It said it can capitalise on opportunities brought about by property curbs.
Year to date, CapitaLand has sold about $3.1b worth of assets, exceeding its target of $3b per annum, and made investments worth around $2.6b, including the latest acquisitions, RHB Research said. According to a research note, CapitaLand said that it is in a good financial position to capitalise on any opportunities arising from the recent cooling measures.
Overall, CapitaLand aims to grow its total assets under management (AUM) to $100b by 2020 (now $93.1b), with a balanced asset mix from emerging and developed markets. Investment properties are targeted to account for 80% of its income, with development properties accounting for the rest.
Its latest $777.8m transaction in Sengkang Central involved a partnership with City Developments. The new non-remittable and revised additional buyer’s stamp duty (ABSD) charges do not apply here, as the tender closed (21 June) before the latest cooling measures.
“Assuming an 80:20 mix for residential/commercial components, we estimate blended average selling price (ASP) of ~$1,700psf, translating into a net margin of ~13%,” said RHB Research analyst Vijay Natarajan.
Last week, CapitaLand announced the award of two prime residential sites in Guangzhou for CNY2.05b, or about $409.3m. The sites can yield about 1,300 units and comes close on the heels of the Chongqing site acquisition in June
“We estimate high-teen margins for the redevelopment based on our ASP assumptions of CNY27,000 psm. With the expected handover of more than 8,000 units from 3Q2018 (~CNY16.2b in value), the move is a timely replenishment of its landbank,” said Natarajan.
Separately, the company repurchased about 3.5 million over the past week. “YTD, we calculate that it has bought back around 86 million shares. The buybacks are NAV-accretive and should boost ROE, as shares were bought back at ~10-25% discount to its book value,” Natajaran concluded.
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