FRASERS Centrepoint Trust (FCT) is now ready to inject another two retail malls into its portfolio, chief executive Christopher Tang told BT recently.

While Mr Tang did not say when exactly the two malls – YewTee Point and Northpoint 2 – are likely to be bought over from parent company Frasers Centrepoint Ltd, the trust and the malls are all ‘ready’, he said.

Both malls are now stable income-producing properties.

YewTee Point, located next to Yew Tee MRT Station, has seen almost a million shoppers since it soft opened in March this year. The mall, which has a net lettable area of 73,000 square feet, has achieved an occupancy rate of 98 per cent.

Northpoint 2 at Yishun – an extension of Northpoint, which is already part of FCT’s portfolio – is also now seeing good occupancy and footfall, Mr Tang said.

Buying the malls at this time will be yield-accretive for the trust, he said. Previously, as FCT was trading at higher yields (due to a lower share price), buying the properties would not have been yield-accretive.

‘FCT is now trading at 5 per cent above net asset value and FY2010 dividend per unit (DPU) yield of 6.4 per cent, which could mean that acquisition of Northpoint 2 and YewTee Point from its sponsor (about $300 million) could be accretive,’ wrote UBS Investment Research analysts Regina Lim and Michael Lim in an Oct 27 note.

Analysts have also said that FCT can be expected to raise equity for acquisitions soon. The UBS analysts, for example, expect FCT to raise around $130-$170 million in the next four months for acquisitions.

Said CIMB analyst Janice Ding: ‘We believe FCT will use equity and debt to fund its acquisition of Northpoint 2 and Yew Tee Point in a bid to increase its stock liquidity. We have assumed 25 per cent debt and 75 per cent equity for the acquisition.’

The planned injection of the two pipeline assets is also expected to expand FCT’s asset base significantly. UBS estimates that the exercise could lift portfolio size by 27 per cent to around $1.4 billion.

YewTee Point was officially opened last Saturday. With the mall, Frasers Centrepoint unveiled its new ‘neighbourhood’ mall concept.

A neighbourhood mall, Mr Tang explained, is more intimately-sized than a suburban mall and will serve the needs of its immediate community: ‘For instance, residents can enjoy early morning or late-night grocery-shopping at anchor tenant NTUC FairPrice supermarket, which opens its doors at 7am and closes at 11pm.’

Some F&B tenants will also be open until the early hours of the morning, he said.

Source : Business Times – 2 Nov 2009

* Sets price range of $1.98-$2.39 a share: email
* To sell 1.165 billion, or 30% of shares outstanding
* CapitaMalls owns 86 properties in Asia
* CapitaLand eyes growth in China, Vietnam

CapitaLand’s Asian shopping malls unit is looking to raise about US$2 billion in its Singapore initial public offering, a move that will help boost the warchest of Southeast Asia’s biggest property developer.

CapitaLand will float a 30 per cent stake in its wholly owned unit CapitaMalls Asia Ltd, which has 86 retail properties valued at around $20.3 billion (US$14.5 billion) in Singapore, China, Malaysia, Japan and India.

The listing move comes at a time when the pipeline for new offerings is becoming crowded and a string of Chinese real estate IPOs have received a lukewarm response from investors.

Malaysia’s Maxis is trying to raise US$3.7 billion in its initial public offering in Kuala Lumpur, the biggest in Southeast Asia for more than a decade.

In Hong Kong, Longfor Properties is seeking to raise US$916 million a few days after Evergrande Real Estate Group raised US$729 million in its scaled-back IPO.

Also, shares of department store chain Myer Holdings Ltd tumbled as much as 9 per cent on their debut on Monday in its US$2 billion float, Australia’s biggest in two years.

Analysts said the listing of the unit will boost CapitaLand’s ability to buy and build more property assets in Asia.

CapitaLand wants China to account for 35-45 per cent of its assets from 28 per cent now, and is seeking to increase Vietnam’s share to 5-10 per cent of assets.

Not cheap?
CapitaMalls said it will sell 1.165 billion shares at an indicative price range of $1.98-$2.39 a share, according to an email sent to potential investors, which was seen by Reuters.

‘We like the stock that comes with the pan-Asia theme. The way it’s structured gives investors cashflows from the developed malls and upside from the greenfield projects,’ said Neo Chiu Yen, equity research asia, ABN Amro Private Banking.

‘But the pricing looks a bit ‘full’ to me. It won’t be cheap, but it should give investors some incentives to participate.’

Management roadshows are planned between Nov 3 and Nov 16 and pricing for the international tranche of the offering is due on Nov 16, the email said.

The Singapore public offer period is between Nov 18 and Nov 23. Listing will likely take place on Nov 25, the email said.

‘Our strong financial position and capital structure will provide us with the financial flexibility to fund our growth and expansion,’ the CapitaMalls prospectus, filed on Monday, said.

‘These opportunities include acquisitions of land for greenfield projects, brownfield projects and completed malls, asset enhancement initiatives and other merger and acquisition opportunities in Asia.’

JPMorgan is the sole financial adviser, and issue manager with DBS. The two banks are also bookrunners with Deutsche Bank and Credit Suisse, according to the prospectus.

Source : Business Times – 2 Nov 2009

K-REIT Asia says it has completed the acquisition of levels 20 to 25 of Prudential Tower located at 30 Cecil Street.

K-REIT Asia says it paid $106 million for the property and the acquisition will be funded by a bridging loan facility of up to $110 million from Kephinance Investment.

K-REIT Asia says the bridging loan is to be repaid from the net proceeds of the underwritten and renounceable rights issue announced by its manager on Sept 30, 2009.

In that rights issue, 666,703,965 rights units in K-REIT Asia were placed out to raise gross proceeds of $620 million.

The rights issue is expected to be completed on Nov 20.

Source : The Edge – 2 Nov 2009

Construction and property development firm, KSH Holdings, has clinched a new contract worth S$36 million.

It is for the construction of Watten Residences, a luxury 59-unit freehold development in the Bukit Timah area.

Under the terms, the company will start construction works next week and it is expected to complete the project within 25 months.

With the contract, KSH says its existing order book now stands at around S$383 million.

Going forward, the firm says it will continue to maintain a good mix of construction projects across different industry segments.

These include high-end luxury residential projects as well as projects in the public commercial and industrial segments.

Source : Channel NewsAsia – 2 Nov 2009

Healthcare real estate investment trust First Reit says it is enhancing its existing Adam Road Hospital.

It says it will collaborate with Health Promise, the tenant of Adam Road Hospital, and Pacific Healthcare for the enhancement.

First Reit will revamp Adam Road Hospital and turn it into a modern 3-storey purpose built cancer hospital with a basement.

The new building will have a gross floor area of 2,545 square metres and will function as a cancer treatment centre.

The treatment centre will be operated by Pacific Cancer Centre, a wholly owned subsidiary of Pacific Healthcare.

Boustead Projects will be appointed as the main contractor and project manager in an
S$18.6m contract.

The new building is expected to be completed by mid 2011.

Health Promise will continue to perform its existing lease obligation during the construction period.

Upon completion of the new building, Health Promise will take a new lease there for a term of 10 years.

Source : Channel NewsAsia – 2 Nov 2009

The Housing and Development Board (HDB) has reported a S$2b deficit before government grants in its latest annual report.

The figure is more than double the loss reported in the previous financial year.

HDB said the huge deficit for the financial year ending March was due mainly to more flats being sold. These flats are highly subsidised by the government. Higher construction costs also led to the large deficit.

Other reasons that contributed to HDB’s loss include upgrading works for lifts and rental flats.

Between April last year and March this year, HDB pushed out 8,000 flats under its Build-To-Order Scheme. That’s 2,000 more than what it supplied the year before.

At a media briefing on its latest annual report, HDB also gave an update on the Lease Buyback Scheme which allows low-income elderly Singaporeans to get a portion of cash upfront while HDB buys back the tail-end of the lease of their flat.

HDB has received more than 400 applications since the scheme was launched earlier this year.

Some 25,000 households are eligible for the scheme.

But the elderly have other options to monetise their flats.

HDB’s CEO, Tay Kim Poh, said: “Some of them will sublet their entire flat, and the rental for even a three-room flat is very good nowadays. They can easily get $1,500 per month from the rental and they move in to stay with their children (after renting out their flat).”

Despite the global downturn, HDB said the mortgage arrears rate has dropped 0.4 percentage point to 7.5 percent.

Market watchers said this may be due to the high resale prices of HDB flats.

Eugene Lim, associate director of ERA Asia Pacific, said: “So there was an upswing in the market since the beginning of this year. And what happens is that those households in arrears probably made use of this opportunity to sell their flat and downgrade to a flat that they can afford.”

Moving forward, HDB said it will focus on improving community relations. A new department has been set up within the housing board to look at strengthening social cohesion and integrating newcomers.

Source : Channel NewsAsia – 2 Nov 2009

Mainboard-listed Allgreen Properties said its third quarter net earnings more than doubled from a year ago to S$74 million.

The developer’s revenue for the three months ended September surged 159 per cent to some S$293 million.

Allgreen said the strong earnings were mainly due to higher contribution from its property development segment.

The two main projects that contributed to higher sales in the quarter were One Devonshire and Viva.

Given the improved sentiment in the property market, Allgreen said excluding fair value adjustments and barring unforeseen circumstances, it expects to have a much improved 2009 over 2008.

Source : Channel NewsAsia – 2 Nov 2009

Developer CapitaLand lodged a prospectus with the Monetary Authority of Singapore on Monday to list its retail property unit, CapitaMalls Asia.

Pricing details will be released after a road-show to market the initial public offering (IPO). Reports have estimated that the listing could raise as much as S$2.8 billion.

According to the reports, CapitaLand may sell about 1.2 billion shares at an indicative price range of between S$1.98 and S$2.39 a share.

Responding to the media reports, CapitaLand said the size and pricing of the proposed offering will depend on investor demand and prevailing capital market conditions. It added that it has started meetings with institutional investors to assess the demand for the proposed offering.

The listing could take place before the end of this year.

JPMorgan is the sole financial adviser, and the issue manager along with DBS. The two banks are also bookrunners with Deutsche Bank and Credit Suisse.

According to the prospectus, JP Morgan will buy an over-allotment amounting to 15 per cent of the offer shares in CapitaMalls Asia.

CapitaMalls Asia is expected to have a portfolio of 86 retail properties, valued at S$20.3 billion spread across five countries in the region.

Source : Channel NewsAsia – 2 Nov 2009