Exclusive Insights: Interview with ALOG REIT CEO, Ms Karen Lee


In this protection of the ESR-REIT and ARA LOGOS Logistics Trust merger, I had the chance to talk to Ms Karen Lee, CEO of ALOG REIT at the 8 November 2021.

Proposed merger of ESR REIT with ARA LOGOS Logistics Trust: Resources


[Editors note: Cold Storage Facilities are facilities that store frozen or chilled goods, such as frozen food, chilled food and pharmeceuticals. Demand for such facilities around the world is high, especially nowadays since the COVID-19 Vaccines are in high demand and most of them require such facilities.]

Kenny: I heard that Cold Storage Logistics are a brand new asset magnificence, similar to Data Centers. What do you consider the long run enlargement of this sector, and would there be any rerating of the REIT as this asset magnificence is added into your portfolio?

Karen: I would not say Cold Storage and Data Centers are the similar, however they’re each specialised sectors. If you glance around the different Industrial REITs in Singapore, now not lots of them have devoted Cold Storage amenities. ALOG has one such facility (ALOG Cold Center at 2 Fishery Port Road). Depending on business necessities, those amenities will also be configured accordingly (freezer, chiller, ambient and so forth.). Right now, particularly on account of COVID, there’s a scarcity of Cold Storage amenities islandwide, which means our facility has an occupancy with reference to 100%.

However, landlords usually don’t construct such amenities since the capex could be very top. Some commit just a portion in their belongings to have Cold Storage amenities. Since our present sponsor is a logistics developer (LOGOS), they have got enjoy in construction specialised amenities akin to Cold Storage.

Kenny: For Cold Storage Facilities, which international locations have upper call for for such facilityies?

Karen: All international locations have top call for for such amenities. Due to COVID and the provision chain disruption, there is a scarcity in Cold Storage. You’ll be shocked at how a lot frozen meals and pharmaceutical merchandise are being saved within the tournament of long run provide chain disruptions.

Kenny: So within the close to time period, is ALOG making plans for acquisitions of Cold Storage Facilities (or conversion to such amenities) or handiest when the Merger with ESR,REIT is whole?

Karen: Right now we’re at a standstill (because of the continued merger) however we do have tenants who’re enquiring about changing to Cold Storage amenities and, we’re nonetheless exploring the ones on a case-by-case foundation.


Kenny: Regarding the Merger, is there a Plan B for ALOG, in case the merger with ESR REIT does now not undergo?

Karen: If the merger does not undergo, it will be industry as same old for ALOG. Having stated that, we’re somewhat assured the merger will undergo, as we’ve got articulated the deserves of the merger for each REITs. On our personal, we will nonetheless develop, albeit at a slower tempo. ALOG, as a fairly small REIT, can not perhaps achieve massive transactions at one pass, we’re going to have to damage it up. However, a bigger REIT will get pleasure from the economies of scale. Investors want to see that scale is essential for REITs to develop.

Post-merger, we’ve got a transparent trail to develop ESR-LOGOS REIT. Our enlarged sponsor has over US$50 billion in New Economy AUM and US$10 billion in Development Work-in-Progress New Economy pipeline. It is an excessively massive pipeline for any REIT sponsor to supply. I’ve additionally been speaking to buyers that for ALOG holders, you aren’t promoting out, however relatively you might be rolling over 90% of devices to an enlarged platform, in addition to capitalizing on current returns with the ten% money.

Kenny: Only a bit of greater than a 12 months in the past, you took over as ALOG‘s CEO. Is this succession and the merger pre-planned?

Karen: Back after I took over as CEO of ARA LOGOS Logistics Trust (Formerly Cache Logistics Trust), the one transaction that came about used to be handiest ARA’s acquisition of LOGOS in March final 12 months. The determination to merge with ESR REIT used to be as contemporary as 2 months in the past, the place Adrian and I mentioned the deserves of a possible merger between the 2 REITs after the proposed merger of ESR Cayman and ARA Asset Management used to be introduced.

The greatest problem transferring ahead is how temporarily we will execute the plans and methods we’ve got been articulating to the unitholders, when it comes to acquisitions.

Kenny: What do you assume would be the greatest problem that your crew will face post-merger, and the way will your crew plan to unravel them?

Karen: We had been somewhat busy with the transaction, due to this fact we’re nonetheless in the course of discussions in regards to the integration procedure. We want to review the skills to be had on all sides and select the most efficient guy for the process, for the brand new roles the enlarged REIT can have.

I’d say the largest problem transferring ahead is how temporarily we will execute the plans and methods we’ve got been articulating to the unitholders, when it comes to acquisitions. We have now not been given a timeline to take action however it’s going to be necessary for us to execute them temporarily so that we might be credible in turning in what we stated we might do. We would additionally got down to be integrated in additional indices one day, bettering buying and selling liquidity and visibility to institutional buyers, and in time to return, be in the similar league as probably the most larger gamers.

Kenny: Investors and Analysts are taking a look at whether or not you’ll execute what you might have promised.

Karen: I feel Adrian and I’ve delivered what we’ve got promised for our respective REITs. For ALOG, we articulated 3 key duties we might do, particularly Acquisitions, Divesting Non-Core Assets and AEIs. Once we delivered them, ALOG had a just right re-rating when we performed those company movements.

Kenny: Would you foresee quick acquisitions to be performed submit merger?

Karen: Out of the over US$50 billion in New Economy AUM and US$10 billion in Development Work-in-Progress New Economy pipeline throughout 10 international locations the place the Sponsor has presence in, US$2 billion of those are core property which might be right away visual and executable. Adrian and I will be able to have a look at the cS$2 billion of right away visual and executable New Economy pipeline we’ve got been speaking about, to spot which property are able to be injected into the REIT.


ARA LOGOS Logistics Trust’s stellar efficiency in comparison to different Industrial S-REITs.

In the previous 18 months, we’ve got maintained top portfolio occupancy charges, accomplished certain apartment reversion, divested non-core property to rebalancing our portfolio, and controlled to scale back leverage and decrease our all-in financing prices. We completed Asset Enhancements to verify our property stay aggressive and related to our tenants.

Kenny: I want to congratulate you at the nice efficiency of ALOG for the previous 12 months, beating different Industrial S-REITs. What do you assume you might have accomplished proper?

Karen: I should thanks for those type phrases. When I took over in August 2020, the quick job used to be to support the efficiency of the REIT. Prior to me taking on, the rebranding of Cache Logistics Trust to ARA LOGOS Logistics Trust signed a contemporary get started, with a brand new sponsor (LOGOS) onboard. LOGOS demonstrated its dedication to develop the REIT, and alignment of pursuits with unitholders, by the use of asset injection. We finished our first portfolio acquisition in Australia previous this 12 months, and LOGOS backstopped all of the preferential providing once we did the fund elevating for that acquisition.

Coming from an operator background, it’s in reality necessary to support the portfolio working metrics. In the previous 18 months, we’ve got maintained top portfolio occupancy charges, accomplished certain apartment reversion, divested non-core property to rebalancing our portfolio, and controlled to scale back leverage and decrease our all-in financing prices. We completed Asset Enhancements to verify our property stay aggressive and related to our tenants. The marketplace can see that we’ve got installed vital efforts to ship those effects, and the effects had been proven. I’m happy with my crew in serving to us to ship the stellar result of ALOG, developing worth for our unitholders. Once once more, being clear to our unitholders and turning in what we’ve got defined could be very vital. For the enlarged REIT itself, we might be following a an identical technique.

Kenny Loh is a Senior Financial Advisory Manager and REITs Specialist of Singapore’s best Independent Financial Advisor. He is helping shoppers assemble diverse portfolios consisting of various asset categories from REITs, Equities, Bonds, ETFs, Unit Trusts, Private Equity, Alternative Investments, Digital Assets and Fixed Maturity Funds to reach an optimum possibility adjusted go back. Kenny could also be a CERTIFIED FINANCIAL PLANNER, SGX Academy REIT Trainer, Certified IBF Trainer of Associate REIT Investment Advisor (ARIA) and likewise invited speaker of REITs Symposium and Invest Fair. You can sign up for my Telegram channel #REITirement – ​​SREIT Singapore REIT Market Update and Retirement similar information. https://t.me/REITirement



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