Japan’s Ichigo Hotel REIT slashes earnings forecast on slow recovery fears and other APAC REIT news

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Japan’s Ichigo Hotel REIT Investment Corp. (3463) has revised its January 2021 earnings forecast down, with net income slashed by 56.3% to JPY 259m.

The forecast revision cuts operating profit by 40.7% to JPY 472m and dividend per unit by 56.4% to JPY 1,015 for the period.

“The ongoing impact of COVID-19 continues to be deeply uncertain,” the REIT’s manager said. 

“Although some hotels, including a number of our hotels, have resumed operations upon the lifting of Japan’s nationwide state of emergency and the Japanese government has implemented a Go To Travel campaign to stimulate demand, recovery of both Japanese and inbound demand is expected to take some time.” (Read more)

Ichigo Hotel REIT shares closed 3.22% lower at JPY 60,100.

Index Change (%) Value at close
S&P/ASX 200 A-REIT +0.07% 1,228.10
S&P/ASX 200 -0.23% 6,006.40
FTSE ST REITS -0.01% 850.06
STI -0.37% 2,573.45
Tokyo Stock Exchange REIT +0.48% 1,683.95
Nikkei 225 -1.15% 22,397.11
Hang Seng REIT +0.50 5,388.30
Hang Seng +0.45% 24,883.14

Hong Kong: Hui Xian REIT braces for 1H 2020 net loss

Hui Xian REIT (87001) has warned investors of a net loss for the first half of 2020 after the value of its portfolio fell 5.9% to RMB 31bn during the period. 

The REIT said the portfolio devaluation was the result of the COVID-19 pandemic and its impact on the global and mainland China economies.

The profit warning comes after the trust reported a profit during the same period last year. 

“Notwithstanding the foregoing, Hui Xian REIT’s properties are held as long-term investments for stable and recurring income and the decrease in fair value of investment properties is non-cash in nature,” the REIT’s manager said. 

“The decrease in valuation itself will have no direct impact on Hui Xian REIT’s operating cash flow and income available for distribution to unitholders. The financial position of Hui Xian REIT remains stable.” (Read more)

Shares in Hui Xian REIT finished trading 0.53% lower at RMB 1.88.

Singapore: CapitaLand Retail China Trust’s total return halved in 1H 2020

Singapore-listed CapitaLand Retail China Trust (AU8U) reported a 18.6% decline in net property income to S$65.3m during the first half of 2020, according to its 1H earnings. 

Total return after tax tumbled 47.3% to S$49.8m for the period, while distribution per share fell 41.1% to 3.02 cents per security. 

“The first country to emerge from COVID-19, China reported a 2Q 2020 GDP growth of 3.2%, reversing a 6.8% contraction in 1Q 2020 as the government stepped up economic stimulus,” said Tan Tze Wooi, CEO of CRCTML.

“With CRCT’s healthy balance sheet and financial capacity, we continue to be on the lookout for accretive acquisitions to strengthen portfolio diversification, expand earning streams and ensure a more robust pipeline of quality, income-producing assets.” (Read more)

Shares in CRCT closed 2.44% higher at S$1.26.

Australia: Stockland strikes Sydney office deal with Johnson & Johnson

ASX-listed Stockland (SGP) has entered into a put and call option agreement with Johnson & Johnson to purchase the healthcare company’s office building in Sydney.

The property at 1 – 5 Khartoum Rd, Macquarie Park is a four hectare site that sits adjacent to Stockland’s M_Park commercial office project, creating a potential consolidated development opportunity worth more than $1.5bn. 

The two companies are also working on an agreement to design and develop a new 10,000sqm head office for Johnson & Johnson in Macquarie Park, bringing together the company’s 820 office-based employees from across Sydney.

“The transaction aligns with our broader strategy to up-weight our workplace and logistics portfolio and build on our $4.4 billion development pipeline, particularly through Sydney and Melbourne opportunities that enhance long-term income and valuation resilience,” said Louise Mason, group executive and commercial property CEO at Stockland. (Read more)