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

Stockland on hunt for assets
GREG BROWN THE AUSTRALIAN JUNE 12, 2014 12:00AM

STOCKLAND is expected to look for more merger and acquisition opportunities if Singaporean-­listed Frasers Centrepoint wins out in the $2.6 billion Australand Property Group takeover.

Some analysts say Stockland will turn its attention to seeking out controlling stakes in companies that would help it boost its ­industrial and apartment dev­-elopment portfolio, which had driven its takeover bid for Australand.

Credit Suisse analyst John Richmond said that if Stockland walked away from the Australand bid, it was likely to grow its industrial asset base through a combination of smaller listed and unlisted portfolio acquisitions in combination with individual site acquisitions and developments.

But it could take time for Stockland to grow its apartment development capability.

“Stockland will continue to grow organically through introducing more medium-density product within its existing land bank,” Mr Richmond said.

He cautioned there was some risk for developers acquiring apartment sites on-market at this stage in the cycle, given the entry of foreign developers with often lower return hurdles.

Stockland could also take a more hostile approach in seeking to expand its holdings, with one option to make a play for one of the smaller listed industrial real ­estate investment trusts, like the Allan Fife-run Australian Industrial REIT or even 360 Capital’s listed industrial fund, according to an analyst.

“This could be an option. Now that their share price has a four in front of it, (Stockland has) a reasonably efficient cost of capital and they’ve got some debt capacity too,” the analyst said.

Most analysts and fund managers said the Frasers bid was compelling and did not expect Stockland to make a counter-bid. One investor said: “It’s pretty well game over.”

Stockland could use its nearly 20 per cent stake in Australand to try to secure a number of industrial properties and residential development opportunities.

Australand managing director Bob Johnston said last week that the board would recommend Frasers proposal in the absence of a superior offer.

Australand shares closed unchanged at $4.58 yesterday, while Stockland was up 1c to $4.03.

Planning changes a boon to developers

KYLAR LOUSSIKIAN THE AUSTRALIAN JUNE 12, 2014 12:00AM

A HOST of listed and private developers are benefiting from a ser­ies of planning decisions unveiled by NSW Premier Mike Baird last weekend to rezone or release swathes of land across northwestern Sydney for housing.

On the listed side, Australand Property Group will benefit from the rezoning of the disused Ashlar golf course in Blacktown, which it has been pushing for, and can now proceed with 800 new dwellings in the area. Australand purchased it in 2011, and is planning to reconstruct a wetland alongside several other green spaces.

The rezoning of land in nearby Richmond will allow Archie and Gordon Douglas’s North Richmond Joint Venture to start work on its 1400-home Redbank development. That 80ha project will see the Douglases, former PRD­nationwide directors, continue a shift from agents to developers.

“We are seeing fields in western Sydney transformed into vib­rant new suburbs, which in addition to boosting housing supply is also creating thousands of jobs for tradies and builders,” Mr Baird said at the announcement of the rezoning.

“The NSW government is ensuring these new homes are delivered close to local jobs, with strong public transport and road links.”

Other winners from land releases in Marsden Park North are LeaMac Properties and Queens­land-based Angliss Property Group, the two major landholders in the area with 868ha in total.

Small listed player CVC also has a 66 per cent stake in a landholding of about 153ha.

FCL is preparing to "cherry pick" in Europe property market? May be the best time to do so in Europe...

(vested)
-----
FCL incorporated a wholly-owned subsidiary in England and Wales named “Frasers Hospitality Berlin Investments Ltd”

http://infopub.sgx.com/FileOpen/Incorpor...eID=301595

They let the cat out of the bag last month during an interview with BT:

http://infopub.sgx.com/FileOpen/Letter_t...eID=299007

Frankly, management have been forward looking to recycle capital from injecting assets into their REIT pipeline.

Hence, their intended acquisition of Australand may not be as aggressive as what market is expecting since they probably have factored in lock in sales that is forthcoming from their projects globally and in this case in Australia.

Vested
GG

(17-06-2014, 09:27 AM)CityFarmer Wrote: [ -> ]FCL is preparing to "cherry pick" in Europe property market? May be the best time to do so in Europe...

(vested)
-----
FCL incorporated a wholly-owned subsidiary in England and Wales named “Frasers Hospitality Berlin Investments Ltd”

http://infopub.sgx.com/FileOpen/Incorpor...eID=301595

http://www.afr.com/p/lifestyle/life_leis...9MriwDI1YK

Punting on Putney
PUBLISHED: 13 JUN 2014 06:06:11 | UPDATED: 13 JUN 2014 06:09:55
print-font+fontReprints & permissions
SAMANTHA HUTCHINSON
WEIGH IT UP
Pros Pleasant waterfront Good access to schools Close to working hubs including Parramatta, Homebush, North Ryde and the CBD Good ferry links
Cons Increasing density Limited public transport options Major arterial roads can get clogged
Those early settlers of Sydney must have been pining for the motherland when they planted their flags along the Parramatta River waterfront, for suburb names along “The Thames of the Antipodes” to this day include London icons Putney, Chiswick, Woolwich and Greenwich.

Most residents will agree that, with the exception of Woolwich, there’s nothing very English about many of the suburbs along the Parramatta. But they’re just as likely to tell you the suburban charm of areas like Putney and its close proximity to great schools and major professional hubs is the very reason they like it.

Just 10 kilometres from Sydney’s CBD, Putney is known for its wide streets of bungalows and growing number of apartment and townhouse-style accommodation.

Long overlooked for its neighbours Gladesville and Breakfast Point, the suburb is now coming into its own: its population has grown by a third in the past six years.

Its not hard to see why.

The neighbourhood’s mix of ferry and bus links means residents can commute with as much ease to major commercial hubs in North Ryde, Parramatta and Homebush as they can to Sydney’s CBD, while the lack of high-rise development means they still feel like they’re living a quiet suburb.

But this isn’t a suburb strictly focused on work: the waterfront also means a strong culture of rowing and boating exists.

WHO BUYS
Putney’s close proximity to the river, and its wide strip of green space and picnic areas by the water make the place a natural choice for families with young children.

Children under 14 now make up the dominant age group, according to RP Data – and their parents are paying for it too. Average monthly mortgage repayments for the suburb are now about $4000.

The area is also notable for its high proportion of owner-occupiers, which is a drawcard for buyers wanting to settle down in a community where they’ll get to know their neighbours.

People living and owning their own homes make up more than 85 per cent of the residents of the suburb.

MARKET OVERVIEW
A development boom in the suburb has drawn new residents to the area, where prices continue to rise despite a consistent supply of new apartment and townhouse accommodation coming on stream.

Prices keep going up too, and have posted growth of about 12 per cent in the past two years. The median house price is now $1.4 million.

IN FOCUS
While standalone homes still make up the bulk of property in suburb, more residents are able to buy into the area through smart developments like Fraser Property’s Putney Hill project.

Built on a 13-hectare site formerly occupied by the Royal Rehabilitation Hospital, the masterplanned community by Cox Richardson has apartments, townhouses and freestanding homes around a 24,000 square metre park, with play equipment, ponds and bullrushes.

The latest release at Putney Hill, The Gardens, offers premium two- and three-bedroom apartments with water views, priced from $710,000.

Godfather Charoen is still water and runs deep. If everyone thinks FCL will simply rack up gearing in the process of buying out Australand, it will be too simplistic...

Sekisui House linked to Australand bid and joint ventures
FLORENCE CHONG THE AUSTRALIAN JUNE 19, 2014 12:00AM

Sekisui House, Japan’s second-largest home builder, is more than a curious bystander in the $2.6 billion takeover bid for the listed Australand by Singapore’s Frasers Centrepoint.

The company is ­already a joint-venture partner with Frasers Centrepoint in several large residential projects in Singapore, and, with its subsidiary, ­Frasers Property Australia, in the $2bn Central Park project in Chippendale, inner Sydney. Sekisui House’s Australian president and chief executive, Turo Abe, would not confirm or deny that its existing relationship with Frasers Centrepoint will extend to any involvement with the Australand bid. However, sources said that the company’s history shows that it forges ongoing relationships with primary partners (like Frasers) in overseas markets — such as in Singapore and the US.

The timing could also prove to be fortuitous.

“Sekisui House Australia is continuing to solidify its Australian operations, with several projects on the drawing board,” Mr Abe told The Australian.

The company is in advanced negotiations with Australian companies to form four residential joint ventures. If these came to fruition, they would deliver 2500 dwellings valued at $1.5 billion, over six years in NSW and Queensland.

Sekisui House declined to offer further details on its prospective partners, other than to say they were sizeable companies undertaking large, multi-year projects.

Craig D’Costa, Sekisui House’s project director, said the company’s strategy is to have a pipeline of developments to ensure ongoing activity.

“Most of our projects have a 10-year life. We believe small projects require as much effort to put together as large ones,” he said.

Sekisui House is part way through many of its existing projects, including the high-profile Central Park, which is being accelerated to meet demand and is now due to be completed in 2017 or early 2018.

“We chose to partner with Frasers because it runs a like-minded business with a strong emphasis on sustainability,” said Mr D’Costa, adding that Sekisui was pleased with the commercial success of the Central Park project.

Since 2009, the company has acquired projects worth a total $1.5bn. Today, its Australian operation turns over $1bn of a year.

In 2011, Mr Abe told The Australian that he hoped turnover would reach $1bn in five years. He is ahead of schedule. The company’s portfolio will yield about 11,000 housing lots and units.

“Our growth will be measured and we choose locations where there is good existing infrastructure or the government plans to build more infrastructure,” said Mr D’Costa.

The company has grown rapidly in Australia, where it now employs 220 people, making Australia one of Sekisui House’s fastest-growing offshore markets. The Japanese company operates 50 projects in the US, China, Singapore and Australia.

Mr Abe said Sekisui House’s overseas operations accounted for about 7 per cent of the company’s operating margin with its home market still providing the bulk of its revenue.

Australia was the only country outside Japan, said Mr D’Costa, where Sekisui House has a home-building business. So far, it has completed 2000 contract houses in Australia, and undertakes house-building contracts worth $100m each year.

Mr D’Costa said the company first came to Australia as a developer, and branched into contract home building after acquiring the former AV Jennings for $18.5m in 2010. He said Australia — and especially NSW — had a housing shortfall, and was a market that offered growth when compared with Japan where the population was ageing and declining.

The objective of the Tokyo-listed company, which has a market capitalisation of $9.2bn, was to expand its house-building operations into new markets.

Over the years, its Australian partners have included Payce Consolidated and Lend Lease (with which it developed an apartment block, Serrata, in Melbourne’s Dockland, and a large residential project at Coolum on Queensland’s Sunshine Coast).

In January Sekisui House took over the Coolum Residences project, originally part of the Hyatt Coolum resort bought by mining entrepreneur Clive Palmer in 2011.

Update on the impeding IPO...

(vested)

Frasers Hospitality Trust said to plan 7% yield in Singapore IPO

Frasers Hospitality Trust, backed by Thailand’s richest man, plans to offer a dividend yield of 7% for the 2015 financial year in its Singapore initial public offering, people with knowledge of the matter said.

The trust, which will be backed by six hotels and six serviced residences, is set to start selling units at 88 cents each next week, the people said, asking not to be identified as the process is private. Frasers Hospitality and its owners are seeking $396 million in the IPO, they said.

At 7%, Frasers Hospitality’s yield is higher than Ascott Residence Trust’s 12-month yield of 6.2% and Far East Hospitality Trust’s 6.4 percent. The offering would be only the third IPO of more than US$100 million ($125 million) this year in Singapore, after OUE Commercial REIT and Pacc Offshore Services Holdings.
...
http://www.theedgesingapore.com/the-dail...e-ipo.html

Stockland may not lift Australand offer price, Steinert says
AAP JUNE 19, 2014 3:10PM

STOCKLAND boss Mark Steinert has indicated the company may not increase its $2.5 billion bid for rival property developer Australand to match a higher bid from Singapore.

Mr Steinert said Australand was a great fit for Stockland, and the company had already tabled an attractive offer.

“We felt we’d made a compelling and fair offer and the market generally agreed with us,” he told a business lunch in Sydney.

“Our bid still stands and that process is not complete at this time, but we also committed to our investor base as to how we’d approach that.”

Stockland launched its takeover bid for Australand in April and lifted its offer by $100 million to $2.5 billion when its original proposal was rejected by Australand’s board.

At the time Mr Steinert said the price represented Stockland’s final offer, but the company was trumped by a $2.59 billion offer from Singapore’s Frasers Centrepoint in early June.

Frasers has been granted four weeks to exclusively complete due diligence on Australand, the owner of $2.4 billion in residential and commercial developments.

Mr Steinert said Stockland won’t walk away from the table empty-handed, and is set to take home a tidy profit on the 19.9 per cent stake it bought in Australand in March if it loses out to Frasers.

“If it doesn’t transpire that we are able to incorporate those people and those assets ... we will book the $80-85 million in profit we’ve made on the position and certainly look at other opportunities,” he said.

FCL, clsa maintain BUY:

A fully debt funded takeover for AustraLand can drive up to 28% EPS
accretion for FCL on our estimates with net gearing well within
management’s comfort zone of 80%. We believe FCL is likely to fund a
high portion with debt with scope to partially fund this with equity and
naturally dilute 28% major shareholder, ThaiBev in the process in our
view. While the acquisition price at A$4.48 is 22% above NTA, we see
long term diversification merits for FCL. Reiterate BUY.
Fully debt funded takeover for ALZ can drive 28% EPS accretion…
We estimate FCL’s proposed acquisition of AustraLand could drive EPS
accretion of 5.4% assuming a 50%/50% debt/equity funding structure (5.5%
cost of debt and equity raising at 5% discount to last close). Under this
scenario, gearing for FCL will rise from 33% (assuming successful Reit
spinoff) to a comfortable 46%. Blue sky scenario assuming 100% debt
funding and blended cost of debt of 4% (combination of offshore and onshore
debt) could further lift FCL’s EPS accretion to 28% on our estimates.
…yet keeping FCL’s gearing within comfort zone
Our sensitivity analysis suggests a 25% debt funding threshold level for FCL
to achieve positive EPS accretion. Assuming a base case of 50/50 debt/equity
funding, FCL gearing can reach 46% (assuming successful spinoff for the
Reit) and a maximum of 71% if FCL pursues a path of 100% debt funding
(well within management’s upper range of 80%). We believe FCL is likely to
use at least 50% debt funding given its strong balance sheet while a joint bid
with long time partner Sekisui House could further ease funding needs.
Not a done deal, Stockland could counter bid
That said, our analyst, John Kim believes StockLand could return with a
counter offer for AustraLand and potentially up the offer to A$4.65/share and
yet drive 8.7% EPS accretion for SGP. Alternatively, SGP can walk away with
its 19.9% share in ALZ and pocket a nice gain of A$88.7m. Back of envelope
suggests EBIT contribution from Australia FCL can rise from FY13’s 1%
(skewed by recognition method on completion basis) to 40% of EBIT. In
terms of assets, FCL’s Australia exposure can rise from 16% to 42%.
Reiterate BUY
While details are sketchy at the moment as FCL conducts its due diligence
(granted 4 weeks from 4th Jun 2014), we believe an ALZ acquisition offers
good diversification merits for FCL as it will increase its recurring income base
and diversify risk from the challenging Singapore residential market. Our
FY15 RNAV of S$3.38 remains unchanged with TP pegged at S$2.20. BUY

City farmer and Green giraffee
obviously you all are vested on FCL
but can you guys stop spamming on this counter everyday???

I'm coming to this forum less and less, you guys are only interested in promoting your own stocks