Dasin Retail Trust (DRT) is a retail property trust that has seven retail malls located in Zhongshan, Zhuhai, and Foshan, all of which are part of the Guangdong-Hong Kong-Macau Greater Bay Area (GBA).
Investment merits:
DRT has a large pipeline of assets consisting of 15 right of first refusal (ROFR) properties located across four cities in the GBA – Foshan, Zhongshan, Zhuhai, and Macau. Six of these properties are currently under development, while the remaining nine properties have been completed. The completed properties have a total gross floor area (GFA) of 683 thousand square metres (sqm), which is almost as large as DRT’s existing portfolio.
2) Huge discount to NAV
DRT latest NAV is $1.41 as of 31st Dec 2020. Current trading price is $0.73 or 0.51x Book value. This should be the only reit that is trading at such a huge discount.
3) ARA to be co-manager of Dasin Retail Trust
ARA to acquire 50.0% stake in the Trustee Manager of Dasin Retail Trust and approximately 5.0% of the total units issued in Dasin Retail Trust.
As announced by Dasin, DRT will be leveraging ARA’s established track record and expertise in REIT management, as well as its global network of investors, DRTM will work closely with ARA to drive operating performance and take the Trust into its next phase of growth.
Hopefully, with ARA as the new co-manager, the gap between NAV and share price will be smaller.
Risks
1) Debt maturing on 18th July 2021
As reported, the Trustee-Manager is in active negotiations with the banks to successfully complete the extension of the loan relating to the initial portfolio and Shiqi Metro Mall due on 18 July 2021. This seems to put a stress on the unit prices since early 2021.
2) Sponsors wavier to expire end 2021
Upon listing, its Dasin's intention to grow the DPU so that when the sponsor's waiver expires later this year, the DPU's growth should make up for the waiver.
Without the waiver, DPU for 2020 should be 2.87cts down from 3.95cts in FY2019.
Assuming no growth in DPU, the yield will be 3.93%, which is low for a Reit with overseas assets.
DRT latest NAV is $1.41 as of 31st Dec 2020. Current trading price is $0.73 or 0.51x Book value. This should be the only reit that is trading at such a huge discount.
3) ARA to be co-manager of Dasin Retail Trust
ARA to acquire 50.0% stake in the Trustee Manager of Dasin Retail Trust and approximately 5.0% of the total units issued in Dasin Retail Trust.
As announced by Dasin, DRT will be leveraging ARA’s established track record and expertise in REIT management, as well as its global network of investors, DRTM will work closely with ARA to drive operating performance and take the Trust into its next phase of growth.
Hopefully, with ARA as the new co-manager, the gap between NAV and share price will be smaller.
Risks
1) Debt maturing on 18th July 2021
As reported, the Trustee-Manager is in active negotiations with the banks to successfully complete the extension of the loan relating to the initial portfolio and Shiqi Metro Mall due on 18 July 2021. This seems to put a stress on the unit prices since early 2021.
2) Sponsors wavier to expire end 2021
Upon listing, its Dasin's intention to grow the DPU so that when the sponsor's waiver expires later this year, the DPU's growth should make up for the waiver.
Without the waiver, DPU for 2020 should be 2.87cts down from 3.95cts in FY2019.
Assuming no growth in DPU, the yield will be 3.93%, which is low for a Reit with overseas assets.
Comments