ASEAN Property Pulse #392 S-REITs Another Week, Another De...

Wilson.W.Ng@morganstanley.comDerek.Chang@morganstanley.comIn-LineMORGAN STANLEY ASIA (SINGAPORE) PTE.+Wilson W Ng, CFAEQUITY ANALYST+65 6834-6345Derek ChangEQUITY ANALYST+65 6834-6512ASEAN PropertyAsia PacificIndustryViewRecent Research:ESR Group Ltd: ESR Investor Day KeyTakeawaysASEAN Property: S-REITs: Another Week,Another DealMapletree Industrial Trust Ltd.: TakeawaysFrom Japan Deal BriefingThailand: Lingering uncertainty in the neartermASEAN Property: Singapore: April 2023Home Sales TrackerSingapore Equity Strategy: Fund Flows andFundamentals: April 2023ESR Group Ltd: Updating Estimates;Reiterating OWASEAN Property: 2023 Outlook: SelectOpportunitiesSingapore REITs: 2023 Outlook:Underperformance to PersistInvestor Presentation: 2023 Outlook: SelectOpportunitiesInvestor Presentation: Themes for 2023:Singapore REITsVideo: Asia 2023 | Property: All About Debtand RegulationInvestor Presentation: Singapore EquityStrategy Themes for 20232023 Singapore Equity Strategy Outlook:Calm after the storm || Sound BitesASEAN Property Pulse #392ASEAN Property Pulse #392 || Asia Pacific Asia PacificS-REITs: Another Week, AnotherDealThere has been a return of equity-funded acquisitions recently.Last week CLAR raised S$500m, this week MINT did aS$200m placement. We see scope for more such equity-funded deals given investor interest.So far this year, industrial REITs have led the pack in raising equity to help fundacquisitions (Exhibit 1), with higher target asset yields over cost of fundingsupporting positive dividend accretion (relative to office and retail, where assetyields tend to be tighter). Other REITs may also come to the market in light ofthe results of REIT placements this year.Which REIT could be next? Data centre REIT, KDCREIT (EW, KEPE.SI) has said itwill likely raise equity for potential acquisitions and the final payment tranchefor the acquisition of Guangdong DC 3 (payable in 3Q23). We also see scope forCLI-backed REITs CICT (UW, CMLT.SI) and CLAS (UW, CAPS.SI) to carry outequity fund raising to help support acquisitions (which may include Sponsor CLI'sassets), although neither has indicated any intention of doing so for now.We could see rotation into names that have already carried out placements, suchas CLAR, MLT and MINT given clarity on funding and the removal of any shareprice overhang.Morgan Stanley does and seeks to do business withcompanies covered in Morgan Stanley Research. As aresult, investors should be aware that the firm may have aconflict of interest that could affect the objectivity ofMorgan Stanley Research. Investors should considerMorgan Stanley Research as only a single factor in makingtheir investment decision.For analyst certification and other important disclosures,refer to the Disclosure Section, located at the end of thisreport.+= Analysts employed by non-U.S. affiliates are notregistered with FINRA, may not be associated persons ofthe member and may not be subject to FINRA restrictionson communications with a subject c