Excerpts from analyst's report

Philip Securities analyst: Caroline Tay

ferdinandsadeli_4.14Ferdinand Sadeli, executive director and CFO of Sinarmas Land. NextInsight file photo.Sinarmas Land Limited (SML) has entered into an agreement for the sale of the property known as New Brook Buildings, 8-18 Great Queen Street, London, United Kingdom for an aggregate cash consideration of GBP113,400,000 (equivalent to SGD233,717,400).

The property is a freehold Grade A office building consisting of a 12-storey tower connected to a 9-storey wing, with a NLA of approximately 99,911 sqft and estimated to contribute to about 2.3% of the bottom-line based on results for the nine-months period ended 30 Sep 2014.

With the recent rise in the capital value of the London commercial properties, the management took the timely opportunity to realise the attractive rate of return for this investment and unlock the capital gain for future investments.

This transaction is expected to reap a gain on disposal of approximately SGD73mn and will further strengthen the healthy balance sheet.

We believe the management still maintains its goal to grow recurring income and will continue to source for accretive commercial investments in the gateway cities.

We like SML for its superior profit margins with huge potential of value creation from its vast land bank. We maintain our BUY rating with TP$0.96.

Recent story: OSK-DMG: Deep value in SINARMAS LAND, target price $1.01


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