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UOB KAYHIAN |
LIM & TAN |
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US Office REITs – Singapore Office: The Tide Is Turning For US Office REITs
Highlights • The pick-up in M&A activities for US-based office REITs and resurgence in issuance for CMBS signal renewed confidence in the US office market. • Office demand is likely to recover in 2H25, driven by easing of trade tension and downsizing, positive work-from-office momentum and falling new supply. • BUY PRIME (Target: US$0.31) due to a pick-up in leasing momentum. HOLD KORE (Target: US$0.26) for yields of 4.1% for 2026 and 6.5% for 2027.
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ISOTeam ($0.087, down 0.3 cents) has announced plans to raise gross proceeds of S$10.0 million mainly to support its drone initiatives as part of the Group’s digital transformation strategy. The fundraising exercise will comprise the proposed placement of approximately 86.2 million new ordinary shares in the capital of the Company at a placement price of 8.1 Singapore cents per share (“Share Placement”) that will raise proceeds of approximately S$7.0 million; and, a proposed convertible bond placement through the allotment and issue of 32.9 million conversion shares convertible at approximately 9.1 Singapore cents per share1 , which will raise an aggregate principal amount of S$3.0 million (“Convertible Bond Placement”) (together, the “Proposed Placements”). ISOTeam’s market cap stands at S$61.5mln and currently trades at 8.7x forward PE and 1.3x PB, with a dividend yield of 0.9%. Consensus target price stands at S$0.10, representing 14.9% upside at current share price |
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LIM & TAN |
CGS CIMB |
The Business Times: Mainboard-listed Centurion Corp (S$1.80, up 4 cts) is spinning off several of its worker accommodation properties into a Singapore-listed real estate investment trust, or S-Reit.
Key Details of Centurion Accommodation Reit: · Market Cap of about S$1.5bln. Projected DPU yields of 7.47% in FY26 and 8.11% in FY27 · International placement tranche of 248.96 million units and a public offering of 13.2 million units (S$0.88/unit) · Shareholdings (Sponsor: 45.8%, Cornerstone Investors 35.7%, Public and institutional investors 15.2%, Juniper Vendor 3.3%) · Leverage Ratio of 20.9% at IPO, increasing to 31.0% post debt funded acquistion of Epiisod Macquarie Park · Sponsor intends to distribute by way of the Dividend in Specie, a portion of the Sponsor’s Units at IPO in 2026. Sponsor will hold 35% to 40% of the total number of Units in issue following the Dividend In Specie . · To distribute 100% of annual distributable income until FY27. Thereafter, to distribute at least 90% for each financial year on a semi-annual basis.
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Malaysia Strategy The trifecta to 1,690
■ As political jitters hit Indonesia, Thailand, and the Philippines, a relatively stable Malaysia could benefit from a switching of funds flows, in our view. ■ Potential narrowing of the FFR-OPR spread from the Fed’s impending rate downcycle should be positive for the ringgit and Malaysian stock market. ■ The “year-end window dressing” effect is statistically significant for Malaysia, with a 94% historical probability of positive mom returns in Dec.
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