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Australand sells supermarket for $22m
Simon Johanson
297 words
17 Jun 2015
The Age
AGEE
English
© 2015 Copyright John Fairfax Holdings Limited.
Australand has taken advantage of strong investor appetite to offload a Coles supermarket, which is under construction in Berwick in Melbourne's south-east, for an estimated $22 million.
The off-market transaction for a 3200-square-metre full-line store to a Victorian-based private investor was finalised this year on a sub 6 per cent yield.
The new store's location is a coup for Coles, which has signed a 20-year lease for the site at 2 Richardson Grove in Berwick's Southside shopping complex.
The retail giant's new outlet will replace a Ritchies IGA. It closed its doors late last year.
The Casey area is one of Melbourne's fastest-growing localities and its population is expected to nearly double over the next 21 years.
The new store will strategically position the retail giant within a few blocks of its main competitor, Woolworths, in Lyall Road. The nearest other competitors are in Eden Rise Village to the south, which houses Coles and Aldi stores.
The City of Casey issued a permit to demolish a building on the Richardson Grove site and replace it with the supermarket. It is now under construction by the Maben Group.
Selling agent Savills Australia's Pat De Maria refused to comment on the off-the-plan deal.
Supermarkets, particularly new stores with long lease terms, have become sought-after assets among investors, resulting in significant yield compression over the past two years.
In a sign of demand, a regional FoodWorks in Gisborne and an IGA in Oakleigh South were recently traded in a 24-hour period by CBRE to two different Chinese investors and both sold prior to the end of their campaigns.
Fairfax Media Management Pty Limited
Document AGEE000020150616eb6h00055
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FCL has purchased a portfolio of Malmaison and Hotel du Vin hotels in the UK for c.£364m (S$760m). This would double the group’s European footprint to 4,000 rooms and boost its hospitality exposure to 13% of total assets. We see this acquisition as strategic as it would expand FCL’s reach into the UK tourist market as well as the premium tourist segment with potential to tap new markets in Asia as well as new clientele networks. We estimate the purchase could boost FCL’s earnings by a marginal 1-5% with further upside potential from a visible acquisition pipeline. Maintain Add with an unchanged target price of S$2.02 (30% discount to RNAV).
What Happened
FCL announced the purchase of the Malmaison and Hotel du Vin portfolio of 29 upscale boutique lifestyle hotels in the UK for £363.4m (S$760m; or over 7.5% cap rate) from KSL Capital Partners. Malmaison has upscale boutique heritage hotels situated in iconic buildings such as Malmaison Oxford and the historic Malmaison Dundee. Hotel du Vin operates luxurious lifestyle hotels housed in historic buildings including Hotel du Vin Bristol and Hotel du Vin Wimbledon. This adds 2,082 rooms and doubles FCL’s footprint in Europe to c.4,000 keys. The hotels have enjoyed healthy average occupancy rates of over 80% over the past three years. In addition, there is an immediate pipeline of two hotels with 319 rooms in Aberdeen and Stratford-upon-Avon. FCL will fund this purchase with debt facilities and internal resources.
What We Think
We see the acquisition as strategic as it will increase FCL’s leverage into the key UK tourist market, which saw a 3.7% CAGR over the past four years, via a strong and scalable platform. It will expand the group’s hospitality footprint to 21,144 keys, and it is on track to hit 30,000 rooms by FY19. It will extends the group’s reach into the premium tourist market with potential to introduce these brands into Asia as well as tap into these new networks. In addition, the present management has a strong track record and has identified a pipeline of conversion and asset enhancement opportunities. This will enable FCL to benefit from higher returns in the longer term.
In terms of impact, we believe the portfolio could increase the group’s hospitality AUM by 51% to S$2.2bn, bringing this segment to 13% of total assets. We estimate these contributions could boost earnings slightly by c.1-5%, but will be RNAV neutral in the near term. The purchase would increase the group’s debt-to-equity ratio to 0.92x from 0.84x previously. While this ratio is higher than comparable peers, we believe potential capital recycling would enable the group to bring it down.
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FCL, clsa maintain BUY:
Expanding footprint
Incorporating acquisition sees mild uplift to RNAV and EPS.
We view FCL’s latest acquisition of the MHDV (Malmaison and Hotel Du
Vin) as a strategically positive given the benefits of a higher recurring
income base. Incorporating the latest acquisitions, we lift earnings by
~2% and RNAV by ~1%. That said, net gearing potentially rising beyond
100% net D/E, we have also lowered our dividend payout ratio from 50%
to 40% which is now equivalent to FY14’s DPS of 8.60¢. We continue to
rate FCL a BUY given its resilient recurring income base, opportunities to
further unlock value and potential corporate restructuring which will
drive a rerating of valuations.
Expansion into Europe
FCL has acquired 100% stake in a portfolio of hotels from Malmaison Hotel du
Vin group (MHDV) for a total consideration of GBP363.4m (S$760m)
translating into GBP170,600 per key at 7.5% cap rate. The portfolio of 29
hotels (2,082 keys) spans across 25 key cities in UK and operates under 2
key brands mainly “Malmaison” and “Hotel du Vin”.
Higher recurring income
From a strategic standpoint, we view this acquisition positively as it drives a
higher recurring fee income for the group and expands FCL’s hospitality
business to 129 properties globally across 77 cities with 21,144 keys. This
brings the group one step closer to its target of 30,000 keys by FY19. Postacquisition,
Europe will account for 19% of the hospitality’s total keys, up
from 8% and drive an uplift of S$47m EBITDA or ~6% uplift to FCL’s EBITDA.
Lowering dividend forecasts
The acquisition will be fully funded by debt and we do not rule out issuance of
perpetuals with net gearing rising from the current 85% to 92%. That said,
we believe the group will still have the ability to match FY14’s dividend of
8.60¢/share but unlikely to be higher. As a result, we have trimmed our
dividend payout ratio to 40% which is equivalent to FY14’s DPS of 8.60¢.
Mild accretion to RNAV and earnings
Incorporating the latest acquisitions, we lift up earnings by ~2% and a
correspondingly mild uplift to RNAV from S$3.24/share to S$3.28/share with
target price of S$2.28 pegged at 30% discount to RNAV. We also lower our
dividend payout ratio from 50% to 40% to reflect a higher geared balance
sheet. We continue to like FCL’s for its high recurring income, dividend yield,
opportunities to unlock value and potential corporate restructuring which will
drive a rerating of valuations.
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CLSA analyst think that FCL may issue further perpetuals / debt instrument to refinance the deal.
Given that FCL has already exhausted the MTM program, they would have to up the limit before they can further tap the capital markets.
Akan Datang...
(22-06-2015, 10:36 AM)greengiraffe Wrote: FCL, clsa maintain BUY:
Expanding footprint
Incorporating acquisition sees mild uplift to RNAV and EPS.
We view FCL’s latest acquisition of the MHDV (Malmaison and Hotel Du
Vin) as a strategically positive given the benefits of a higher recurring
income base. Incorporating the latest acquisitions, we lift earnings by
~2% and RNAV by ~1%. That said, net gearing potentially rising beyond
100% net D/E, we have also lowered our dividend payout ratio from 50%
to 40% which is now equivalent to FY14’s DPS of 8.60¢. We continue to
rate FCL a BUY given its resilient recurring income base, opportunities to
further unlock value and potential corporate restructuring which will
drive a rerating of valuations.
Expansion into Europe
FCL has acquired 100% stake in a portfolio of hotels from Malmaison Hotel du
Vin group (MHDV) for a total consideration of GBP363.4m (S$760m)
translating into GBP170,600 per key at 7.5% cap rate. The portfolio of 29
hotels (2,082 keys) spans across 25 key cities in UK and operates under 2
key brands mainly “Malmaison” and “Hotel du Vin”.
Higher recurring income
From a strategic standpoint, we view this acquisition positively as it drives a
higher recurring fee income for the group and expands FCL’s hospitality
business to 129 properties globally across 77 cities with 21,144 keys. This
brings the group one step closer to its target of 30,000 keys by FY19. Postacquisition,
Europe will account for 19% of the hospitality’s total keys, up
from 8% and drive an uplift of S$47m EBITDA or ~6% uplift to FCL’s EBITDA.
Lowering dividend forecasts
The acquisition will be fully funded by debt and we do not rule out issuance of
perpetuals with net gearing rising from the current 85% to 92%. That said,
we believe the group will still have the ability to match FY14’s dividend of
8.60¢/share but unlikely to be higher. As a result, we have trimmed our
dividend payout ratio to 40% which is equivalent to FY14’s DPS of 8.60¢.
Mild accretion to RNAV and earnings
Incorporating the latest acquisitions, we lift up earnings by ~2% and a
correspondingly mild uplift to RNAV from S$3.24/share to S$3.28/share with
target price of S$2.28 pegged at 30% discount to RNAV. We also lower our
dividend payout ratio from 50% to 40% to reflect a higher geared balance
sheet. We continue to like FCL’s for its high recurring income, dividend yield,
opportunities to unlock value and potential corporate restructuring which will
drive a rerating of valuations.
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(22-06-2015, 12:44 PM)greengiraffe Wrote: CLSA analyst think that FCL may issue further perpetuals / debt instrument to refinance the deal.
Given that FCL has already exhausted the MTM program, they would have to up the limit before they can further tap the capital markets.
Akan Datang...
(22-06-2015, 10:36 AM)greengiraffe Wrote: FCL, clsa maintain BUY:
Expanding footprint
Incorporating acquisition sees mild uplift to RNAV and EPS.
We view FCL’s latest acquisition of the MHDV (Malmaison and Hotel Du
Vin) as a strategically positive given the benefits of a higher recurring
income base. Incorporating the latest acquisitions, we lift earnings by
~2% and RNAV by ~1%. That said, net gearing potentially rising beyond
100% net D/E, we have also lowered our dividend payout ratio from 50%
to 40% which is now equivalent to FY14’s DPS of 8.60¢. We continue to
rate FCL a BUY given its resilient recurring income base, opportunities to
further unlock value and potential corporate restructuring which will
drive a rerating of valuations.
Expansion into Europe
FCL has acquired 100% stake in a portfolio of hotels from Malmaison Hotel du
Vin group (MHDV) for a total consideration of GBP363.4m (S$760m)
translating into GBP170,600 per key at 7.5% cap rate. The portfolio of 29
hotels (2,082 keys) spans across 25 key cities in UK and operates under 2
key brands mainly “Malmaison” and “Hotel du Vin”.
Higher recurring income
From a strategic standpoint, we view this acquisition positively as it drives a
higher recurring fee income for the group and expands FCL’s hospitality
business to 129 properties globally across 77 cities with 21,144 keys. This
brings the group one step closer to its target of 30,000 keys by FY19. Postacquisition,
Europe will account for 19% of the hospitality’s total keys, up
from 8% and drive an uplift of S$47m EBITDA or ~6% uplift to FCL’s EBITDA.
Lowering dividend forecasts
The acquisition will be fully funded by debt and we do not rule out issuance of
perpetuals with net gearing rising from the current 85% to 92%. That said,
we believe the group will still have the ability to match FY14’s dividend of
8.60¢/share but unlikely to be higher. As a result, we have trimmed our
dividend payout ratio to 40% which is equivalent to FY14’s DPS of 8.60¢.
Mild accretion to RNAV and earnings
Incorporating the latest acquisitions, we lift up earnings by ~2% and a
correspondingly mild uplift to RNAV from S$3.24/share to S$3.28/share with
target price of S$2.28 pegged at 30% discount to RNAV. We also lower our
dividend payout ratio from 50% to 40% to reflect a higher geared balance
sheet. We continue to like FCL’s for its high recurring income, dividend yield,
opportunities to unlock value and potential corporate restructuring which will
drive a rerating of valuations. GG, do you think that FCPT is a highly leveraged company and therefore high risk?
Posts: 8,305
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22-06-2015, 10:08 PM
(This post was last modified: 22-06-2015, 10:10 PM by greengiraffe.)
(22-06-2015, 08:58 PM)MINX Wrote: (22-06-2015, 12:44 PM)greengiraffe Wrote: CLSA analyst think that FCL may issue further perpetuals / debt instrument to refinance the deal.
Given that FCL has already exhausted the MTM program, they would have to up the limit before they can further tap the capital markets.
Akan Datang...
(22-06-2015, 10:36 AM)greengiraffe Wrote: FCL, clsa maintain BUY:
Expanding footprint
Incorporating acquisition sees mild uplift to RNAV and EPS.
We view FCL’s latest acquisition of the MHDV (Malmaison and Hotel Du
Vin) as a strategically positive given the benefits of a higher recurring
income base. Incorporating the latest acquisitions, we lift earnings by
~2% and RNAV by ~1%. That said, net gearing potentially rising beyond
100% net D/E, we have also lowered our dividend payout ratio from 50%
to 40% which is now equivalent to FY14’s DPS of 8.60¢. We continue to
rate FCL a BUY given its resilient recurring income base, opportunities to
further unlock value and potential corporate restructuring which will
drive a rerating of valuations.
Expansion into Europe
FCL has acquired 100% stake in a portfolio of hotels from Malmaison Hotel du
Vin group (MHDV) for a total consideration of GBP363.4m (S$760m)
translating into GBP170,600 per key at 7.5% cap rate. The portfolio of 29
hotels (2,082 keys) spans across 25 key cities in UK and operates under 2
key brands mainly “Malmaison” and “Hotel du Vin”.
Higher recurring income
From a strategic standpoint, we view this acquisition positively as it drives a
higher recurring fee income for the group and expands FCL’s hospitality
business to 129 properties globally across 77 cities with 21,144 keys. This
brings the group one step closer to its target of 30,000 keys by FY19. Postacquisition,
Europe will account for 19% of the hospitality’s total keys, up
from 8% and drive an uplift of S$47m EBITDA or ~6% uplift to FCL’s EBITDA.
Lowering dividend forecasts
The acquisition will be fully funded by debt and we do not rule out issuance of
perpetuals with net gearing rising from the current 85% to 92%. That said,
we believe the group will still have the ability to match FY14’s dividend of
8.60¢/share but unlikely to be higher. As a result, we have trimmed our
dividend payout ratio to 40% which is equivalent to FY14’s DPS of 8.60¢.
Mild accretion to RNAV and earnings
Incorporating the latest acquisitions, we lift up earnings by ~2% and a
correspondingly mild uplift to RNAV from S$3.24/share to S$3.28/share with
target price of S$2.28 pegged at 30% discount to RNAV. We also lower our
dividend payout ratio from 50% to 40% to reflect a higher geared balance
sheet. We continue to like FCL’s for its high recurring income, dividend yield,
opportunities to unlock value and potential corporate restructuring which will
drive a rerating of valuations. GG, do you think that FCPT is a highly leveraged company and therefore high risk?
For the time being, its a tightly held listed co.
If Towkay Charoen is comfortable with his high stakes (88.2%) and bankers alongside with capital markets are comfortable financing, who are we to comment that FCL is highly geared?
Moreover for property companies, leverage is common. What is more important here is the ability for FCL to sell its development, recycle matured investment properties into REIT platforms and embarked on higher risks newer projects. FCL has also been able to lock in financing at good levels for its leverage.
I m vested and therefore biased.
GG
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Square makes $100 million in sales
Guy Creighton
287 words
24 Jun 2015
South East Advertiser
SOUADV
English
© 2015 News Limited. All rights reserved.
INTEREST prior to the launch of Coorparoo Square development has translated into more than $100 million in sales.
A mix of first-home buyers, downsizers and investors have bought 190 apartments in the first stage so far, according to Honeycombes Property Group managing director Peter Honeycombe.
The $232 million Coorparoo Square development will comprise more than 360 apartments and a retail precinct with cinemas.
The project is a joint-venture between Honeycombes Property Group and Australand.
Mr Honeycombe said close to 2000 prospective buyers from Brisbane and interstate had registered early interest in the development.
“Coorparoo Square has stirred up a lot of interest, not only because of the nature and size of the project, but also due to the longstanding anticipation in the community about what’s happening on such a pivotal site in the heart of the Coorparoo,” he said.
Mr Honeycombe said downsizing had dominated the sale of two-bedroom plus media room and three-bedroom apartments, while first-home buyers and investors had focused on the one- and two-bedroom configurations.
NEW SEARCH TOOL AS buying property becomes harder in some areas, home buyers have been given a new tool by realestate.com.au to find the best home for the right price.
The tool, Discover, allows homebuyers to search out suburbs with all the same attributes as their preferred location, but which may be more affordable.
REA Group chief digital officer Henry Ruiz said Queensland buyers after a one-bedroom apartment in New Farm who could afford a monthly repayment of $1600 would be recommended to look in Kangaroo Point, Spring Hill, Milton and West End.For more, visit: realestate.com.au/discover
News Ltd.
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Herston Quarter revived
ROSANNE BARRETT
241 words
25 Jun 2015
The Australian
AUSTLN
English
© 2015 News Limited. All rights reserved.
Government: The Queensland government has reopened the door to the development of a major, master-planned Brisbane site, the Herston Quarter, in a field understood to include major players Australand, Brookfield Multiplex, Lend Lease and Grocon.
Since the election of Labor in January the process to overhaul the 4.8ha site adjacent to the Royal Brisbane Hospital had publicly been on hold.
But yesterday Treasurer Curtis Pitt told a Property Council function the government would announce short-listed proponents in the “near future”.
“There is still more work to be done on Herston Quarter,” Mr Pitt said. “There has been some criticism that as a government we have been holding up proposals or projects. We are about ensuring we do things in a measured and responsible way. We are not just going to take for granted proposals that have been done in the past were correct.” He said the government was focused on developing a health and biomedical precinct alongside the residential and retail zone, which is adjacent to Lend Lease’s $2.9 billion redevelopment of the Brisbane Showgrounds precinct.“The primary use of the site,” Mr Pitt said, “will remain, as we promised, for health-related activities, be that biomedical research, a mix of public and private hospital facilities, as well as residential and retail space for doctors, nurses, family and friends visiting patients at the nearby Royal Brisbane and Women’s Hospital.”
News Ltd.
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