These real estate players are on shaky ground as Brexit looms

CDL, ART, KDCREIT, and CDLHT have notable UK exposures.

The results of a Brexit referendum remain hazy, but market jitters are sure to come before the referendum on June 23, triggering volatility specifically to real estate players with UK exposure.

According to a report by OCBC research, among the real estate firms are City Developments, which has 10.8% of its assets based in the UK as at end FY15, including recent acquisitions of Teddington Studios and Stag Brewery land sites.

11% of the group’s debt is also denominated in GBP (net currency exposure of S$382.6m) and OCBC research noted that a 10% strengthening of GBP against SGD would have resulted in additional S$38.2m PBT over the year.

Ascott Residence Trust, meanwhile, owns four serviced residences in UK, which constituted 12.4% of ART’s total asset valuation as at end FY15 and 13.0% of FY15 total gross profit OCBC added.

“Keppel DC REIT (KDCREIT) owns one data centre in London, which formed 7.5% of the trust’s total assets as at 31 Dec 2015. We estimate that this UK data centre contributed 6.6% to KDCREIT’s NPI in 2015,” OCBC said.

“Finally, for CDL Hospitality Trust (CDLHT), as at end 1Q16, 5.4% of assets (Hilton Cambridge City Center) and 3.9% of 1Q16 NPI were derived from the UK. The trust also has a S$126m floating bridge loan in GBP due Aug 2016 (13.7% of total debt),” OCBC added.