Homepage
PR Newswire
07-08-2014, 10:29 PM
I have got round to look at ALZ's financials since 06 - 2 years before the GFC axe fell:
ALZ still sitting on net writeoff since gfc erupted... from 08 till now, for the inv prop div net writeoff amounted to 77m total cumulative writeoff for development division totalled 278m.
Even for the 1H14, ebit of residential div is a mere 1/3 of FY12 and FY13, about 40% of FY09 and FY10 say around 25% of the boom years from FY06-08.
With momentum in Aussie residential sector due to lowest interest rate environment since 1960s, ALZ has value extraction potential. Of course FCL paid a record price for alz but have to give Towkay benefit of the doubt since his has been a man with good acumen for big deals.
The Road Forward for FCL:
i) Gearing will rise but not what the market is expecting as there are many ways to slice a cow:
a) Strategic partner(s) waiting in the wings - FCL has a successful Japanese in http://www.sekisuihouse.com.au/home-builder-australia.
Based on previous news article - the Japanese property company is the second largest in Japan and would be more than willing to participate in FCL's ALZ forays.
FCL has taken the initiatives to mount a mega bid for ALZ - even beating Australian propety bigwig Stockland. Hence, there is definitely good value in the eyes of the local. Somehow, I just can't help but to keep digging Capland -professionals at cutting losses and gains.
b) Extraction of values from investment property holdings in the commercial sector (small) and ind property portfolio (reported to be quite hot and will be buoyant further with improvements in infrastructure to be implemented over the next decade by a infrastructure friendly government.
FCL has Frasers Commercial Trust for yield accretive disposals given that FCOM is no stranger to Australian mkt. Alternatively, there will be no shortage of suitors to selectively unlock values and disposed off to global pension and SWFs alongside with overseas and local property suitors
The main issue facing many global developers presently is the lack of quality assets at reasonable prices. ALZ presents an established platform for FCL that has an equally established and impressive developer cum REIT platform for continued value extractions via ongoing residential developments and quality recurrent income via office and industrial properties.
The market may deemed ALZ as too big a purchase for FCL in the immediate term. However given that big names from Singapore such as City Dev, Suntec and numerous big China property companies are making a beeline down under, FCL and Towkay Charoen has certainly pulled another coup for a FT owned Singapore flagship Down Under.
If you ask me which property market is more risky - Australia or China? There is no prize for guessing.
HU8TPPY
Vested
GG
ALZ still sitting on net writeoff since gfc erupted... from 08 till now, for the inv prop div net writeoff amounted to 77m total cumulative writeoff for development division totalled 278m.
Even for the 1H14, ebit of residential div is a mere 1/3 of FY12 and FY13, about 40% of FY09 and FY10 say around 25% of the boom years from FY06-08.
With momentum in Aussie residential sector due to lowest interest rate environment since 1960s, ALZ has value extraction potential. Of course FCL paid a record price for alz but have to give Towkay benefit of the doubt since his has been a man with good acumen for big deals.
The Road Forward for FCL:
i) Gearing will rise but not what the market is expecting as there are many ways to slice a cow:
a) Strategic partner(s) waiting in the wings - FCL has a successful Japanese in http://www.sekisuihouse.com.au/home-builder-australia.
Based on previous news article - the Japanese property company is the second largest in Japan and would be more than willing to participate in FCL's ALZ forays.
FCL has taken the initiatives to mount a mega bid for ALZ - even beating Australian propety bigwig Stockland. Hence, there is definitely good value in the eyes of the local. Somehow, I just can't help but to keep digging Capland -professionals at cutting losses and gains.
b) Extraction of values from investment property holdings in the commercial sector (small) and ind property portfolio (reported to be quite hot and will be buoyant further with improvements in infrastructure to be implemented over the next decade by a infrastructure friendly government.
FCL has Frasers Commercial Trust for yield accretive disposals given that FCOM is no stranger to Australian mkt. Alternatively, there will be no shortage of suitors to selectively unlock values and disposed off to global pension and SWFs alongside with overseas and local property suitors
The main issue facing many global developers presently is the lack of quality assets at reasonable prices. ALZ presents an established platform for FCL that has an equally established and impressive developer cum REIT platform for continued value extractions via ongoing residential developments and quality recurrent income via office and industrial properties.
The market may deemed ALZ as too big a purchase for FCL in the immediate term. However given that big names from Singapore such as City Dev, Suntec and numerous big China property companies are making a beeline down under, FCL and Towkay Charoen has certainly pulled another coup for a FT owned Singapore flagship Down Under.
If you ask me which property market is more risky - Australia or China? There is no prize for guessing.
HU8TPPY
Vested
GG