eagle Hospitality Trust IPO edition

Another week, another US hospitality trust IPO. Here are articles from news articles and bloggers who wrote about this.

IPO details from The Business Times

The offering price is US$0.78 per stapled security. A total of 580.6 million stapled securities are being offered, comprising an international placement of 535.7 million stapled securities to investors, including institutional and other investors in Singapore, and an offering of 44.9 million stapled securities to the public in Singapore.

EHT is a stapled group comprising Eagle Hospitality Real Estate Investment Trust (EH-Reit) and Eagle Hospitality Business Trust (EH-BT). It has an initial portfolio of 18 full-service hotel properties, with a total of 5,420 rooms and an aggregate valuation of about US$1.27 billion.

Projected annualised yield from 1st May 2019 to 31st Dec 2019 is 8.2%

Investmentmoats 

Financial Horse 

Probutterfly 

RiskNReturns 

Motley Fool 

Business Times 

Weekly Reads - 15 May 2019: Facebook, UFOs, Elizabeth Warren and BlackRock ETFs

Glowing Auras and ‘Black Money’: ThePentagon’s Mysterious U.F.O. Program - From the New York Times. The Navy is searching for UFOs

Cheap ETFs Are Hot, But BlackRock’s Premium Funds Pay the Bills - From Bloomberg. Not all ETFs are cheap

15 MONTHS OF FRESH HELL INSIDE FACEBOOK - From Wired. A look at the chaos in Facebook dealing with privacy scandals

The Making of Elizabeth Warren - From Politico. How Elizabeth Warren got started

Weekly reads - ARA US Hospitality Trust

There's some buzz around 2 upcoming US REIT IPOs. In case anyone is still making up their minds, better hurry up. If you didn't know about this, here are some articles to help you get started.

Issuing US$0.88 per stapled security, close at noon on May 7 

Starts trading 2pm on Thursday, May 9.  

The expected distribution yield is 8 per cent from May 1 to Dec 31, 2019, and 8.2 per cent for the projection year 2020.  

The Business Times

Financial Horse

KPO and CZM

Probutterfly

Motley Fool

RisknReturns

None of the above should be construed as investment advice. Do your own due diligence as I will not be responsible for any loss/risk.

Quick Notes: What is a Dark Kitchen?

Quick Notes: What is a Dark Kitchen?

Another step in the disruption of the traditional restaurant industry, dark kitchens are growing in popularity. Here is a listing of some points and relevant articles. This is not meant to be analysis.


What is a Dark Kitchen? 

Dark Kitchens contain purpose-built kitchens fit for delivery with each kitchen allocated to a different restaurant brand.

No seating areas for guests. Essentially a kitchen for servicing food deliveries.

Operator such as Deliveroo takes a larger cut of restaurant takings when they use dark kitchens, customers are charged a delivery fee.

Usually sited in non-prime areas, but close to the customers they are serving

Equipment provided by operators like Deliveroo, but the menus and staff are provided by individual restaurants that want to launch or increase their delivery capacity.

Food ordered via apps online and delivered by couriers

Points to note:

Delivering from restaurants require customers to live within a short distance, or food quality suffers. Dark kitchens get around this problem by moving the kitchen to where the customer is.

Food order data, and hence customer preferences can be shared with restaurants

Allows restaurants to test new recipes or even entire concepts at relatively low risk/cost.

Use of big data to decide what restaurants will do best in new locations, adapt to customer preferences. identify sources of high demand/low supply


Restaurants depend on Dark Kitchens operator for data on customer preferences. Dark kitchen operators own the relationship

Labour is "Amazonified", low wages, high stress, long hours, repetitive tasks. Could eventually be made by robots.

Low cost food leads to depressed wages for workers

Reference


Inside Deliveroo's dark kitchens, the food delivery fight's new front

Will Online Food Delivery Get “Amazoned”?

Are dark kitchens the satanic mills of our era?

How Deliveroo's 'dark kitchens' are catering from car parks

‘Dark kitchens’ spell trouble for the restaurant trade

Travis Kalanick’s new venture buys UK ‘dark kitchens’ business

Robots and delivery services take over a kitchen-free future, reports says

Dark kitchen - gastronomic revolutionaries | KTCHNrebel

Dark kitchens: is this the future of takeaway?

Weekly reads - 12th December 2018: Bernie Madoff edition

Nearly 10 years ago, on 11th Dec, 2008, Bernard Madoff was arrested after his gigantic Ponzi scheme was exposed. Here are some articles to refresh our memories of what happened and what has happened since.

What happened then - an article from the Economist explaining what happened when the fraud was exposed

Timeline of events, from The Guardian

Some not-so-rich people who were hurt by the fraud. 

Some rich people who were hurt by the fraud

What did Madoff do , as explained by Harvard Business Review

Red flags that might have alerted people that its a fraud

Interview with Harry Markopolos, the man who tried to expose Madoff

10 years later, where are they now?

A surprising amount of money is recovered since the fraud was exposed

Random thoughts - Government Linked Companies, how are they doing now?

Many people, rightfully or wrongly, view Government Linked Companies (GLCs) as blue-chip and safe investments. How are they doing in these troubled times?

Let's take a look at the FSSTI since the start of the year:

So basically not so good. 

How about the GLCs listed on the Singapore Stock Exchange?

Here is a list of companies that are considered GLCs.

-comparing their prices as of today against the 52 week lows, quite a number of them are at, or quite near these levels.

-looking at the dividend yields, a number of them appear quite juicy at the 4% or more range. Do note that special dividends may have been included in the data above, skewing some of them

-2009 was the nadir of the Great Financial Crisis and many stocks plumbed all time lows during the year. Comparing the current prices against the lowest price hit during that year, 1 company stands out: SIA

-taking the average price of the various companies during 2009, we can see that a large number of them are trading near the 2009 average levels. Some of them are trading lower than the average price during 2009


So price resilience wise, the GLCs are hit by the recent market turmoil, but on the bright side, stock pickers may wish to start checking some of them out.

None of the above should be construed as investment advice. Do your own due diligence as I will not be responsible for any loss/risk.

Weekly reads - 4th November 2018: Inflation, Grand Theft Auto and more

From Forager Funds - After a decade of extraordinary monetary policy, has everybody underestimated the threat of inflation?

A short profile of Houser Brothers. The guys behind Grand Theft Auto and Red Dead Redemption

Eddie Lampert interview after the Sears bankruptcy

John Authers moves from the Financial Times to Bloomberg

Jeff Gundlach speaks

Random thoughts - After last week's bloodbath..

Just a quick check on what some market indices look like. Looks like a correction (if  not a full blown bear) is in full swing.

And some local Singapore banking stocks. 

As well as a couple of ETFs tracking the Singapore and Hong Kong market

If we use dividend yields as a rough valuation guide, by plotting a graph of the dividend yields of the 2 ETFs from 2010 to now and comparing it against the average yield from 2010 to now,  it looks like the yield at current price is going above the average yield. 


STI ETF

The STI ETF yield is approaching a high, from 2010 onwards. Its yield is about 3.75% and if the ETF price hits 2.80, meaning the STI index drops to 2800, the yield would be about 4%.


Tracker Fund of Hong Kong

The Tracker Fund is surprisingly still not at a high if we look at the yields from 2010 onwards even though it has dropped close to 25% vs the 52 week high.

I guess this is the time when everyone's fortitude is tested. In such a market, most fundamental or value investors should start hunting for bargains.

None of the above should be construed as investment advice. Do your own due diligence as I will not be responsible for any loss/risk.