Perennial Holdings announces SGD 3Y senior unsecured notes at FPG of 5.75%

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Perennial Holdings Pte Ltd (“Perennial”) plans on issuing new SGD 3-year senior unsecured notes at the final price guidance (“FPG”) of 5.75%. It is expected to be issued on 7 April 2025, with a maturity date of 7 April 2028. The proceeds will be used for general corporate purposes, including refinancing of existing borrowings and financing of working capital, investments and/or capital expenditure requirements of the Group. We wish to highlight that Perennial is a private company, and that the new issuance is made available only for accredited and institutional investors.

Perennial is an integrated real estate and healthcare company headquartered in Singapore. It holds properties across China, Singapore, Malaysia and Indonesia, with a relatively significant presence in China (approximately 74.5% of total assets as of 31 December 2024). Wilmar International holds an indirect 16.86% interest in Perennial Holdings through WCA Pte. Ltd., a wholly-owned subsidiary of Wilmar International. Other significant shareholders include Mr. Ron Sim (owner of OSIM and TWG brands), Perpetual Capital and Bangkok Bank.

Perennial’s portfolio in China comprises six High Speed Rail (“HSR”) large-scale transit-oriented developments (“TODs”), adjacent to the country’s largest HSR stations. Five of these TODs are healthcare-centric, with the other one focusing on commercial. In Singapore, its portfolio comprises iconic properties, such as The Skywaters, Golden Mile Singapore, Capitol Singapore, CHIJMES, Perennial Business City and Caldecott Hill.

For the year ended 31 December 2024 (“FY24”), Perennial reported a drop in both results from operating activities and overall profits year-on-year (“YoY”). Results from operating activities fell from SGD 182.1m in FY23 to SGD 119.7m in FY24, while overall profits fell from SGD 67.6m in FY23 to SGD 20.5m in FY24. Performance was affected by the decline in gross profit (-25% YoY) due to the absence of sales contributed from development properties, offset by an increase in property rental and related income.

Additionally, Perennial saw a drop in other income owing to (1) lesser revaluation gains (FY24: SGD 45.5m vs FY23: SGD 57.2m) and absence of gains on the acquisition and disposal of subsidiaries (FY23: 32.5m). On an adjusted basis, which excludes fair value gains, including proportionate contribution from associates and joint ventures, and repayment of shareholder loans, Perennial reports a rise in adjusted EBITDA from SGD 146.8m in FY23 to SGD 223.6m in FY24. 

Perennial’s management strongly emphasised their focus within the healthcare sector, integral to their overall real estate development plans. Revenue contributions from healthcare have more than tripled since Perennial’s privatisation in 2019 and it continues to see significant developments in the healthcare scene.

In China, the management highlighted the ongoing development of the HSR Medical Cities in Kunming, Xi’an and Chongqing – while in Singapore, Perennial is serving as the developer and operator of Parry Assisted Living Care,  a new first-of-its-kind private assisted living project at Parry Avenue. The management sees a strong future focus on their eldercare business model in China, with now more than 14,500 operating eldercare beds and another 10,000 beds in the pipeline.

For Perennial’s credit profile, debt metrics are generally stable across the year albeit being on the riskier side. Total borrowings saw a marginal increase YoY, up from SGD 3,153m in FY23 to SGD 3,199m in FY24. Almost all of the Group’s borrowings are on a floating-rate basis (~97%) and the majority of the borrowings are secured loans (~64%). While the Group has a small position of cash and cash equivalents (SGD 107.0m) relative to the total borrowings, we see minimal concerns over refinancing needs at the moment as the Group is able to tap into secured borrowings and refinance on a rolling basis. That being said, we believe Perennial’s credit risk still belongs on the high side with net gearing at ~71% and total-debt-to-total-assets ratio at ~38%.

Table 1: Comparable real estate SGD papers

Issues	Ask Price	Yield to Maturity	Years to Maturity
TSHSP 7.500% 02Nov2027 Corp (SGD)	104.250	5.71%	2.60
WINGTA 4.800% 26Oct2028 Corp (SGD)	104.350	3.50%	3.59
WINGTA 4.380% 03Apr2029 Corp (SGD)	102.900	3.60%	4.02
OUESP 4.000% 08Oct2029 Corp (SGD)	99.883	4.03%	4.54
HOBEE 4.350% 11Jul2029 Corp (SGD)	101.200	4.04%	4.29
PREHSP 5.750% 07Apr2028 Corp (SGD)*	100.00	5.75*	3.00
Sources: Bondsupermart, iFAST Compilations. Data as of 27 March 2025. *Yet to be issued

At the FPG of 5.75%, Perennial’s new issuance stands pretty attractive across the various options in the SGD real estate space. The higher yield is quite justifiable for the higher credit risks as compared to other real estate issuers, i.e. GuocoLand, OUE, Wing Tai and Ho Bee Land. Against a closer peer, Tuan Sing with the TSHSP 7.500% 02Nov2027 Corp (SGD), we believe Perennial stands out with a stronger underlying performance, especially with future developments focusing on the elderly healthcare space. Perennial’s new issuance can be a consideration for investors comfortable with the credit risk, and also its significant exposure to China real estate. On this note, Perennial did not see valuation losses arising from its China properties, likely because of their integrated nature with the country’s critical mode of transport – the HSR.

Once again, we wish to highlight the private company nature of Perennial Holdings. While Perennial continues to update investors with an annual report, the lack of frequent reporting and news announcements on SGX means greater opacity to its business operations and performance. For investors who are interested in reviewing Perennial’s FY24 performance, do refer to the offering circular available on the prelaunch bond factsheet page found here. 

Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a position in HOBEE 4.350% 11Jul2029 Corp (SGD) and TSHSP 7.500% 02Nov2027 Corp (SGD). The analyst who produced this report holds an NIL position in the abovementioned securities.

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