STIFEL: Triple-Net - Triple-Net REIT Comp Sheets

in ,


Industry Update
CLICK HERE FOR FULL REPORT

Triple-Net REIT Comp Sheets 8/14/2016
REITs Slightly Pullback, Sector Outperforms. The overall REIT sector pulled back 20 bps this past week and is +15.5% YTD. The triple-net sector outperformed, +50 bps for the week and is +35.5% YTD.

Dividend Yield. Triple-net REITs are trading at 17.2x 2017E FFO as compared to equity REITs trading at 18.0x. The current dividend yield for the sector is 4.50% vs. the REIT sector dividend yield of 3.61%. The 89 bps spread is 74 bps below the long-term average spread of 163 bps.
 
GNL Reports 2Q Results. Global Net Lease (GNL, $8.55, Not Covered) reported 2Q16 AFFO of $0.19/share. The portfolio is 100% leased with a weighted average lease term of 10.8 years with 60.9% of NOI generated in the U.S. and 39.1% from Europe.

Merging With ARC Global II. GNL also announced that the company is merging with American Realty Capital Global Trust II, Inc. for $648.0 million. This combined company will have 345 properties (23 million sf) in 7 countries with an EV of $3.3 billion. The transaction will close in 4Q.

SRC Privately Places Bonds. Spirit Realty Capital, Inc. (SRC, $13.40, Not Rated) privately placed $300 million of 10-Year 4.450% senior notes. Proceeds will be used to pay down the term loan and revolving credit facility.
Priced as of close 8-12-2016.

 

Jefferies Research - Germany: A Budding Real Estate Boom

in

Germany: A Budding Real Estate Boom [Sean Darby, Kenneth Chan, Irene Zhou]
A combination of firm wage growth, negative bund yields, dormant inflation and a booming current account surplus is allowing the German real estate market to reflate. In comparison to Western markets, the German property market starts from a much lower base and also relatively favorable price comparison. We are bullish on the real estate sector as well as the DAX.

REPORT

*SOME CHINESE BANKS SHORTEN TENOR OF LOANS TO DEVELOPERS: XINHUA

in

Banks including ICBC and Industrial Bank have shortened tenor of loans to real estate developers as a measure to cool down the property market, Xinhua reports, without citing anyone.

Japan housing & real estate sector - Central Tokyo office vacancy rate down in July

in

Miki Shoji released July office vacancy rate data for the five central wards of Tokyo at 11:00 JST on 10 August. The vacancy rate was 3.94% and represented the first time it had fallen below 4% since August 2008. Data pointing to tightening supply-demand conditions for office space is likely to be good news for real estate stocks. That said, we think investors are unlikely to be overly enthused about the main reason for the improvement in the office vacancy rate, which was several properties being taken off the market. Real estate stocks headed higher following the initial news of an improvement in the vacancy rate, but subsequently corrected following the release of detailed data from 13:00 JST. Minato Ward and Chuo Ward each saw the completion of a single small/midsize office building in July, while two properties in Chiyoda Ward, one in Minato, and two in Chuo were taken off the market, resulting in a net decrease in office space supply volume (new supply - properties taken off the market) of 27,372m2. In other words, there was a decline in leasable office floor space in the five central wards of Tokyo in July. The 27,372m2 fall in leasable floor space can be broken down to a 10,365m2 decline in vacant office space and a 17,007m2 decline in occupied floor space, which signifies weaker demand. This was the second consecutive month of m-m decline in overall demand. That said, we see little impact on near-term earnings or the value of properties at the major developers, as tighter supply-demand conditions have underpinned a sustained rise in rents and they have maintained high occupancy rates at their portfolios containing several highly competitive properties. While the planned completion of the large Kyobashi Edogrand office building in October 2016 and other developments risk a deterioration in the vacancy rate, redevelopment of office buildings, commercial facilities, and hotels in central Tokyo is picking up and we expect plenty of properties to continue to be demolished or otherwise taken off the market. We therefore expect the central Tokyo vacancy rate to remain favorable at least through end-2017.

REPORT