With the Integrated Resorts some 6-9 months away from completion, we believe that KepLand could capitalise on that to re-launch the balance units at Reflections at Keppel Bay, as well as possibly prepare to launch Marina Bay Suites. The proximity of the projects to each of the Integrated Resorts (IRs) would be a key selling point, and few competitors can boast to have a landbank that has similar exposure to both IRs.
KepLand announced in May that it granted a 6-month extension to an enbloc purchaser of 51 units of the Suites at Central to complete the payment of the outstanding 80% of the purchaseprice (effectively $1,445 psf, total amount receivable estimated at $90m). We believe that in the worst-case scenario whereby the buyer fails to pay up, KepLand would be able to sell these units at above $1,445 psf, and possibly book-in a higher profit. Breakeven for the project is estimated at $925 psf.
With the completion of both phases of the MBFC and the Ocean Financial Centre, KepLand would be one of the largest landlords of prime Grade A office space in the Marina Bay area, with an attributable GFA of about 1.6m sq ft. We believe that the low all-in costs of both developments (~$1000 psf) provide sufficient buffer against further declines in the market capital values of prime Grade A office space.
We believe that with the return of buyers’ confidence in KepLand’s key markets like Singapore and China, KepLand is in-line for a re-rating. Backed by a strong balance sheet strengthened by the recent rights-issue, KepLand is well-positioned for the next phase of the cycle. We maintain our BUY recommendation at a target price of $2.73, pegged at a 20%-discount to RNAV.
Sponsored Links
Comments
No response to “Keppel Land - Improved sales activity in the mid- and high-end segments”
Post Comments (Atom)
Post a Comment |
Post a Comment