ARA Asset Management

[Contrarian]

> Results are ok. Recurrent up y-o-y.On a q-o-q basis, it dipped slightly but this was mainly due to suntec AEI. Overall decent.

Financial is yes decent.

Read the DBS Vickers report, launch of new REIT and a new property fund. This means likely relaunch of dynasty.

That is why the stocks head north amidst sustained buying volume...

[felixleong]

now that investors are so hungry for yield, it would be a great time to relaunch the dynasty reit

[pianist]

Ya let us hope dynasty reit will be revived this year.

[Nick]

Chinese shopping malls to outperform: ARA

Total number of mainland malls expected to jump 40 per cent to more than 4,000 by 2015.

Wednesday, 22 May, 2013 [Updated: 2:50PM]

Malls like Festival Walk in Kowloon Tong will be the benchmark for ARA Private Funds, which wants to invest in malls that can service China’s rapidly growing middle class. Photo: SCMP

Shopping malls will surpass office and residential space as the most profitable type of property investment in China over the next two to five years, thanks to the nation’s booming middle class and its fast-growing income, says a property investment firm partly owned by Asia’s richest man, tycoon Li Ka-shing.

“District shopping centres with a gross floor area of 1 million square feet or bigger, and a high footfall will offer the biggest upside with limited risks for private funds in the coming years in the mainland,” said Ng Beng Tiong, ARA Private Funds chief executive.

Ng, a former investment banker, is targeting an internal rate of return of 20 per cent by building and operating shopping malls in the mainland through the newly-raised US$441 million Asia Dragon Fund II.

HSBC forecasts that another 93 million Chinese households will join the middle class by 2015, while the China Chain Store and Franchise Association separately expects the number of mainland malls to jump 40 per cent to more than 4,000 by 2015.

However, not all of these new malls will provide decent returns, so real estate funds will have to be highly selective, Ng said, warning that the presence of luxury brands did not guarantee fat margins.

“We don’t go for malls that are full of Guccis and LVs (LVMH luxury goods), but (for) the ones that serve the daily needs of a large catchment of residents and office workers,” Ng said, citing its Asia Dragon Fund I’s Dalian shopping mall and the Festival Walk in Hong Kong’s Kowloon Tong as references.

Of the two private funds closed last year, Ng plans to invest up to 70 per cent of the US$441 million Asia Dragon Fund II in China, of which over a half would go to shopping malls that serve the growing middle class.

“It is the middle income group that is growing faster in terms of their wealth and buying power, which translates into a very strong fundamental support for shopping malls”, he said.

The firm, in which Cheung Kong holds a 14 per cent stake, is looking to expand its footprint to key tier-two cities, such as Hangzhou, Suzhou, Guangzhou, Shenzhen, Chongqing, Chengdu and Wuhan. It already had projects underway in Shanghai, Beijing, Dalian and Nanjing, he said.

By 2015, the retail market would double in China’s key tier-two cities, according to HSBC research, and shopping malls would account for 74 per cent of the retail market in these cities, up from 51 per cent currently.

Singapore-based ARA managed around S$22.1 billion (US$17.6 billion) of assets as of the end of last year, according to its annual report.

The company is an affiliate of the Cheung Kong Group and apart from its private fund business, it also runs some of Asia’s most popular REITS (real estate investment trust), including Hui Xian REIT and Fortune REIT.

http://www.scmp.com/business/companies/a...erform-ara [Full Article]

(Vested)

[Nick]

http://infopub.sgx.com/FileOpen/JVAandIn...eID=247976

ARA forms JV with Kilcor Property Group and Joda Holdings to explore possible REIT listing in ASX.

(Vested)

[pianist]

Thanks for the post. Like to ask the news said it or its funds already have some projects underway in key cities. Does it mean construction and property development projects? Or just running of malls?

indeed middle class is force to come, currently in a tied two city, live their lifestyle, sleeps at 1030 wake up at 430. Realli healthy, the sun already up here before five. Room temperature always below 25 in summer now averaging 18-25, conducive for sleeping. Go to fitness centre everday with friends here. Gym annual pass costs 3700rmb, expensive i think using their salary as a guage, but still many sign up.

[greengiraffe]

ARA giant meh?

Singapore giant to back retail float

Nick Lenaghan and Ben Wilmot
448 words
19 Jul 2013
The Australian Financial Review
AFNR
English
Copyright 2013. Fairfax Media Management Pty Limited.
Listed Singapore property funds giant ARA is backing a $550 million listed retail trust, to be run by property veterans David Blight and Terry Kilmartin and seeded with sub-regional malls.

Within days the proposed trust is expected to announce transactions to acquire four shopping centres that CFS Retail Property Trust is selling, along with another coming out of a Federation Centres managed syndicate.

Mr Blight, who headed APN Property Group before stepping down earlier this year, has established a management vehicle for the trust in partnership with Mr Kilmartin, a ­private investor with a long history in shopping centres.

The two property stalwarts have previously worked on projects together.

ARA, which specialises in property trust management, is also invested in the joint venture.

In addition to their joint management vehicle, the three parties are expected to invest close to $30 million in the trust ahead of a $400 million capital raising, to be fully underwritten by Moelis & Co. Victorian mallsThe new trust is targeting sub-regional malls and is expected to pull together the initial five-asset portfolio on an investment yield of a little more than 8 per cent.

The four assets from the Colonial-managed fund are all Victorian – Corio, Brimbank, Altona Gate and Rosebud Plaza.

There is a potential earnings upside from the malls under the refreshed management.

Federation manages the NSW asset Seven Hills, which is worth close to $90 million. It was marketed by Jones Lang LaSalle and Colliers International, and Federation has told unit holders it would consider offers.

It is expected the new retail vehicle will deliver an initial earnings yield of around 8.5 per cent, with an earnings growth target of around 3 per cent, and gearing at 34 per cent, sources said.

Sub-regional shopping centres, anchored by non-discretionary retailers such as supermarkets, are proving popular among investors, who are on the hunt for yield.

The support of ARA, which has around $19 billion in funds under management and runs property funds in Asia, is expected to send a positive message to prospective local and regional investors.

The listed Singapore manager manages REITs listed in Singapore, Hong Kong and Malaysia as well as private funds investing in real estate.

ARA is affiliated with the Cheung Kong Group, which is chaired by Li Ka-shing, one of Asia's richest men.

That investment pedigree is expected to bolster support for the fledgling fund, as it seeks to lock in cornerstone investors. The fund managers are expected to take their offer to the retail investment market locally before a series of road shows in Asia.


Fairfax Media Management Pty Limited

Document AFNR000020130718e97j0001b

[Nick]

Fortune Reit eyes acquisitions of shopping malls

Trust upbeat on sales as it seeks to benefit from low interest rates and declining gearing ratio

http://www.scmp.com/business/companies/a...ping-malls [Full Article]

(Vested)

[greengiraffe]

If these are the assets that ARA led consortium is floating off as REIT on ASX, then one should seriously examine...

Not vested

http://www.businessday.com.au/business/c...2qeu2.html

CFS Retail aims to sell lagging assets
Date
July 23, 2013
Carolyn Cummins
Carolyn Cummins
Commercial Property Editor
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Entertainment can still turn a dollar.
Entertainment can still turn a dollar. Photo: Viki Lascaris
In coming months, several retail real estate investment trusts will be offered as new floats, at a time when the underlying consumer sector remains under pressure.

But analysts have said that while shoppers remain cautious, owning bricks-and-mortar retail assets is still favoured.

This is due to the rising land values and the fact landlords can generate income from a variety of areas in a shopping centre, such as food courts, cinema ticket sales, international fashion brands and mobile devices. That helps to offset falling rents from discretionary goods such as mid-range fashion, homewares and high-end jewellery.

In the past six months, more than $3 billion of retail assets have changed hands.

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CFS Retail has added to the momentum with the conditional sale of four shopping centres in Victoria to the proposed Pacific Retail REIT, which is looking to float in the next few months with an initial raising of close to $400 million.

Late last week, the US private equity group Blackstone, filed a registration statement with the US Securities and Exchange Commission relating to a proposed float.

Blackstone could raise as much as $US700 million ($761 million) from a public sale of the 522 US shopping centres it acquired in 2011 in its $US9 billion rescue of Australia's Centro Properties.

The price is yet to be disclosed, but the underlying value of the real estate is about $US13 billion.

According to brokers, the sale by CFS Retail of the Victorian centres in Altona Gate, Brimbank, Corio and Rosebud Plaza, for $446.5 million, was positive as the cash would be used to reduce debt and for new developments.

UBS analyst James Besson said the sale of the assets addressed the perception of CFS Retail's ''long tail'' portfolio of low-quality assets.

''However, the portfolio remains under pressure as illustrated by the net operating growth implied by the guidance of 1 per cent to 1.5 per cent comparable growth from CFS Retail, which in our view is an industry-wide trend,'' Mr Besson said.

''The transaction reduces gearing by 3.5 per cent to 4 per cent with near-term acquisitions the likely focus, such as additional direct factory outlets, which we support given its growth outlook versus regional shopping centres.

Bank of America Merrill Lynch property head Simon Garing said he was positive on the transaction which reduced CFS Retail's exposure to ''B-grade'' shopping centres (25 per cent to 21 per cent of the portfolio) and provided flexibility to pursue alternate asset acquisitions.

''The 'upgrading' of the portfolio will reduce CFS Retail's exposure to malls likely to experience negative NOI growth. We do however note the uncertainty of the deal given it is conditional on equity markets being supportive of a new IPO,'' Mr Garing said.

CFS Retail fund manager Michael Gorman confirmed the sale agreements were conditional on Pacific Retail REIT successfully raising capital via a public offer and therefore remained uncertain.

''Assuming that the IPO is successful, we anticipate that the transaction will settle in early September,'' Mr Gorman said.

[greengiraffe]

Float first, then Pacific will go for growth

BY:SARAH DANCKERT From: The Australian July 27, 2013 12:00AM
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130727 blight
Pacific Retail REIT director David Blight. Picture: David Geraghty Source: TheAustralian
THE $550 million-plus Pacific Retail REIT has aspirations for future growth, says trust director David Blight, but will first turn its focus to repositioning the five shopping centres the trust owns.

Mr Blight has set his sights on getting a float of Pacific Retail REIT away in September. It promises to be the largest property float so far this year if successful.

Pacific Retail REIT will initially hold five sub-regional shopping centres, four of which the trust is in the process of buying from CFS Retail Property Trust and another it has purchased from Federation Centres.

Mr Blight said the fund would look to grow into a larger trust through acquisitions, but that would be further down the track.

"Our first priority is to deliver what we're telling investors that we're going to deliver," he said. "We have plans for each of the investors and you couldn't go back for more capital until you've got some runs on the board. Equally, of course, we'd also like to grow the trust. So hopefully the performance of the trust will allow us to grow."

The new trust is expected to produce an earnings yield of about 8.5 per cent and will be geared at 34 per cent.

Mr Blight said that the trust had targeted sub-regional shopping centres because they weren't overpriced and were still delivering strong income returns to investors. The portfolio of five centres Pacific REIT has purchased was on a yield of 8.4 per cent, he said.

"These are meaningful assets and they're going to respond well to some pretty intensive management," he said.

"All of these centres have strong catchments in their primary trade areas. Each of the centres dominate their catchment, they're not withering on the vine, so to speak. They trade well."

The centres are Altona Gate and Brimbank shopping centres in Melbourne's fast-growing western suburbs, Corio shopping centre in Geelong and Rosebud Plaza on Mornington Peninsula in Victoria. Pacific Retail will also own a fifth centre, Seven Hills, in Sydney. Mr Blight, who in February resigned as managing director of APN Property Group, was formerly global chairman of ING Real Estate based in The Hague. He has teamed up with Queensland-born developer and property investor Terry Kilmartin to run the trust.

Mr Blight brings extensive knowledge of capital management and investment strategy. Mr Kilmartin is a prolific private developer and investor who has spent much of his career at the retail coalface building and operating supermarkets and larger shopping centres around Australia. "Terry's got amazing knowledge of retail property," Mr Blight said. "Terry and the team he is bringing with him have owned shopping centres for over 20 years. They're very hands on, it's very intense management. They're bringing their private expertise into a public vehicle and that's exciting."

The fund has Singapore's ARA as a key institutional investor and Mr Blight, along with Mr Kilmartin, will also invest in the trust.

Mr Blight said that there had been demand from institutional investors in Asia.

The management team has also received a strong response from domestic institutions and expects a portion of the capital raising to be taken up by retail investors.

The endeavours of Mr Blight and Mr Kilmartin come as the former managing director of Mirvac, Nick Collishaw, prepares to float another property trust, Centuria Property Trust, which is seeded with Northpoint Tower in North Sydney. Both the Centuria and Pacific Retail floats follow the IPOs of Arena REIT, 360 Capital Industrial Trust and Woolworths property spin off SCA Property Group over the past 12 months.

This week the Commonwealth Bank announced it would cut loose its property trusts with an internalisation proposal which is expected to result in a round of takeovers.