Frasers Property (formerly: Frasers Cpt (FCL))

those who were holding back must have known about the rising unemployment figures and got cold feet. Looks like FCL will have another piece of the australian pie.

I have got round to look at ALZ's financials since 06 - 2 years before the GFC axe fell:

ALZ still sitting on net writeoff since gfc erupted... from 08 till now, for the inv prop div net writeoff amounted to 77m total cumulative writeoff for development division totalled 278m.

Even for the 1H14, ebit of residential div is a mere 1/3 of FY12 and FY13, about 40% of FY09 and FY10 say around 25% of the boom years from FY06-08.

With momentum in Aussie residential sector due to lowest interest rate environment since 1960s, ALZ has value extraction potential. Of course FCL paid a record price for alz but have to give Towkay benefit of the doubt since his has been a man with good acumen for big deals.

The Road Forward for FCL:

i) Gearing will rise but not what the market is expecting as there are many ways to slice a cow:

a) Strategic partner(s) waiting in the wings - FCL has a successful Japanese in http://www.sekisuihouse.com.au/home-builder-australia.

Based on previous news article - the Japanese property company is the second largest in Japan and would be more than willing to participate in FCL's ALZ forays.

FCL has taken the initiatives to mount a mega bid for ALZ - even beating Australian propety bigwig Stockland. Hence, there is definitely good value in the eyes of the local. Somehow, I just can't help but to keep digging Capland -professionals at cutting losses and gains.

b) Extraction of values from investment property holdings in the commercial sector (small) and ind property portfolio (reported to be quite hot and will be buoyant further with improvements in infrastructure to be implemented over the next decade by a infrastructure friendly government.

FCL has Frasers Commercial Trust for yield accretive disposals given that FCOM is no stranger to Australian mkt. Alternatively, there will be no shortage of suitors to selectively unlock values and disposed off to global pension and SWFs alongside with overseas and local property suitors

The main issue facing many global developers presently is the lack of quality assets at reasonable prices. ALZ presents an established platform for FCL that has an equally established and impressive developer cum REIT platform for continued value extractions via ongoing residential developments and quality recurrent income via office and industrial properties.

The market may deemed ALZ as too big a purchase for FCL in the immediate term. However given that big names from Singapore such as City Dev, Suntec and numerous big China property companies are making a beeline down under, FCL and Towkay Charoen has certainly pulled another coup for a FT owned Singapore flagship Down Under.

If you ask me which property market is more risky - Australia or China? There is no prize for guessing.

HU8TPPY
Vested
GG

Australand falls to Frasers
THE AUSTRALIAN AUGUST 08, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
Share price chart for Australand
Share price chart for Australand Source: TheAustralian
DEVELOPER and investor Australand looks set to fall into ­Singaporean hands again, with Frasers Centrepoint passing a key threshold in its $2.6 billion takeover, securing more than 50.1 per cent of shares.

The last-minute support saw Frasers’s $4.48-a-share cash offer turn unconditional and gives shareholders another two weeks to accept. Frasers confirmed ­yesterday evening it had secured 56.8 per cent of Australand.

Its success puts pressure on Stockland, which owns 19.9 per cent of the company, to accept the offer.

However, sources said Stockland could hold out and seek a side deal over certain assets with Frasers to secure support for the offer.

Frasers chief executive Lim Ee Seng indicated his group’s desire to control all the elements of Australand’s business, saying the deal would deliver the company ownership of an attractive commercial and industrial portfolio with ­development capabilities, as well as boosting it’s local residential development capabilities.

“Australia is a core market for FCL, and we look forward to ­exciting times ahead for our Australia business,” he said.

Frasers plans to delist Australand if it reaches its next hurdle of obtaining 90 per cent of the company’s stock. Last night, Frasers again ­pushed for the holdout shareholders to accept.

Its appeal for acceptances came after the bid went down to the wire yesterday.

The company, controlled by Thailand’s Chang Beer baron Charoen Sirivadhanabhakdi, was forced to wait until late afternoon before knowing whether it had achieved the crucial 50.1 per cent condition of the offer.

Among the sellers were a ­cavalcade of hedge funds that had taken up positions on ­Australand’s register, including GLG Partners, P-Squared and Och-Ziff.

But Pacific Alliance Group, which was rumoured to have been stalking Australand earlier in the year, is understood to have baulked at accepting the offer.

The hedge funds are understood to have used the institutional acceptance facility that meant the shares only transferred once the key milestone of 50.1 per cent had been reached.

It is thought some tinkering by Frasers with the fine print of its acceptances policy — to allow the ­inclusion of shares sold into the institutional acceptance facility in the overall count — will be instrumental in getting the deal across the line.

CLSA analyst John Kim said the deal showed that Australian property was in very high demand from both local and offshore groups.

Australand was advised by Macquarie and Fort Street while Deutsche Bank and Standard Chartered advised Frasers.

Frasers’ take out of Australand marks the second time in less than a year the company has counted a major Singaporean property company as its largest shareholder.

Earlier this year, Singapore’s CapitaLand sold its 40 per cent stake, sparking a takeover tilt by Stockland that was initially rebuffed by Australand.

Stockland later returned with a higher offer, only to be trumped by a higher, all-cash bid by ­Frasers.

Towkay Charoen's classy overture on Australand continued his Godfather style corporate forays since the mega F&N buyout. IMHO based on my tracking of Australian real estate market relative to that of global asset markets, it represents astute leadership and foresight.

SGP won't be able to hang out for too long as they are answerable to their own holders that will hold the professional management for their inability to get any benefits post the GO should the angmos remain iron-teeth.

Stockland won't budge on Australand Takeover

Mercedes Ruehl, Samantha Hutchinson and Matthew Cranston
435 words
9 Aug 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Stockland Group is holding out on ­Frasers Centrepoint even as the Singaporean giant gained further acceptances from investors in its $2.6 billion takeover of Australand Property Group.

Industry sources said Stockland may be playing a "game of chess" in trying to win some of ­Australand's prime assets by holding onto its 19.9 per cent stake as leverage. As of Friday, Frasers held more than 60 per cent of Australand. At about 70 per cent, Australand will move out of the index and index funds such as ­Vanguard will also sell out.

Stockland stands in the way of Frasers moving to a full compulsory acquisition ­of Australand. The group stands to make an $85 million profit if it sells its holding.

Others suggested the Stockland, led by Mark Steinert, would wait until its full-year results on August 18. Frasers' offer period was extended until August 21 on Thursday after the Asian group crossed the 50 per cent acceptance level and the bid was declared unconditional.

Stockland declined to comment when contacted by Weekend AFR.

Mr Lim Ee Seng, Group Chief ­Executive Officer of Frasers told Singapore's stock exchange he looked forward to exciting times for the group's ­Australian ­business.

s for the group's ­Australian ­business.

"Acquiring an interest of greater than 50 per cent in Australand represents a significant milestone towards achieving our strategic objective of balancing growth across asset classes and ­geographies, along with the many other significant benefits that will result from this transaction," he said.

Thai billionaire Charoen Sirivadhanabhakdi is the majority shareholder in Frasers. He also owns the giant Asian alcohol producer ThaiBev.

Frasers already has a large ­development business in Australia, with a pipeline of 2300 high-end apartments including Central Park in Sydney and Queens Riverside in Perth.

The group also manages stakes in properties such as Perth's Central Park and Canberra's Chisholm Centre for ­Singapore-listed real estate investment trusts, and has most recently taken ­ownership of Sydney's Sofitel ­Wentworth hotel in a high-profile deal.

The group has given investors little indication how it will manage ­Australand's portfolio which has a ­substantial industrial and largely ­suburban office component, in addition to one of the country's largest pipelines of residential house and land packages.

Australand was advised by Macquarie and Fort Street while Frasers was advised by Deutsche Bank and Standard Chartered. Stockland is being advised by Citigroup, Merrill Lynch and UBS.

Australand securities closed up 1¢ on Friday to $4.49.


Fairfax Media Management Pty Limited

Document AFNR000020140808ea8900021

Big or small (Greenland, City Dev, Suntec, Ho Bee, St******, Aspial, Fragrance, CES), many cashed up Asian developers have been making or looking to make a beeline for Aussie real estate assets. Securing Australand for its large and established platform will tap into established local management that will help minimise the incidence of regulatory red tapes...

Australand takeover first of a wave

SARAH DANCKERT, TAKEOVERS
485 words
9 Aug 2014
The Australian
AUSTLN
English
© 2014 News Limited. All rights reserved.
THE looming $2.6 billion takeover of Australand by Singapore’s Frasers Centrepoint could mark the first of a wave of corporate plays by cashed-up Asian groups looking to launch into Australia as their home markets slow.

The bid has been well-received by local analysts and fund managers, who praised rival bidder Stockland’s discipline in not overplaying its hand. Others said there was still a chance for Stockland to pick up some assets out of the Australand portfolio if it was able to negotiate an asset-for-equity swap with Frasers.

BT Investment Management head of property securities Peter Davidson said Stockland would look to do a carve-out in exchange for its 19.9 per cent stake in the company. “Basically it’s two major investors sitting in a room playing poker with each other over the ­assets,” Mr Davidson said. “There is a conga line of buyers for high-quality assets. The only question is which trust, which collection of high-quality assets, is next?” The prizes in Australand’s portfolio from Stockland’s perspective are its apartments business and several of its commercial and industrial assets and development opportunities.

JPMorgan analyst Richard Jones said the takeover provided a very good pricing comparison for the two listed companies considered comparable to Australand — Stockland and Mirvac.

“We’re pleased to see some discipline shown by Stockland management and we would ­expect that they will sell into the offer and take their profit,” Mr Jones said.

Stockland stands to make $85 million from the sale of its stake in Australand into the Frasers offer.

Antares Equities investment manager Brett McNeill, whose company owns a stake in Stockland, said Stockland should now prove up the value of its underlying business.

“They can do this by demonstrating a focused strategy and strong cost control, while delivering improved profitability in the residential and retirement divisions, as well as hitting their target yields on the retail development projects,” Mr McNeill said.

Phoenix Portfolios managing director Stuart Cartledge also praised Stockland’s discipline, saying the sector had a “sorry” track record of overpaying and underdelivering.

“I guess it means Stockland is on the slow road to glory and not the fast road,” he said.

“They can now build the high-density development capability in-house and while it will take longer, I expect the risks associated with it will be materially lower.” Analysts in Singapore covering Frasers also praised the deal. CIMB analyst Tan Xuan said Frasers was expected to undertake a strategic review of Australand and would possibly shed more light on its future plans thereafter.“This can be a key catalyst, allowing investors to understand its rationale as well as its future plans to unlock Australand’s value,” Ms Tan said. She said the acquisition would allow Frasers to replenish its recently depleted land bank.


News Ltd.

Document AUSTLN0020140808ea890002t

Results Out... 1st posting on 11 Aug... Typical Towkay style...

http://infopub.sgx.com/Apps?A=COW_CorpAn...1fc42dbd73

Frasers Centrepoint Limited Reports 77% Jump in 3Q FY13/14
Attributable Profit before Fair Value Change and Exceptional Items
 Attributable Profit before Fair Value Change and Exceptional Items surged on the back of
project completions in China, sale of completed units in Australia and UK, as well as the
divestment of Changi City Point
 Extension of REIT strategy with the injection of six serviced residences into the Group’s
newly-listed Frasers Hospitality Trust and divestment of Changi City Point to Frasers
Centrepoint Trust
 Launched takeover of Australand in a transformational transaction that is in line with FCL’s
strategy and will deliver significant benefits to FCL

(11-08-2014, 06:45 AM)greengiraffe Wrote: Results Out... 1st posting on 11 Aug... Typical Towkay style...

http://infopub.sgx.com/Apps?A=COW_CorpAn...1fc42dbd73

Frasers Centrepoint Limited Reports 77% Jump in 3Q FY13/14
Attributable Profit before Fair Value Change and Exceptional Items
 Attributable Profit before Fair Value Change and Exceptional Items surged on the back of
project completions in China, sale of completed units in Australia and UK, as well as the
divestment of Changi City Point
 Extension of REIT strategy with the injection of six serviced residences into the Group’s
newly-listed Frasers Hospitality Trust and divestment of Changi City Point to Frasers
Centrepoint Trust
 Launched takeover of Australand in a transformational transaction that is in line with FCL’s
strategy and will deliver significant benefits to FCL

The result was within expectation, but it seems the cash will be re-deployed on more M&A, rather back to shareholders as dividend(s).

It is still a good company, but deviated from my story, thus divested last week, together with F&N in earlier time.

F&N investment was a special-situation story, and the divestment has dragged too far. Time to re-deployed the capital for new opportunities

Wish all the best for remaining shareholders.

(divested both FCL and F&N)

(11-08-2014, 09:38 AM)CityFarmer Wrote:

(11-08-2014, 06:45 AM)greengiraffe Wrote: Results Out... 1st posting on 11 Aug... Typical Towkay style...

http://infopub.sgx.com/Apps?A=COW_CorpAn...1fc42dbd73

Frasers Centrepoint Limited Reports 77% Jump in 3Q FY13/14
Attributable Profit before Fair Value Change and Exceptional Items
 Attributable Profit before Fair Value Change and Exceptional Items surged on the back of
project completions in China, sale of completed units in Australia and UK, as well as the
divestment of Changi City Point
 Extension of REIT strategy with the injection of six serviced residences into the Group’s
newly-listed Frasers Hospitality Trust and divestment of Changi City Point to Frasers
Centrepoint Trust
 Launched takeover of Australand in a transformational transaction that is in line with FCL’s
strategy and will deliver significant benefits to FCL

The result was within expectation, but it seems the cash will be re-deployed on more M&A, rather back to shareholders as dividend(s).

It is still a good company, but deviated from my story, thus divested last week, together with F&N in earlier time.

F&N investment was a special-situation story, and the divestment has dragged too far. Time to re-deployed the capital for new opportunities

Wish all the best for remaining shareholders.

(divested both FCL and F&N)

FCL is seperately listed not for the purpose of returning cash. The main reason for the listing is for the purpose of expansion. If any companies are to continue listing, then a good company will allocate its precious capital with a right level of risks assume.

As an allocator of capital, one has to take into consideration of one's risk/reward profile. Under present global equity conditions, it is likely that property stocks will have underweightings in most global funds. However, being underweight does not mean totally no exposure hence within my own portfolio, FCL remains a good solid pick.

IMHO, once the Australand takeover is concluded and a clearer roadmap is being rolled out to extract value from Australand, FCL will be further re-rated.

Business is always very tough and the stock market makes a mockery of how difficult business strategies are being executed. having said that, equity investments remains a good avenue for wealth accumulation should it be done with skill, intergrity and morality.

GG

Charoen seems more focussed on diversifying regionally than deleveraging - blowing 876mio USD on Vietnam now.

http://www.bloomberg.com/news/2014-08-07...llion.html

(11-08-2014, 10:04 AM)greengiraffe Wrote:

(11-08-2014, 09:38 AM)CityFarmer Wrote:

(11-08-2014, 06:45 AM)greengiraffe Wrote: Results Out... 1st posting on 11 Aug... Typical Towkay style...

http://infopub.sgx.com/Apps?A=COW_CorpAn...1fc42dbd73

Frasers Centrepoint Limited Reports 77% Jump in 3Q FY13/14
Attributable Profit before Fair Value Change and Exceptional Items
 Attributable Profit before Fair Value Change and Exceptional Items surged on the back of
project completions in China, sale of completed units in Australia and UK, as well as the
divestment of Changi City Point
 Extension of REIT strategy with the injection of six serviced residences into the Group’s
newly-listed Frasers Hospitality Trust and divestment of Changi City Point to Frasers
Centrepoint Trust
 Launched takeover of Australand in a transformational transaction that is in line with FCL’s
strategy and will deliver significant benefits to FCL

The result was within expectation, but it seems the cash will be re-deployed on more M&A, rather back to shareholders as dividend(s).

It is still a good company, but deviated from my story, thus divested last week, together with F&N in earlier time.

F&N investment was a special-situation story, and the divestment has dragged too far. Time to re-deployed the capital for new opportunities

Wish all the best for remaining shareholders.

(divested both FCL and F&N)

FCL is seperately listed not for the purpose of returning cash. The main reason for the listing is for the purpose of expansion. If any companies are to continue listing, then a good company will allocate its precious capital with a right level of risks assume.

As an allocator of capital, one has to take into consideration of one's risk/reward profile. Under present global equity conditions, it is likely that property stocks will have underweightings in most global funds. However, being underweight does not mean totally no exposure hence within my own portfolio, FCL remains a good solid pick.

IMHO, once the Australand takeover is concluded and a clearer roadmap is being rolled out to extract value from Australand, FCL will be further re-rated.

Business is always very tough and the stock market makes a mockery of how difficult business strategies are being executed. having said that, equity investments remains a good avenue for wealth accumulation should it be done with skill, intergrity and morality.

GG

I concur. It is a misalignment between my story and the management direction, nothing more.