Multiple projects to come on stream
GuocoLand is a Singapore-listed real estate developer and manager with a
focus on integrated developments across three core markets, namely
Singapore, China and Malaysia. We met the company management recently.
Management mentioned that the various integrated development properties,
including Tanjong Pagar Centre in Singapore and two Guoson Centres in China,
are currently on track for their completion in the next 12-18 months. According
to management, these together with continuous residential sales across the
markets, should see better earnings growth going forward. Management is
also open to options that could help realize and unlock asset value.
Singapore a key focus market
With the office and the retail portion of Tanjong Pagar Centre to be ready by
mid next year, Singapore will be one of the key focuses for the group.
Management acknowledged the increasing competition in the office market
but cited its strategy to balance occupancy and rents. Several leases have
been committed with tenants across multiple industries. On the residential
side, only 20 units were left at Goodwood Residence with prices recovering
slightly to about S$2,400psf. While QC charge has kicked in, management is in
no rush to cut price further due to the minimal amount. For Leedon Residence,
the group will be more aggressive in marketing with target ASP for the whole
project at S$1,900 psf.
Guosen Centre Beijing Dongzhimen back in play?
Management indicated that the title for Guosen Centre Beijing has been
received post the court ruling in September 2014. That said, the group is
currently redoing their feasibility study on the project to update the product
offering. Management is also open to options that could allow faster return of
capital including stake sales. In Shanghai, Guosen Centre Chengfeng phase
two is on track for its completion this year with residential to be launched in
the later part of 2015.
Capital management and valuation
Management is comfortable with the current gearing of 150%, citing c.50%
debt is project level funding
. GuocoLand is currently trading at 0.8x P/B and
21x consensus FY15 P/E, versus sector average of 0.96x P/B and 27x FY15 P/E. (Read Report)
Read Related Report
Source : Deutsche Bank Markets Research
Labels: GuocoLand, Property Sector