6. There are two asset acquisitions -- Shunde Metro Mall and Tanbei Metro Mall -- about to be completed. How accretive will they be to distributions in 2020 and 2021? And what factors were crucial to the decision to acquire the assets?
6.拟定收购的两个资产 - 顺德店和坦背店，即将完成收购。请问这项收购对于DRT于2020年和2021年的股息收益是否具增值性？DRT是基于哪些因素的考量而决定收购这两个资产?
They key acquisition rationale are:
a. Strengthen DRT’s presence in the GBA
b. Strategic acquisition of strong performing assets
c. Enlarged portfolio providing greater income resilience
d. Improvement in portfolio, occupancy, WALE and land lease tenure
|- Occupancy rate by NLA will be increased from 98.6% to 98.7% as at 30 September 2019
- WALE by GRI will increase from 4.1 years to 4.3 years based on 30 September 2019 numbers
- WALE by NLA will increase from 7.1 years to 7.4 years based on 30 September 2019 numbers
- Remaining lease tenure will be extended from 26.5 years to 28.2 years by NLA as at 30 September 2019
e. Attractive value proposition
|- Significant discount of over 25% to appraised values by D&P and JLL
- NPI and NAV accretive terms both with or without Distribution Waiver
f. Positive impact on the Enlarged Portfolio
- DPU without distribution waiver will increase by 19% as if the Proposed Acquisition were completed on 31 December 2019.
- NAV per Unit will increase by more than 5% post-acquisition. The proposed placement to partially finance the acquisition will increase the market capitalization and free float of DRT, which potentially improves the trading liquidity of the units.
- DRT的收入将进一步多样化，没有任何一处资产对DRT 2018财年的合并收入贡献超过23.5%，而在拟议收购前为29.1%。
7. Why a private placement instead of a rights issue?
A rights issue is typically done at a large discount to current market price and would effectively be a cash call on existing unitholders. Further, the execution period of a rights issue is typically significantly longer than a private placement and as a private placement allows DRT to place the units to new investors, as well as existing unitholders who are not substantial unitholders, aprivate placement could potentially be more beneficial to trading liquidity and market participation in DRT.
|8. The Trust has low liquidity on the stock exchange. Why do you think this is the case and will you engage / communicate more frequently with the market?
Since the IPO of DRT, the management has been very actively engaged in investor relations with the investment community and DRT has secured research coverage from research houses. DRT will continue with its active engagement and continue to seek to improve awareness with both investors and financial institutions. As it is currently envisaged that the proposed acquisition of Shunde Metro Mall and Tanbei Metro Mall would be funded through a combination of equity and debt, the proposed placement will increase DRT’s total number of units in issue, which results in an increase in market capitalization and free float and should be beneficial to the trading liquidity of DRT.
Throughout 2019, the senior management and the investor relations team reached out to investors and analysts in Singapore, Bangkok, Beijing, Hong Kong, Shenzhen and Taiwan through conference calls, one-on-one meetings, conferences and non-deal roadshows. The Trust also supported investor education through its participation in the annual REITs Symposium for the second year. Visits to the Trust’s retail malls in Zhongshan were also conducted for the investment community.
We will continue to engage the market by conducting meetings with Unitholders and the investing community, to present an update on DRT’s performance and developments while having a dialogue with them to solicit and understand their views and feedback in relation to DRT and address their concerns.
9. The Chinese government has recently issued unveiled financial support guidelines to support the development of the Greater Bay Area. Will there possibly be spillover near-term benefits for the Trust or are we looking at a longer time frame?
Recently, the Chinese central government has unveiled financial support guidelines with 26 specific measures to support the development of the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”). The guidelines were jointly issued by the People’s Bank of China (PBoC), the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission and the State Administration of Foreign Exchange.
The guidelines include 26 specific measures across five areas: promoting the GBA’s cross-border trade and facilitating investment and financing, expanding the opening-up of the financial sector, promoting the connectivity of financial markets and financial infrastructure, boosting innovation of the GBA’s financial services and preventing cross-border financial risks.
Promoting the development of the Greater Bay Area is a major strategic decision made by the Chinese government, and it is expected to have a significant and far-reaching impact on China’s reform and opening-up. These new measures will also help the social and economic development of the region as it recovers from the novel coronavirus epidemic.
During the Two Sessions, the Chinese government reiterated that it will move forward with the coordinated development of the Beijing-Tianjin-Hebei region, the development of the Guangdong-Hong Kong-Macau Greater Bay Area, and the integrated development of the Yangtze River Delta.
The development of Greater Bay Area is also one of the main key topics in the recent Two Sessions. This shows that the Chinese government attaches great importance to the development projects in the Greater Bay Area and is committed to make it a success.
DRT’s portfolio comprises 5 retail malls with a diversified tenant mix located within Guangdong Hong Kong-Macao Greater Bay Area (the “GBA”). Post-acquisition of Shunde and Tanbei Metro Malls, DRT has a strong pipeline of another 17 ROFR properties located in the GBA from itsDRT’s portfolio comprises 5 retail malls with a diversified tenant mix located within Guangdong Hong Kong-Macao Greater Bay Area (the “GBA”).
|"Post-acquisition of Shunde and Tanbei Metro Malls, DRT has a strong pipeline of another 17 ROFR properties located in the GBA from itsSponsor of which 11 are completed and 6 are under development. With the ongoing development of the GBA, the management believes that DRT will be able to benefit from the economic growth as its properties are strategically located in the heart of the GBA and is well positioned to capitalize on the growth of the region."|
The development of the GBA could lead to an increase in rental rates and property valuation for DRT in the long term. DRT will undertake a prudent investment approach to inject assets which enhances its portfolio and manage its cost of borrowing to ensure that a competitive DPU yield for its unitholders.
10. Can you tell us more about the Sponsor?
Our Sponsor is Zhongshan Dasin Real Estate Co., Ltd, one of the leading real estate developers in Zhongshan City, Guangdong Province. It is affiliated to Zhongshan Dasin Holdings Co., Ltd. (Dasin Holdings).
Founded in 1984, Dasin Holdings is a large ecological chain private enterprise with businesses in commercial, real estate, building, property service, retail, catering, food, hotel, technology, education, finance, medical treatment and land transport.
Dasin Holdings first started off in the curtain wall industry and expanded to real estate in 2001.
In 2011, Dasin Holdings has set its eyes on developing commercial real estate as its core business. Since then, Dasin Holdings has further strengthened its market position in the industry.
Currently, Dasin Holdings has more than 6,000 employees and the Group paid about RMB600 million in taxes in 2019.
我们的发起人是中山市大信置业有限公司，是广东省中山市处于领先地位的地产开发商之一。大信置业隶属大信控股有限公司（以下简称大信控股）。大信控股创立于1984年，是一家拥有商业、地产、建筑、物业服务、零售、餐饮、酒店、科技、教育、金融、 医疗、出行等实业生态链的大型民营企业。初期，大信控股只是从事幕墙业务，2001年扩展到房地产，2011年确定 “以商业地产为核心产业” 的战略目标。从那时起，大信控股进一步巩固了其在该行业的市场地位。目前员工人数已超过6,000名，于2019年缴交了将近6亿人民币的税收。
Dasin Commercial, the core business of Dasin Holdings, has development projects mainly distributed in Zhongshan, Zhuhai, Guangzhou, Foshan, Zhanjiang, Beijing, Changsha, Macau and other regions. As of today, the total area of commercial real estate under management and in operation is over 2,000,000㎡, and the reserved retail landbank is also more than 2,000,000㎡.
At present, Dasin Commercial has established strategic cooperation with 1,600 well-known domestic and foreign brands including industry giants such as Carrefour, RT-Mart, AEON, Sephora, Watsons, Starbucks, H&M, Uniqlo, MI, Pizzahut and Haidilao Hotpot. Typically, a total of about 150 tenants will be allocated in an urban complex with 100,000 ㎡. With a larger pool of brands to choose from, Dasin Commercial is able to optimise the tenant mix its retail malls according to the individual mall’s positioning.
In line with its ambition to grow its commercial real estate business, the Sponsor has chosen to list the Trust in Singapore, a global REIT listing hub with a favourable tax regime and a regulatory framework with great focus on corporate governance.
Dasin Retail Trust has launched a dedicated WeChat official account.