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PR Newswire
10-10-2014, 12:08 AM
Excerpt from a bloomberg story today - all of this seems to clash hugely with the comments coming from the board of FT regarding retailing in China and the direction of tenancy agreements. Our assets trade at 37% of NAV when prime retail properties are in huge demand - this is crooked...
-- In Asia’s real estate market, dealmaking just hit a record. More is coming.
Property deals in China and its Asian neighbors reached a record $34 billion last quarter, a turnaround from the global financial crisis. That tally includes $10 billion for a single site in Seoul’s Gangnam district by a Hyundai Motor Co.-led group and Singapore’s Frasers Centrepoint Ltd.’s bid of more than $3 billion, including debt, for control of Australand Property Group.
CapitaRetail China Trust, a Singapore-listed company with 10 malls in eastern China, is among the next possible targets as it trades below the $1.7 billion estimated value of its assets, said Standard Chartered Plc. Saizen REIT, another Singapore- listed trust that owns about 5,500 apartments in Japan, is also undervalued by that measure. For a global buyout firm or Hong Kong developer, buying a Chinese mall would be a way to profit as the country’s economy becomes more consumer-centric, said CBRE Inc.
“Being in retail is a natural way to frontrun that trend,” Marc Giuffrida, CBRE’s executive director for global capital markets in Asia, said by phone from Singapore. “We see very strong demand in all the key gateway markets for good- quality real estate.”
“Asian consumers have continued to expand spending, creating vast incentives for continued investments,” Priyaranjan Kumar, Singapore-based regional director of capital markets at property-services firm Cushman & Wakefield, said by phone.
Cities across Greater China are the most attractive Asia Pacific locations for international retailers, Jones Lang LaSalle Inc. said in a June report. Economists estimate retail sales will rise at least 12 percent in each of the next three years.
CapitaRetail’s Draw
CapitaRetail’s properties draw 73 million shoppers a year, more than three times the population of Beijing, the company’s website says. Almost every meter of CapitaRetail’s mall floorspace is leased to tenants including Wal-Mart Stores Inc. and fast-food chain KFC.
“Definitely, they could be a target,” said Desmond Chua, a market analyst at CMC Markets Singapore Pte. “It’s an appealing vehicle” to tap Chinese consumers, he said.
Earnings before interest, taxes, depreciation and amortization at CapitaRetail will jump 52 percent to about S$147 million in 2016 from last year, according to analysts’ estimates compiled by Bloomberg. Rental revenue at CapitaMall Grand Canyon in Beijing, the company’s biggest shopping center, may jump 26 percent between 2014 and 2016 as tenants sign up for more expensive leases, Standard Chartered said.
Shares in CapitaRetail have climbed 18 percent this year and traded 1.6 percent higher at S$1.57 at 10:43 a.m. in Singapore trading, giving the company a stock market value of
S$1.3 billion. That compares with Standard Chartered’s estimate of S$2.13 billion, or S$2.58 a share, for CapitaRetail’s revalued net asset value.
Potential acquirers include private-equity firms and real- estate developers, CBRE said. CapitaLand Ltd., CapitaRetail’s largest shareholder with a 19 percent stake, is also a possible buyer, according to Standard Chartered.
-- In Asia’s real estate market, dealmaking just hit a record. More is coming.
Property deals in China and its Asian neighbors reached a record $34 billion last quarter, a turnaround from the global financial crisis. That tally includes $10 billion for a single site in Seoul’s Gangnam district by a Hyundai Motor Co.-led group and Singapore’s Frasers Centrepoint Ltd.’s bid of more than $3 billion, including debt, for control of Australand Property Group.
CapitaRetail China Trust, a Singapore-listed company with 10 malls in eastern China, is among the next possible targets as it trades below the $1.7 billion estimated value of its assets, said Standard Chartered Plc. Saizen REIT, another Singapore- listed trust that owns about 5,500 apartments in Japan, is also undervalued by that measure. For a global buyout firm or Hong Kong developer, buying a Chinese mall would be a way to profit as the country’s economy becomes more consumer-centric, said CBRE Inc.
“Being in retail is a natural way to frontrun that trend,” Marc Giuffrida, CBRE’s executive director for global capital markets in Asia, said by phone from Singapore. “We see very strong demand in all the key gateway markets for good- quality real estate.”
“Asian consumers have continued to expand spending, creating vast incentives for continued investments,” Priyaranjan Kumar, Singapore-based regional director of capital markets at property-services firm Cushman & Wakefield, said by phone.
Cities across Greater China are the most attractive Asia Pacific locations for international retailers, Jones Lang LaSalle Inc. said in a June report. Economists estimate retail sales will rise at least 12 percent in each of the next three years.
CapitaRetail’s Draw
CapitaRetail’s properties draw 73 million shoppers a year, more than three times the population of Beijing, the company’s website says. Almost every meter of CapitaRetail’s mall floorspace is leased to tenants including Wal-Mart Stores Inc. and fast-food chain KFC.
“Definitely, they could be a target,” said Desmond Chua, a market analyst at CMC Markets Singapore Pte. “It’s an appealing vehicle” to tap Chinese consumers, he said.
Earnings before interest, taxes, depreciation and amortization at CapitaRetail will jump 52 percent to about S$147 million in 2016 from last year, according to analysts’ estimates compiled by Bloomberg. Rental revenue at CapitaMall Grand Canyon in Beijing, the company’s biggest shopping center, may jump 26 percent between 2014 and 2016 as tenants sign up for more expensive leases, Standard Chartered said.
Shares in CapitaRetail have climbed 18 percent this year and traded 1.6 percent higher at S$1.57 at 10:43 a.m. in Singapore trading, giving the company a stock market value of
S$1.3 billion. That compares with Standard Chartered’s estimate of S$2.13 billion, or S$2.58 a share, for CapitaRetail’s revalued net asset value.
Potential acquirers include private-equity firms and real- estate developers, CBRE said. CapitaLand Ltd., CapitaRetail’s largest shareholder with a 19 percent stake, is also a possible buyer, according to Standard Chartered.