We have been looking at nuclear energy for a while… There is a lot of interest out there right now among the technology developers to look at smaller, safer small modular reactors.
— Energy Market Authority CEO Puah Kok Keong on the feasibility of nuclear power in Singapore
Great Eastern to have till January 2025 to comply with free float rule
Great Eastern Holdings (GEH) now has till Jan 24, 2025 to comply with the free float rule. The extension was announced on Oct 21, two days before the company’s previous deadline of Oct 23.
GEH said on Aug 2 that it had received approval from Singapore Exchange S68 Securities Trading (SGX-ST) to explore options to restore its public float by Oct 23.
Trading of GEH shares has been suspended since July 15. The company lost its free float on June 14 when offeror Oversea-Chinese Banking Corporation (OCBC) received 1.48 million shares — or 0.31% acceptances from shareholders — taking the bank’s total stake to 90.16%.
See also: Interra Resources granted 12-month extension to meet SGX watch-list exit requirements
In its Oct 21 announcement, GEH says shareholders who have not accepted OCBC’s offer will have till 5.30pm on Oct 23 to decide whether to exercise their right under Section 215(3).
The section says these shareholders have the right to require OCBC to acquire their shares on the same terms set out in the offer document.
It adds that OCBC’s stake in the company may increase should any of these shareholders elect to exercise their right prior to Oct 23.
See also: First Sponsor Group ups stake in Dutch property firm NSI for $26.6 mil
Similar to its Aug 2 announcement, GEH says OCBC’s final stake in the company will only be known after the completion of the exercise of Section 215(3).
As such, GEH had to apply to the SGX-ST again to seek approval for an extension of time for the latter to consider the options available for it to comply with the free float requirement.
GEH will announce its business update for the 3QFY2024 ended Sept 30 on the morning of Nov 6. — Felicia Tan
Keppel REIT posts 2.1% dip in distributable income from operations in 9MFY2024
Keppel REIT has reported a property income of $193.7 million for the 9MFY2024 ended Sept 30, 12.3% higher y-o-y. Net property income (NPI) for the same period was up by 10.8% y-o-y to $148.5 million. The increases in both figures were mainly due to the higher occupancy at Ocean Financial Centre in Singapore and KR Ginza II in Japan.
Contributions from 2 Blue Street and the newly acquired 255 George Street, both in Australia, also led to the increases.
However, distributable income from operations of $145.6 million for the 9MFY2024 fell by 2.1% y-o-y as borrowing costs were up by 33.3% y-o-y to $65 million. Including the REIT’s anniversary distribution of $15 million, the total distributable income stood at $160.6 million, 1.9% lower y-o-y.
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As at Sept 30, the REIT’s aggregate leverage stood at 41.9% with 68% of borrowings on fixed rates, compared to the aggregate leverage of 39.5% with 76% of borrowings on fixed rates as at Sept 30, 2023.
The REIT’s interest coverage ratio (ICR) also fell to 3.0 times as at Sept 30 from 3.3 times last year.
As at Sept 30, Keppel REIT reported a portfolio occupancy of 97.6% compared to an occupancy rate of 97% a quarter ago and 95.9% a year ago. The portfolio’s weighted average lease expiry (WALE) stood at 4.6 years compared to the WALE of 5.6 years last year.
For this period, rental reversion stood at a positive 10.2%. — Felicia Tan
Mapletree Logistics Trust’s DPU falls 10.6% in 2QFY2025
The manager of Mapletree Logistics Trust M44U has reported a distribution per unit (DPU) of 2.027 cents for 2QFY2025 ended Sept 30, down 10.6% y-o-y from 2.268 cents in 2QFY2024.
The REIT’s distributable income stood at $102.3 million in 2QFY2025, down by 9.1% y-o-y. This came on the back of higher borrowing costs, which saw a 8.2% y-o-y increase to $39.8 million.
The REIT also saw lower divestment gains of $6.1 million in 2QFY2025, down from $8.8 million in 2QFY2024. Similarly, gross revenue for the quarter fell 1.8% y-o-y to $183.3 million, while the REIT’s net property income fell 2.1% y-o-y to $158.6 million.
Meanwhile, the REIT’s portfolio occupancy rose to 96.0% in 1QFY2025, largely due to backfilling of space in Hong Kong and Vietnam, while its weighted average lease expiry (WALE) stood at approximately 2.8 years.
The manager adds that the REIT achieved “positive rental reversions across most markets”, except for China which registered a negative rental reversion.
The REIT completed the divestments of two properties in Malaysia and Singapore, and announced the divestments of another three properties in Malaysia during 2QFY2025. The divestments have a total of $100 million in sale value and were completed at an average premium to valuation of 15%. — Ashley Lo
Keppel Pacific Oak US REIT’s trustee secures US$45 mil loan facility
The manager of Keppel Pacific Oak US REIT (KORE) says the REIT’s trustee, Perpetual (Asia), has secured a US$45 million ($59.3 million) loan facility.
The transaction is not expected to have a material impact on the net tangible assets or earnings per unit of KORE for the current financial year ending Dec 31.
For its 1HFY2024 ended June, the REIT reported a gross revenue and net property income (NPI) of US$74.4 million and US$42.0 million, respectively.
These figures are down 2.0% and 4.2% y-o-y from the US office REIT’s 1HFY2023 results. — Ashley Lo
CapitaLand Ascott Trust to divest Somerset Olympic Tower Tianjin
CapitaLand Ascott Trust (CLAS) has entered into an agreement to divest Somerset Olympic Tower Tianjin in China to an unrelated third party.
Somerset Olympic Tower Tianjin, which comprises 185 units, is expected to be divested at above book value.
CLAS’s properties in China contributed 1.4% to the group’s gross profit in 1HFY2024, says Serena Teo, CEO of the manager. “The divestment of Somerset Olympic Tower Tianjin is expected to have minimal impact on CLAS’s gross profit.”
The divestment comes on the back of CLAS’s portfolio reconstitution strategy. Excluding the latest divestment, CLAS has divested a total of approximately $400 million in assets year-to-date. The group says the properties were divested at a premium to book value, which resulted in approximately $54 million in gains. — Ashley Lo
Parkway Life REIT announces first-ever private placement
Parkway Life REIT’s first-ever private placement to fund an acquisition of 11 nursing homes in France closed at an issue price of $3.80 per new unit, the lowest end of the estimated $3.80 to $3.88 range. According to an Oct 23 announcement, the private placement was oversubscribed.
The manager intends to use 88.8% of the gross proceeds of approximately $180.0 million to fully fund the proposed acquisition, while the remainder will be used to pay fees and expenses related to the placement and acquisition.
The manager had announced on Oct 22 the proposed acquisition of 11 nursing homes with 850 beds and 100% occupancy for the equivalent of $159.9 million from DomusVi Group, where the latter will continue to operate the properties under a sale-and-leaseback arrangement for 12 years.
The manager says France has an ageing population with over 22% of residents over 65 years old in 2023. Nursing homes in France are regulated, and there is no new supply till 2028. The supply is limited to one bed available for every 10 citizens over 65 years old.
The REIT will issue nearly 47.4 million new units on or around Nov 1. The acquisition is expected to be 1.6% DPU-accretive, and 4.4% net asset value (NAV) accretive. On a pro forma basis, DPU would be 15 cents in FY2023 compared to 14.77 cents, and NAV would be $2.44 per share instead of $2.34 per share. — The Edge Singapore
HSBC streamlines business divisions, names first female CFO
HSBC Holdings unveiled a broad restructuring across different business lines and geographies as newly appointed CEO Georges Elhedery embarks on ambitious cost cuts at the banking behemoth.
The lender will combine its global commercial and institutional banking operations under Michael Roberts, according to a statement. It will also create a new International Wealth and Premier Banking business to be overseen by Barry O’Byrne.
As part of the new geographic set up, HSBC will have an Eastern regional unit including Asia Pacific and the Middle East, and a Western market that includes non-ring-fenced banks in the UK, Europe and the Americas.
It also made Hong Kong and UK standalone units.
HSBC also named Pam Kaur CFO, making her the first female finance director in its 159-year history. She joined in 2013 as audit head before overseeing risk and compliance.
Some key executives are leaving as part of the reshuffle. They include Stephen Moss, who runs Middle East and North Africa; along with its head of Europe, Colin Bell. Greg Guyett, the current CEO of global banking and markets, was named chair of the strategic clients group, a newly-created role. — Bloomberg
Decade of big S&P 500 gains is over: Goldman
US stocks are unlikely to sustain their above-average performance of the past decade as investors turn to other assets including bonds for better returns, Goldman Sachs Group strategists said.
The S&P 500 Index is expected to post an annualised nominal total return of just 3% over the next 10 years, according to an analysis by strategists including David Kostin. That compares with 13% in the last decade, and a long-term average of 11%.
They also see a roughly 72% chance that the benchmark index will trail Treasury bonds, and a 33% likelihood they will lag inflation through 2034.
The S&P 500 is on track to outperform the rest of the world in eight of the last 10 years, according to data compiled by Bloomberg. Still, this year’s 23% bounce has been concentrated in a handful of the biggest technology stocks.
The Goldman strategists said they expect returns to broaden out and the equal-weighted S&P 500 to outperform the market cap-weighted benchmark in the next decade. Even if the rally were to remain concentrated, the S&P 500 would post below-average returns of about 7%, they said. — Bloomberg
