HI Sumer and Ediffice,
Thank you for your generous sharing. Guess you might already heard of the website
www.squarefoot.com.sg
, there is good info on land cost and break even cost of development. I find it useful.
Sumer, thank you for your detailed reply
CES' stock price rise today is probably due to the successful launch of its shop spaces at Alexandra today. I understand prices are $4,000+ psf to $8,000 psft, and demand is pretty good.
Meanwhile, for exposure to retail space, one may consider these other stocks:
1. Superbowl - Co has 63,916 sq ft of retail/recreational space at Orchard, Balestier and Bkt Timah. Last week, an owner at Orchard Towers (where SB has a big unit of 7,868 sq ft) put up both shop and office spaces for sale. The shop space is asking for $3,000 psf. Using the same price on SB's unit will value it at $23.6 million, or 7.2ct per share. Note that SB only value all its total commercial space of 63,916 sq ft at $31.3 million in its books. My estimate is that the commercial units (at $1,500-$2,000 psf for the others apart from Orchard Towers) could be worth about $131 million, implying a $100 million (30ct per share) valuation surplus.
If one were to value Zhongshan Park's retail space at $5,000 psf, and its office space at $1,600 psf, Ramada at $600,000 per key and Days at $500,000 per key, that would value the project at about $812 million, versus cost of $273 million, implying a valuation surplus of $539 million. SB's half share would be $269.5 million, or 82 ct per share. All in, SB's RNAV could then rise to as high as $1.45-$1.50.
I will not mention Hiap Hoe as I have written much about the company previously. But suffice to note that my estimate of Hiap Hoe's RNAV (based on the above ZP valuation) would be above $1.60.
2. Heeton - Co has exposure to retail through its current ownership of Sun Plaza and Tampines Mart. It also holds stakes in a few projects that will be launched over these couple of years that have shop spaces for sale, including Hong Leong Garden  (launching soon, I understand), Seletar Garden, King Albert Park and Sam Leong Mansion sites. As an example, HL Garden was bought at below $820psf. The retail space will be highly lucrative if they can fetch $3,000-5,000 psf based on prices achieved at Alexandra shop units.
Meanwhile, the company seems to be re-letting El Centro apt units, which means its redevelopment will not be in the immediate future.
KSH and TEE also have stakes in HL Garden, Seletar Park and King Albert Park and Sam Leong Mansion. Oxely is involved as the major partner in the first 3 sites, but I have not really analysed the company as I feel that on a per share basis, it may not benefit as much as the Heeton or KSH.
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CES put in highest bid for Yishun site yesterday at $794 psf. This could be quite profitable, provided no new govt measures on retail space, and demand for residential units does not fall sharply.
 Assumptions:
1. Prudent assumption of $900 psf selling price for the condo units (nearby Skies Miltonia sold at about $1,000 psf, Eight Courtyards about $800-900 psf but this was launched earlier) based on proximity to MRT (prob 10-12 mins walk) and popularity of projects above shopping centres.
2. Prudent assumption of $3,000 psf price for the shop units (vs $5-7,000 psf at CES' Alexandra site and CBRE research guy's $3,000-4,000 psf estimate in BT today).
3. Co manages to achieve 85,000 sq ft of Net saleable area in the retail portion (out of the allowed GFA of 108,500 sq ft.
4. Prudent assumption of NSA for condo of 100% of GFA instead of the 110-120% achieved at most sites because of the free balcony spaces and rooftop/garden spaces.
Based on the above assumptions (and others like costs, etc), co could make about $86m gross profit, $70.52m net, or nearly 11ct EPS. If the shops are sold at $4,000 psf, EPS will be 21.5ct!
My esitmate of its RNAV is now above $1.60
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Though it is still very undervalued at 78 cents, Chip Eng Seng is a sell to me. It doesn't have the sizzle anymore after that engineering guy stopped buying all of a sudden. Who is he anyway?
I don't think Kenyon's Tan has stopped buying. He just changed his pattern of reporting to SGX with regards to his purchases. Previously, he was reporting after each purchase, which is not necessary under SGX rules. Now, I think he only reports for every 1% point rise in his holdings, and the last time he did that was in Feb 2013, when his holdings went up 1% point from 7% to 8%.
However, subsequent to that there were some adjustment to his shareholding as advised by the MAS (with regards to stocks held by family members but whom he has no influence over) and his holding dropped to about 7.35%, or 47.647m. I am not sure if he bought any more shares after that, but apparently, his family members can continue to accumulate CES without a need for him to inform SGX, since they are "unrelated parties" that he has no influence over. So, the question now is whether his family members have been buying CES shares.
As for catalyst, I think the next one for CES is the launch of its Yishun retail shops and condo units in 2H 2013. The co has revealed that there will be 141 shops and 186 residential units. We will have to wait patiently for this launch and see if CES can do another Alexandra Centre.
Meanwhile, Newest's launch of retail spaces and residential units over the weekend was apparently well received. Bulk of the residential units were sold and a high percentage of the shops were snapped up at probably ASP of about $5,000 psf.
If all the units there are sold, I expect KSH to earn EPS of about 7ct and Heeton about 13ct from that project. Oxely's EPS is about 4.5ct.
Will have to hope that interest in commercial space remains strong until 2H when CES launches its Yishun mall.
