Which Blue-Chip Property Developer Is The Cheapest Now?
- Original Post from The Motley Fool Sg

Property stocks took a beating in July when the Singapore government implemented additional property cooling measures. Since then, private condominium prices have declined for two straight months, and analysts expect further corrections in the months ahead.

That said, I still believe the long-term prospects of property in Singapore remains sound. The Monetary Authority of Singapore has said that it wants property prices to rise reasonably and in tandem with wage increases. As such, over the much longer time frame, property prices should increase as wages rise in Singapore.

With property stocks trading some way off their peak, now may be a good time to look for bargains. Here’s a quick look at how the three blue-chip property stocks are valued now.

Price-to-book ratio

The price-to-book ratio is a comparison between the price of a stock and its book value per share. In theory, a stock that is trading at a discount to its book value can pose good value. If a company liquidates its assets and returns the cash to shareholders, investors stand to gain from the price-book value mismatch.

The three property stocks that are part of the Straits Times Index (SGX: ^STI)UOL Group Limited (SGX: U14), CapitaLand Limited (SGX: C31) and City Developments Limited (SGX: C09) – each trade below their book values. The table below shows the price-to-book ratios of the three companies right now.

Source: Author’s compilation and computation of data from Morningstar

As you can see, all three property stocks are trading well below their book values and also below their five-year average. On average, they are selling at a 21.8% discount to their respective averages, with City Developments currently trading at the biggest discount compared to its past.

UOL, however, has the lowest price-to-book ratio currently.

The Foolish bottom line

Clearly, the market does not seem to like Singapore property stocks right now. There is minimal visibility on how the property market in Singapore will move over the next few quarters, and the government has shown that it is not afraid to step in to cool the market if optimism goes out of hand.

However, over the longer time frame, properties in Singapore are most likely going to appreciate as population and wages grow. The long-term fundamentals are intact for these three companies that own, manage and develop properties in Singapore and regionally. With prices well below their historical average, now may be an opportune time to get in cheap.

$CityDev(C09.SI) $CapitaLand(C31.SI) $UOL(U14.SI)

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Can there be a telephone contact before going in to the matter, as I have few questions

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Is UOL Group Limited A Bargain Now?
- Original Post from The Motley Fool Sg

UOL Group Limited (SGX: U14) is a Singapore-listed property company with S$20 billion of assets under management. The property group has is spread across many aspects of the property market such as property development, property investments and hotels operations.

Some of the notable properties in its portfolio include Novena Square, United Square, and Odeon Towers.

Between 1 Janand 31 Dec 2018, UOL’s total return, which includes reinvested dividends has lagged the STI index (SGX: ^STI), with the former dropping 28.8%, while the latter fell 6.5%.

Is UOL a bargain at current prices? For this, the price to earnings (P/E) ratio, the price-to-book (P/B) ratio, the dividend yield and the net debt-to-equity ratio could provide some useful clues.

The real estate conglomerate has a trailing twelve months (TTM) earnings per share of S$0.46. UOL’s current share price stands at S$6.63, which equates to a P/E ratio of 14.4. That is higher than its one-year historical PE ratio of 5.93. Investors, however, should note that UOL’s EPS in the previous year was boosted by one-off gains.

At the end of the third quarter of 2018, UOL reported a net tangible asset value of S$11.24. This implies a P/B ratio of 0.59 at current prices. This means that investors are paying only S$0.59 for S$1 worth of assets. That looks cheap

At end September 2018, UOL had net debt of S$3.97 billion, while total equity stood at S$14.4billion, resulting in a net debt-to-equity ratio of 0.28. Over past its four-year (2014-2017), the real estate conglomerate’s net debt to equity ratio has been between 0.21 and 0.34. This indicates that its current net debt to equity ratio is in the middle of its historical range.

Lastly, UOL’s dividend has been increasing over the last four years moving from S$0.15 at 2014 to S$0.175 in 2017. Assuming the company pays out a dividend at the same rate as 2017 this would lead to a yield of 2.6% at current prices.

Looking at the four metrics, investors can see that UOL is attractively valued based on its P/B ratio. Its mid-range net debt to equity ratio suggests a good balance sheet. And with a 2.6% dividend, UOL might be a company to consider.

But this should only be a starting point for further evaluation.

The Motley Fool Singaporewriter Esjay contributed to this article. Esjay does not own shares in UOL Group.


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CapitaLand Limited to Buy Ascendas-Singbridge in S$11 Billion Deal
- Original Post from The Motley Fool Sg

CapitaLand Limited (SGX: C31) has set its sights to be the largest real estate investment manager in Asia.

This morning, CapitaLandrevealed that it has entered into a deal with Temasek, one of the Singapore government’s investment arms, to fully acquire Ascendas Pte Ltd and Singbridge Pte Ltd. The duo, which are collectively known as Ascendas-Singbridge, are subsidiaries of Temasek.

The deal is valued at S$11 billion and is subject to approval by CapitaLand’s shareholders at an Extraordinary General Meeting (EGM) to be convened later this year. If approved, CapitaLandwould become Asia’s largest diversified real estate group.

More on Ascendas-Singbridge

Ascendas-Singbridge is a leading provider of business space solutions in Singapore. The Ascendas arm owns business space, industrial development platforms, as well as fund management platforms. Meanwhile, Singbridge’s expertise is in developing large scale urban development projects. Ascendas-Singbridge’s business spans 11 countries, including Singapore, China, India, Australia, the United Kingdom, and the United States.

Ascendas-Singbridge is also the sponsor, manager, and significant unitholder of Ascendas Real Estate Investment Trust(SGX: A17U),Ascendas Hospitality Trust(SGX: Q1P), andAscendas India Trust(SGX: CY6U).

How Will the Deal Benefit CapitaLand?

As a real estate company, assets under management (AUM) is one of the key drivers of CapitaLand’s business.

Following the Ascendas-Singbridge deal, the combined AUM of the enlarged CapitaLand will exceed S$116 billion, making the company the ninth largest real estate investment manager in the world by AUM. For context, CapitaLandis currently at the 14th spot with S$93 billion in AUM. The deal will also allow CapitaLand to reach its 2020 AUM target of S$100 billion earlier.

Furthermore, the property classes in CapitaLand’s ecosystem will be expanded with the deal to include logistics, business parks, industrial, data centres, lodging, commercial, retail and residential businesses. The company’s geographical presence will also span more than 180 cities across 32 countries.

What Are the Financial Terms of the Deal?

The transaction’s enterprise value is S$10.91 billion, comprising S$6.04 billion in equity value and S$4.87 billion in net debt and minority interest. CapitaLand will pay Temasek S$6.04 billion, which will be funded by 50% in cash and 50% in new CapitaLand shares.

CapitaLand intends to finance the cash portion with debt and other options, but the company also made clear that it has no plans to issueadditionalnew shares for the cash portion. For the remaining 50% of the deal that will be funded by the issuance of new CapitaLand shares, the company intends to issue 862.3 million at a price of S$3.50 each; the issue price is 7% higher than CapitaLand’s share price of S$3.27 as of 11 January 2019.

If the transaction closes successfully, Temasek’s stake in CapitaLand will increase from 40.8% to 51%.

The deal will immediately increase CapitaLand’s earnings per share (EPS) and return on equity (ROE). But, there will be a slight dilution in net asset value (NAV) per share and an increase in leverage.

CapitaLand plans to lower its leverage through asset recycling and cash from operations. The property giant added that there would be no change to its dividend policy.


The EGM to approve the deal is expected to be held by the first half of 2019. As an interested party, Temasek and its associated entities will not be allowed to vote on the Ascendas-Singbridge acquisition at the meeting.

A whitewash resolution will also be tabled at the EGM for CapitaLand’s shareholders to waive the obligation on Temasek to make a mandatory general offer for CapitaLand’s shares which it does not own.

The deal is expected to be completed by the third quarter of 2019.

The Foolish Takeaway

Overall, I see the deal as a positive for CapitaLand’s shareholders, even though there will be aslight dilution in book value per share and higher leverage. If the deal is approved, CapitaLand’s AUM will rise by 25%. The increase in AUM will also give the company the financial clout to broker larger deals to further its AUM-growth in the years ahead.

CapitaLand had halted trading of its shares this morning before the market opened, and trading has yet to resume as of the time of writing.

$CapitaLand(C31.SI) $Ascendas Reit(A17U.SI) $CapitaLand(C31.SI) $Ascendas-iTrust(CY6U.SI) $Ascendas-hTrust(Q1P.SI)

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Is CapitaLand Limited’s (SGX: C31) Share Price A Bargain Now?
- Original Post from The Motley Fool Sg

CapitaLand Limited (SGX: C31) is one of the largest real estate companies in Asia with assets under management (AUM) totalling a staggering S$92.8 billion as at 30 September 2018.

The real estate conglomerate has built many iconic buildings around the world. In Singapore, CapitaLand’sION Orchard is one of the landmark locations along Orchard Road. Meanwhile, Raffles City Beijing and Raffles City Chongqing are another two noteworthy CapitaLand developments located in China.

The above are just three examples of the numerous assets the company owns. CapitaLand has a presence in more than 170 cities spread across 30 countries with its two core markets in Singapore and China.

The real estate conglomerate has a diversified portfolio spanning many aspects of the real estate business. That includes the development of residential and commercial properties, owning and managing shopping malls, offices and serviced apartments. CapitaLand also has stakes in 16 private Funds and five REITs, includingCapitaLand Mall Trust (SGX: C38U), CapitaLand Commercial Trust (SGX: C61U), Ascott Residence Trust (SGX: A68U) and CapitaLand Retail China Trust (SGX: AU8U) in Singapore and CapitaLand Malaysia Mall Trust (KLSE: 5180) in Malaysia.

Going Down

For 2018, CapitaLand’s total returns were a negative 16.2%. In comparison,the Straits Times Index (^STI) recorded a 12.3% decline. Given its decline, it would be a good time to check-in to see how the company is valued.

With that in mind, let’s analyze the CapitaLand’s financials to understand how the company is doing and if it is a bargain at current prices. For this, we will be using four metrics, price to earnings (P/E) ratio, price to book (P/B) ratio, dividend yield and net debt to equity ratio.

Going Up?

The real estate conglomerate has a diluted trailing twelve months (TTM) earnings per share of S$0.333. The company’s current share price stands at S$3.25. The implied P/E ratio would be 9.8 which is higher compared to its historical PE ratio of around 9.0.

At the end of the third-quarter of 2018, CapitaLand reported a net asset value of S$4.34. Based on this figure, we get a P/B ratio of 0.75. A company with a P/B ratio of less than 1 implies that investors are getting the assets held by the company for a discount, adding a margin of safety for investors.

Moving on, we can look at its net debt to cash position. As at end September 2018, the company had a net debt of S$16.5 billion and total equity of S$32.7 billion, indicating a net debt to equity ratio of 0.51. Between 2014 and 2017, CapitaLand had a net debt to equity ratio of between 0.41 to 0.57.

Lastly, the company’s dividend has been increasing over the last four years from S$0.09 at 2014 to S$0.12 in 2017. Assuming the company pays out a dividend at the same rate as 2017, we would get a dividend yield of 3.8% at current prices.

Pulling Everything Together

Looking at the four metrics, it seems like CapitaLand might be a bargain at current prices based on all four metrics above. Investors, however, should dig deeper into the company to understand its business better before deciding to invest.

$SGX(S68.SI) $Ascott Reit(A68U.SI) $CapitaR China Tr(AU8U.SI) $CapitaLand(C31.SI) $CapitaMall Trust(C38U.SI) $CapitaCom Trust(C61U.SI)

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3 Singapore REITs Institutional Investors Have Been Selling
- Original Post from The Motley Fool Sg

There are many ways to find investment insights. Some useful ways are to screen for stocks or to look at a list of stocks near their 52-week lows to sieve out potential bargains. Studying what institutional investors have been buying or selling is another avenue.

Institutional investors are typically large investment organisations, such as hedge funds, mutual funds, unit trust companies, sovereign wealth funds, insurance companies and so on. These investors tend to possess vastly greater resources than individual investors like you and me when researching stocks. Hence, it may be useful to keep a close eye on what they are doing, as a way to generate ideas.

In this article, I will look at three Singapore REITs that have seen the highest net disposal in dollar value by institutional investors for the week ended 28 December 2018. They are Ascendas Real Estate Investment Trust(SGX: A17U), CapitaLand Commercial Trust (SGX: C61U) and Mapletree Logistics Trust (SGX: M44U).

Source: Singapore Exchange; SGX Stock Facts

The first Singapore REIT that saw its shares sold off by institutional investors is Ascendas REIT. As a quick introduction, Ascendas REIT owns properties that are used for either commercial or industrial purposes or both. It has properties in Singapore, Australia, and United Kingdom.

In the latest quarter ended 30 September 2018, Ascendas REIT reported that gross revenue improved as compared to the same period last year (up 1.1%) due to new acquisitions in Australia and UK. On the other hand, distribution per unit (DPU) declined 4.2% mainly due to an increase in the number of share units. As of 30 September 2018, the REIT’s gearing stood at 33.2% while its committed occupancy rate stood at 90.6%.

Mr William Tay, Chief Executive Officer and Executive Director of the Manager commented:

“We had a very active quarter and made significant progress in expanding into the UK. We also raised equity in anticipation of the second UK portfolio acquisition which was completed in October 2018. Besides Singapore, our long term strategy is to build up our portfolio in Australia, the UK and also into Europe.”

The next Singaporean REIT that saw its shares sold off by institutions recently is Capitaland Commercial Trust or CMT.

As a quick introduction, CMT is one of the largest commercial real estate investment trusts (REITs) in Singapore by market capitalization that is managed by CapitaLand Limited (SGX: C31). The REIT has ownership over nine commercial properties in Singapore and one property in Germany.

In the latest quarter ended 30 September 2018, CMT reported that all financial metrics are stronger than those of last year. The year-on-year improvement in gross revenue and net property income (NPI) was “due to the strategic acquisitions of Asia Square Tower 2 and Gallileo, partially offset by the divestments of Wilkie Edge and Twenty Anson1.” As at 30 September 2018, the retail REIT clocked in a gearing ratio of 35.3% while its occupancy rate stood at 99.2%.

In all, CapitaLand Commercial Trust had a good quarter with stronger metrics across the board.

The last Singapore REIT with significant net selling by institutional investors is Mapletree Logistics Trust or MLT.

As a quick introduction, MLT is a real estate investment trust (REIT) that owns 139 logistics properties around Asia-Pacific region that includes Singapore, Hong Kong, Japan, China, South Korea, Australia and others.

Similar to CMT, MLT reported a solid quarter with strong numbers. Let’s look at some numbers below.

In the latest quarter ended 30 September 2018, MLT reported that gross revenue grew 13.8% year-on-year to S$ 106.6 million while net property income (NPI) improved by 14.6% during the period to S$ 90.2 million. Also, distribution per unit (DPU) was up by 3.8% year-on-year to 1.958 cents. The stronger performance was mainly driven by growth from the existing portfolio as well as contributions from two acquisitions in Hong Kong.

Ms Ng Kiat, Chief Executive Officer of MLT’s manager, commented:

“Over the past 12 months, we have gained significant momentum in our portfolio rejuvenation and recycling efforts, thereby increasing the proportion of modern-specs properties in MLT’s portfolio, especially in our core markets with growth potential. We will continue to build on this momentum to future-proof our portfolio.”

Overall, the performance was solid, especially when the 3.8% year-on-year growth in DPU was achieved despite an increase in shares from 2.5 billion last year to 3.2 billion this year.


Looking at what institutional investors are doing could be a useful tool in your toolkit when sourcing for investment insights. But do note that the information presented here is by no means a recommendation to take any action on the stocks mentioned. Instead, it should be viewed only as a useful starting point for further research.

$Ascendas Reit(A17U.SI) $CapitaLand(C31.SI) $CapitaMall Trust(C38U.SI) $Mapletree Log Tr(M44U.SI)

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3 Things You Should Know About Singapore’s Stock Market Today
- Original Post from The Motley Fool Sg

Welcome to a brand-new week, everyone. Here are three things about the local stock market that you might be interested in today.

1. The Straits Times Index (SGX: ^STI) climbed 43.6 points, or 1.4%, to end the day at 3,102.8. Of the 30 index components, 22 finished in the green, with Venture Corporation Ltd (SGX: V03) leading the pack. The electronics manufacturing service provider’s shares rose 5.3% to S$14.40 each.

Meanwhile, the biggest loser of the index was Dairy Farm International Holdings Ltd (SGX: D01), which fell 1% to US$9.01. Three other blue-chips finished Monday in the red, with the remaining four ending the day unchanged.

2. CapitaLand Limited (SGX: C31) is acquiring a prime office building in Shanghai, China.

In an announcement before the stock market opened today, CapitaLand said that it has formed a 50:50 joint venture with an unrelated third party to acquire around 70% of Pufa Tower in Shanghai, China, for 2.75 billion yuan (S$546.3 million). The real estate would be a seed asset for a value-add fund which the property giant is setting up to invest in commercial properties in Asia’s key gateway cities.

The acquisition also marks CapitaLand’s first commercial property in Shanghai’s core Lujiazui central business district (CBD) in the Pudong New Area.

Lucas Loh, CapitaLand’s president for China and investment management, said:

“We are pleased to enter Shanghai’s core Lujiazui CBD soon after securing our third Raffles City development in the city. Shanghai is the top investment destination in China, with strong end-user demand for commercial properties. The acquisition of Pufa Tower, an operational asset, will immediately contribute to the Group’s recurring income. It will also strategically diversify CapitaLand’s commercial portfolio into a key CBD to capture new growth, while entrenching the Group’s leadership as the foreign developer with the largest portfolio under management in Shanghai.”

CapitaLand sees significant potential to enhance Pufa Tower’s asset value through a comprehensive asset enhancement initiative. The property, a 34-storey tower with three basement levels of car park, has not undergone a major renovation since its completion in 2002.

CapitaLand’s share price closed at S$3.14 today, up 2.6% for the day.

3. Elsewhere, SPH REIT (SGX: SK6U) added 1% to S$1.02.

On Friday (4 January), the retail real estate investment trust (REIT) announced its financial results for the first quarter ended 30 November 2018. Gross revenue for the reporting quarter went north by 0.6% year-on-year to S$53.8 million, but its net property income went south by 1% to S$41.8 million. Distribution per unit held steady at 1.34 Singapore cents. To know more about SPH REIT’s latest earnings, you can head here.

$STI(^STI.IN) $CapitaLand(C31.SI) $DairyFarm USD(D01.SI) $SPHREIT(SK6U.SI) $Venture(V03.SI)

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