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UOB KayHian Jumbo Group (JUMBO SP) Opens A New Non-Seafood Outlet; Riverside Expansion Completed Jumbo opened a new bak kut teh outlet in RWS and completed the expansion of its Riverside outlet. We see potential JV and franchise opportunities down the road which would increase its brand equity and provide recurring income streams should these ventures materialise. There was a slight slowdown for a week or two due to the Zika panic in Singapore but business has returned to normal as fears of a Zika outbreak have subsided. Maintain HOLD and DCF-based target price of S$0.60. Entry price: S$0.54. |
CIMB UOL Group On a buying spree ■ Buying two properties, in UK and Singapore, worth an attributable S$380m ■ Total capital deployment of S$710m in the past 12 months supported by strong balance sheet ■ Building up recurring income with latest Holborn Island purchase ■ Raintree Gardens enbloc site could extend residential earnings visibility over the next few years ■ Maintain Add with slightly higher target price of S$7.97
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OCBC UOL GROUP | BUY ACQUIRES RAINTREE GARDENS EN-BLOC
- S$334.2m en-bloc acquisition - Likely redevt into 600-750 unit condo - Attractive site with decent price Right off the bat from its GBP229.6m acquisition of 120 Holborn in London UK, UOL announced that it has, through a JV with UIC Ltd, successfully acquired the Raintree Gardens residential development at Potong Pasir Ave 1 for S$334.2m through an en-bloc tender. The sale price translates to about S$797 psf per plot ratio on the potential gross floor area, including an estimated differential premium to top up the lease to a fresh 99 years and for redevelopment of the site to a gross plot ratio of 2.8. The site will likely be redeveloped into a 600-750 unit condominium project. We believe this is a decent price for an attractive river-facing site near the up-and-coming Bidadari area and are positive that the group has successfully replenished their land-bank in a competitive environment. Maintain BUY with an unchanged fair value estimate of S$7.30.
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DBS Vickers Singapore Property Sector En-bloc deals rock the market UOL/UIC acquires Raintree Gardens, 2nd en bloc of a privatised former HUDC estate this year, for S$334m; potentially increasing GFA by 43% Estimated breakeven cost of S$1,160-1,260psf vs Poiz Residences’ median price of S$1,447 (16-25% margin) The increasing en-bloc sales implies i) developers are hungry amid a dearth of land bank supply in Singapore, ii) developers have a more positive medium-term outlook. Upper Serangoon Road GLS (estimated to launch in December 2016) would be an interesting land tender to keep an eye on Heeton divests iLiv@Grange en bloc at a loss to avoid a doubling of QC charges |
