ValueBuddies.com : Value Investing Forum - Singapore, Hong Kong, U.S.

(22-05-2014, 09:09 AM)CityFarmer Wrote: [ -> ]

(22-05-2014, 07:34 AM)greengiraffe Wrote: [ -> ]I think smart $ has already started to reallocated their exposure from CMA to other big cap index components and potential rebalancing inclusions.

I concur.

The privatization of CMA, will release huge amount of smart $, which significant portion of it should be rebalanced into other similar stocks e.g. FCL

(vested)

CMA intended takeover and delisting was announced Apr 16.
Which coincides with the beginning of run up of FCL.
Brilliant! Wish you had posted this insight in the forum earlier...

[Image: fclchart_zps99bad10b.png]

(22-05-2014, 10:47 AM)swakoo Wrote: [ -> ]

(22-05-2014, 09:09 AM)CityFarmer Wrote: [ -> ]

(22-05-2014, 07:34 AM)greengiraffe Wrote: [ -> ]I think smart $ has already started to reallocated their exposure from CMA to other big cap index components and potential rebalancing inclusions.

I concur.

The privatization of CMA, will release huge amount of smart $, which significant portion of it should be rebalanced into other similar stocks e.g. FCL

(vested)

CMA intended takeover and delisting was announced Apr 16.
Which coincides with the beginning of run up of FCL.
Brilliant! Wish you had posted this insight in the forum earlier...

I have not followed the CMA GO closely, but I suppose the money hasn't been dispatched yet. The current run-up shouldn't due to the smart $, but other smarter $. I will not surprise part of the smarter $ is from buddies here.

In other words, it is likely that the run-up will continue till the smart $ is released.

(vested)

Other big names like Keppel, Capitaland and Far East are traded between 0.6 to 0.8 of book value. FCL currently valued at 0.9 which possibly due to the expectation of hospitality reit spin-off. With the money to be released from CMA, do you think FCL would be valued above its NAV? I hope but really doubt so.

[ vested ]

I think if you have followed my previous postings on FCL and the expected milestones to be laid, the fundamentals were there for everyone to accumulate at ease...

At current levels, fundamentals have been rightly priced in. We are now hoping that technical factors such as increasing free float, replacement of other index component stocks etc to sustain the firmness.

Risks is much higher now since share price has performed quite well in the last 2 months.

Vested
GG

(22-05-2014, 10:47 AM)swakoo Wrote: [ -> ]

(22-05-2014, 09:09 AM)CityFarmer Wrote: [ -> ]

(22-05-2014, 07:34 AM)greengiraffe Wrote: [ -> ]I think smart $ has already started to reallocated their exposure from CMA to other big cap index components and potential rebalancing inclusions.

I concur.

The privatization of CMA, will release huge amount of smart $, which significant portion of it should be rebalanced into other similar stocks e.g. FCL

(vested)

CMA intended takeover and delisting was announced Apr 16.
Which coincides with the beginning of run up of FCL.
Brilliant! Wish you had posted this insight in the forum earlier...

[Image: fclchart_zps99bad10b.png]

http://infopub.sgx.com/FileOpen/FCL-Inco...eID=298589

This new incorporation should be to house Sydney Sofitel Wentworth...

'Frasers Unlisted Collection boutique hotel in the Central Park development in Ultimo.'

New brands breathe life into hotels

Larry Schlesinger
723 words
23 May 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Australia's pipeline of new hotels is at its highest level in more than a decade-and-a-half, with 53 projects either under construction or committed over the next five years.

JLL Hotels estimates around 7000 rooms will be added in this fresh wave, bringing at least a dozen new budget, lifestyle and luxury brands in what will be a boon both for the construction sector and end users – hotel guests.

Key projects include the first Australian purpose-built Ritz Carlton in Perth's Elizabeth Quay, to be developed by Hong Kong-listed Far East Consortium; the $300 million Parkroyal in Melbourne's Docklands, to be managed by the Pan Pacific Hotels Group for local developer Digital Harbour; and Chinese developer Greenland's conversion of the Water Board building on Pitt Street into a five-star Primus hotel as part of a mixed-use development.

For hotel guests, these new projects will bring with them global best practice in design, technology and amenities and should force local operators to raise their game as well.

Master Builders chief economist Peter Jones said hotel building will be a "shot in the arm" for the commercial construction sector, which he said has languished in comparison to residential building in recent times.

"It will complement the government's $11.6 billion Infrastructure Growth Package, helping to broaden construction investment beyond civil engineering construction on roads," Mr Jones said.

"Our soon-to-be-published building & construction industry forecast predicts non-residential building will be driven by commercial and industrial construction sub-sectors, contrasting with weakness in social and institutional sectors like education-related building. Hotel building, especially in Sydney, Perth and Brisbane, is forecast to be strong."

JLL hotels' head of research Karen Wales said the current development wave is different from the last cycle when strata-titled serviced apartment operators and domestic brands emerged.Shift to international brands

"The current wave is a shift away from that towards international brands including lifestyle, boutique and budget brands," she said. "There will only be a few new luxury brands because they are harder to stack up. Five-star room rates are lower compared with cities like New York and London, and the cost of construction is high.

"But there will be greater choice of lifestyle brands, which appeal to Gen Y because they're more technologically integrated and offer things like ­activated, Wi-Fi-enabled lobby spaces."

Ms Wales said capital to fund these investments is coming from a variety of sources, but with a fairly high proportion from China and to a lesser extent Hong Kong and south-east Asia.

"Asian operators are buying assets and putting their own brands on them to secure their footprint and establish their brand in Australia."

Examples include Greenland's Primus hotel on Pitt Street, Malaysian Group Cititel's hotel on Hunter Street in Sydney and the Frasers Unlisted Collection boutique hotel in the Central Park development in Ultimo. "Domestic capital is also prevalent and from a variety of investor groups including owner operators, local developers and some strata-titled serviced apartments.

Another trend is incorporating hotels within mixed-use developments where returns are being spread across a variety of uses.

Michael Simpson, director of ­Colliers International's hotels division, said developing new hotels was the "rational next step" when there is a lot of money seeking a home but most of the best-performing assets are very tightly held and seldom trade.

"There used to be a feasibility gap between the cost of delivery and the value of these new hotels, but that gap is being bridged by the better performance," Mr Simpson said.

He believes the broadening out of the market is a good thing: "Sydney and Melbourne are getting more five-star hotels, which they need. Brisbane is getting a mix of five-star hotels and boutique hotels, which it also needs."

Mr Simpson said the new hotels would have a very positive impact on guest experience and force incumbent operators to upgrade or lose market share. "They will bring with them the kind of technology that other markets take for granted: better quality of Wi-Fi, the ability to stream music through your smartphone and control things like air-conditioning and lights using your iPad," he said.


Fairfax Media Management Pty Limited

Document AFNR000020140522ea5n00018

With such a by run up, I have divested some and keep some. Hope more news will push it higher. At this level I won't be buying. Thanks to the buddies that I vested in this one. Fundamentally I still think this is a good company.

^^ FCL is a fair company but a good stock because of towkay's vested interest. This is important because it will determine when one will divest.

http://www.theage.com.au/business/proper...389yf.html

Sofitel Wentworth sale heralds new round of Asian investment
Date
May 14, 2014

Carolyn Cummins
Commercial Property Editor

The sale of the Liberal Party's preferred hotel in Sydney, the Sofitel Wentworth , to the Singaporean Frasers property group, for $202.7 million, is the start of the next wave of Asian investment into the hotel and tourism sector, according to agents.

The deal, which is said to be used as a seed assets for a new real estate investment trust, augurs well for the sale of the Sheraton on the Park, also recently put on the market. Located in Elizabeth Street, opposite Hyde Park, the Sheraton is worth about $250 million.

The seller of the two hotels is LaSalle Investment Management. Accor Asia will remain as the manager of the Sofitel Wentworth.

Wayne Bunz, senior director of CBRE Hotels Australia, said he is in due diligence for about $70 million of hotels in Sydney, with interest being shown by Asian investors.

''Hotels offer a solid, long term yield and these investors are long term holders of assets,'' Mr Bunz said.

''At the end of the manager's lease the hotel owners can look at redeveloping the properties into apartments.''

Across Sydney there has been a rash of big ticket hotel sales including the Four Seasons Sydney Hotel, to Korea's Mirae Asset Global Investments for $340 million, while the NSW government has also ear-marked the former "Sandstone" Department of Lands building, and Department of Education building on Bridge Street for sale to a hotel or tourism-style operator.

In the past six months more than $150 million in cash has also changed hands in Melbourne hotels, which experts said was an indication of a busy year ahead.

In the largest deal, the private Chinese investor Fu Wah International Group has made its first significant foray into local property with the purchase of Melbourne's landmark Park Hyatt hotel.

It was believed the price paid was about $135 million, but the agents and buyer declined to comment.

The five-star hotel is near Melbourne's Parliament House, at 1 St Andrews Place, and was developed in 1999 by Lustig & Moar at a cost of $150 million. The sale involves both the 240-room Park Hyatt and a commercial car park next door.

Mr Bunz, and Anton Eilers, executive director of CBRE China, brokered the off-market transaction between Singapore's GIC and Fu Wah International Group, which is due to settle this week.

In another deal, also due to settle soon, was the Hong Kong-based hospitality company Ovolo Group, which bought the Melbourne-based Oaks on Lonsdale serviced apartments complex for about $70 million.

''Hotels have been keenly sought after. Late last year, the private Chinese investor Fu Wah International Group made its first major foray into local property with the purchase of Melbourne's landmark five-star Park Hyatt hotel,'' Mr Bunz said.

It was believed the price paid was about $135 million, but the agents and buyer declined to comment.

The hotel, at 1 St Andrews Place, near Melbourne's Parliament House, and was developed in 1999 by Lustig & Moar at a cost of $150 million. The sale involved both the 240-room Park Hyatt and a commercial car park next door

(11-05-2014, 11:25 PM)greengiraffe Wrote: [ -> ]Fraser Sofitel deal to boost plans for trust
BEN WILMOT THE AUSTRALIAN MAY 12, 2014 12:00AM

SINGAPORE’S Frasers Centre­point is pushing ahead with plans for a hotel real estate investment trust after picking up the Sofitel Sydney Wentworth for $202.7 million in a deal finalised over the weekend.

The five-star hotel was sold by fund manager LaSalle Investment Management, which picked up the 436-room property for $130m four years earlier from Tourism Asset Holdings.

The sale was brokered by Sam McVay of McVay Real Estate and Craig Collins of JLL’s Hotels & Hospitality Group. The premium price achieved is expected to be repeated in a number of other Sydney hotel deals, notably as US group Starwood brings its Sheraton on the Park property on Elizabeth Street to market for about $450m through JLL.

Frasers Hospitality owns and operates hotels around the world and already has a local presence with a $252m portfolio, including the Fraser Suites Perth and Sydney and Fraser Place Melbourne, but the group is now buying other properties ahead of the float in Singapore.

Frasers has been bidding for hotels across Asia as it attempts to find high-profile landmark properties to anchor the fund.

Thai billionaire Charoen Siri­vadhanabhakdi won control of Fraser Centrepoint last year.

Note that FCL is going xd 2.4 cents interim dividend today

PUBLISHED MAY 26, 2014
TOPLINE
An eye on growing its landbank

Frasers Centrepoint also aims to tap its strength in mixed-use projects and is mulling over a hospitality fund, reports LYNETTE KHOO

'We will be interested to participate to buy commercial assets, particularly suburban malls, offices and even business parks.'
- Lim Ee Seng, group CEO of Frasers Centrepoint Limited
- FILE PHOTO
SINGAPORE'S property market has cooled somewhat but Frasers Centrepoint Limited (FCL) remains fired up. The global property player is looking to grow its landbank albeit through moderate bids, tap its strength in mixed-use development and scale up its hospitality arm.
In fact, given the speed at which its hospitality business is growing, it is starting to consider having a fund to manage those acquired assets.
"If we have a hospitality fund that can work with us, that will be an attractive proposition," said group chief executive officer Lim Ee Seng. "Nothing has been confirmed, but this is worth exploring."
As part of its buying spree, FCL snapped up Spanish company Teycotel BCN for 948,000 euros (S$1.6 million) last month; the company owns Hotel Porta Marina in Barcelona and the hotel's operator. In Germany, FCL has acquired three greenfield sites that are being developed for serviced residences.
The group is now looking at a fourth site in Germany and one or two more hotels in Spain, Mr Lim said.
The planned listing of Frasers Hospitality Trust (FHT) next month shows that the group's hospitality business has come of age. For a start, FHT will have an initial portfolio of six serviced residences and six hotels. The six serviced apartments will come from FCL at a price tag of at least $651.7 million, while the other six hotels will be injected by FCL's major shareholder TCC Group, controlled by Thai billionaire Charoen Sirivadhanabhakdi.
This spin-off of the trust is also coming at a time when FCL wants to beef up its investment properties - that now make up 30 per cent of group revenue - to be on par with the contribution from its development properties in the long run.
Higher yielding development projects still accounts for 70 per cent of group revenue. But given the slowdown in the residential market here, FCL has been trying to raise recurring income from investment properties.
"We will be interested to participate to buy commercial assets, particularly suburban malls, offices and even business parks," Mr Lim said. "Our strength is in mixed-use development," he added, in reference to Changi City Point, Watertown in Punggol and a soon-to-be-launched mixed-use project in Yishun.
Still, FCL will carry on replenishing its residential landbank in the mass market and mid-tier segments, albeit with moderate bids.
Noting that there have been instances where developers threw in aggressive bids, only to yield a return of less than 10 per cent from their developments, Mr Lim said: "This is not a situation we want to be in. Whenever we win the site, we don't want to end up losing sleep over it."
To date, its Sengkang condo project Rivertrees Residences has sold more than half of its 496 units; its 632-unit QBay Residences at Tampines is almost fully sold. Both projects have achieved median prices of slightly above $1,000 per sq ft (psf). The Sengkang plot was bought at $533 psf per plot ratio (psf ppr) and the Tampines site at $417.86 psf ppr with partners Far East Orchard and Sekisui House.
FCL also wants to shorten the so-called "time-to-market" - from the day it acquires the plot to the project's launch date - to six months from the current eight months.
But the mixed-use site in Yishun is taking a longer than usual time, given that it is sitting on top of a new bus interchange, which renders the need for certain regulatory approvals.
The group had earlier stunned the market with its $1.43 billion bid for the Yishun site last September, 47 per cent above the next highest offer.
"We had to protect our position" in the retail segment in Yishun, Mr Lim explained. But the pricing of residential units in the project is expected to be "affordable and attractive enough to invite buyers and investors", he said. FCL is shooting for a launch by the end of this year.
While Singapore remains its core market, the group is on the lookout for opportunities in Australia and China, where it is targeting annual residential sales of over 1,000 units collectively over the medium term.
The group's prudent assessment of options, however, means that there are times it has to hold back or be prepared to let some opportunities pass.
"Last two years, we have had some opportunities to acquire - both landbank and companies - in Vietnam. But we made a definite decision not to go in and that proved to be correct," Mr Lim said.
"If we had gone in two years ago, we would have made massive write-downs in the assets. Buying had ground to a halt, the interest rate at that time was very high and the Dong was very volatile," Mr Lim added.
"Now, the landbank is good and the pricing has been pared down, we are open to opportunities. We have been approached, but we are studying all this and are monitoring very closely the impact from the aftermath of the anti-Chinese riots."
lynkhoo@sph.com.sg
@LynetteKhooBT