Frasers Property (formerly: Frasers Cpt (FCL))

The deals keep coming in the REIT sector
THE AUSTRALIAN SEPTEMBER 06, 2014 12:00AM

Sarah Danckert

Property Reporter
Melbourne
THE rash of takeovers in the real estate investment trust sector is being balanced by a run of new high-yielding floats.

While Australand Property Group will soon disappear from the Australian Stock Exchange, following the close of Frasers Centrepoint’s successful $2.6 billion takeover, two small office funds and a two retirement funds are in the offering.

Singaporean giant Frasers reported yesterday that it had received acceptances equivalent to 98.39 per cent of the shares in Australand. Frasers trumped a rival offer from Stockland to take Australand with an all-cash offer of $4.48 per share.

Stockland later sold its $450m stake into the Frasers offer, netting an $80m profit on the transaction. It has since been linked to a play for Leighton Properties, which is seen as a mainly residential development business.

Like Stockland, Frasers — majority owned by Thai beer baron Charoen Sirivadhanabhakdi — was attracted to Australand’s extensive residential development business, which includes an apartment development arm, an industrial property development business and a $2bn investment portfolio.

The acquisition of Australand dramatically increases Frasers’ exposure to Australia.

Hopes for more IPO action in the property sector have been stoked by GPT’s plans to spin off a suburban office fund, and a group including ex-Macquarie Bank property executive Stephen Girdis pulling together a portfolio of New Zealand office assets for a float.

DataRoom has now been told that RetireAustralia, owned by funds run by investment banks JPMorgan and Morgan Stanley, will revive float plans that it reportedly put on ice last month.

The group is the largest private retirement player in Australia and has more than 28 villages. More advisers are thought to have been called in and a roadshow for $500m float could kick off next month.

The Australian revealed in July that the group had recruited two veteran directors — former head of real estate at BT Financial , Gary Symons, and NAB wealth non-executive director, Sandra Birkensleigh — to its board.

Millinium Capital Managers has outlaid plans to list a $450m retirement village fund this year.

Elsewhere in the sector, Ingenia Communities Group has sold its NZ student accommodation portfolio to global real estate player Forum Partners for $NZ49.4m ($43.7m) and will plough the funds back into manufactured home estates.

Based on valuations of A$2.4bn for completed investment properties and assuming a gearing of 35% for the eventual listing of ALZ ind/commercial REIT, debt attributed to the new REIT will be A$0.84bn, ie FCL stands to reap net proceeds of A$1.56bn assuming 100% sale of ALZ ind/comm REIT on listing.

Given the strong performance of A-REIT sector on ASX this year and ALZ's established track record, the demand for quality yield by investors should not be an issue.

The above analysis has yet to take into consideration that fees that FCL stand to derive as a manager.

Vested
GG

(06-09-2014, 02:37 PM)greengiraffe Wrote: FCL's move for Australand costs A$2.6bn and FCL will be assuming full control of Australand soon.

http://infopub.sgx.com/FileOpen/Target_s...eID=306200

Based on the circular to Asutraland shareholders dated 22 Jul 14:

Pg 44 - Total investment properties are valued at A$2.5311bn before netting debts

Pg 47 - completed investment properties are valued at A$2.4037bn before netting debts at a composite weighted average capitalisation rate (WACR) of 7.71%

Pg 49 - the WACR of industrial properties at 8.2% and office at 7.6%.

Pg 56 - Australand carried a total net debt of $1.2398bn with no breakdown attributable to investment prop and development division.

A successful floatation of ALZ investment properties division will substantially lower the debt associated with ALZ takeover and creates new fee income stream for FCL from the to be listed A-REIT on ASX.

Hence, I have always said that the market concerns over an impending rights issue from FCL have been overplayed.

FCL is killing multiple birds via its master stroke on Capland's unwanted former child ALZ and a successful rolling out of the following speculated strategies will result in re-rating of FCL.

Vested
GG

Frasers moves focus to Australand split
Takeover
368 words
6 Sep 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Singapore-based Frasers Centrepoint has closed its $2.6 billion takeover offer of Australand Property Group with a 98.39 per cent holding in the company.

Frasers, backed by billionaire Thai brewer Charoen Sirivadhanabhakdi, is now thought to be considering a split up of Australand between its development arm and income-producing assets.

Australand and Frasers executives declined to comment on the future for the diversified company, whose portfolio includes $2.4 billion of office towers and logistics facilities, $1.8 billion of commercial development, a $7.5 billion housing pipeline and 522 permanent staff members.

Sources close to Frasers indicated there are merits in floating a separate real estate investment trust for Australand's office and industrial assets, while the development portfolio will be retained in the existing structure.

The scenario is logical given Frasers already manages and has major stakes in two separate real estate investment trusts – namely Frasers Centrepoint Trust and Frasers Commercial Trust.

Australand's last financial results show Australia's growing demand for residential land and new apartments fuelled a 49 per cent rise to $131.5 million in the group's net profit for the six months to June 30.

The group's operating profit rose 30 per cent but aggregate residential sales revenue dropped 3.5 per cent .

Analysts at the time such as JPMorgan's Richard Jones said Australand was well placed to take advantage of demand for residential developments.

Frasers launched its all-cash, ­takeover bid for Australand in June after two attempts by Stockland.

However, Frasers needed a ­minimum acceptance of 50 per cent ­ from ­shareholders.

Stockland has since ditched its bid and sold its stake in Australand to ­Frasers. The moved netted Australand a profit of $80 million.

Frasers has been advised by ­Deutsche Bank and Standard ­Chartered on its takeover bid of ­Australand while Australand has been advised by Macquarie and Fort Street.

Since the takeover Charoen ­Sirivadhanabhakdi's appetite for M&A has not abated.

Reports have surfaced in overseas media that he is in early discussions with the Oversea-Chinese Banking Corp to buy its stakes in ­Singapore-listed property and construction company, United Engineers.


Fairfax Media Management Pty Limited

Document AFNR000020140905ea9600010

(18-08-2014, 10:29 AM)greengiraffe Wrote: Flaw In Australand Development Unit Valuations?

ALZ's development unit is touted to be the growth division comprising 30 - 40% of EBIT over time. The development division has a projected end value of A$7.5bn based on the annual report.

http://infopub.sgx.com/FileOpen/Target_s...eID=306200

The independent valuer of Australand uses the above simplistic method to value its development divisons - available under section 8.4 from page 103 - 108.

I searched high and low in ALZ's 2013 annual report and found on page 84 value of landbank:

i) http://phx.corporate-ir.net/External.Fil...U9MQ==&t=1

and the independent valuation report for details of landbank and found none. There are no details of development landbank. However, FCL spent 1 month performing due diligence at Australand before going ahead with the final offer.

I think Charoen and his team must have done a more detail analysis of the market value of the land bank instead of relying on the simplistic EBIT multiple approach.

Only time will tell.

Vested
GG

http://cms3.todayir.com.sg/html/client/f...717_en.pdf

UPDATE AND INCREASE IN PROGRAMME LIMIT
OF S$1,000,000,000 MULTICURRENCY MEDIUM TERM NOTE PROGRAMME
TO S$3,000,000,000 MULTICURRENCY DEBT ISSUANCE PROGRAMME
Frasers Centrepoint Limited ("FCL") wishes to announce that the S$1,000,000,000 multicurrency medium term note programme (the "Programme") established on 21 March 2012 by its wholly-owned subsidiary, FCL Treasury Pte. Ltd. ("FCLT"), and guaranteed by it, has been updated to:
(a) allow FCLT to issue, in addition to notes (the "Notes") in bearer form, (i) Notes in registered form and (ii) perpetual securities in registered and/or bearer form (the "Perpetual Securities" and, together with the Notes, the "Securities") under the Programme; and
(b) increase the maximum aggregate principal amount of Securities that may be issued under the Programme from S$1,000,000,000 to S$3,000,000,000.
In connection with the foregoing, the Programme has been renamed as the "S$3,000,000,000 Multicurrency Debt Issuance Programme". DBS Bank Ltd. ("DBS") is the arranger and dealer for the Programme.
FCLT (and FCL in its capacity as guarantor) have, inter alia, (1) entered into

(13-09-2014, 06:47 PM)greengiraffe Wrote: http://cms3.todayir.com.sg/html/client/f...717_en.pdf

UPDATE AND INCREASE IN PROGRAMME LIMIT
OF S$1,000,000,000 MULTICURRENCY MEDIUM TERM NOTE PROGRAMME
TO S$3,000,000,000 MULTICURRENCY DEBT ISSUANCE PROGRAMME
Frasers Centrepoint Limited ("FCL") wishes to announce that the S$1,000,000,000 multicurrency medium term note programme (the "Programme") established on 21 March 2012 by its wholly-owned subsidiary, FCL Treasury Pte. Ltd. ("FCLT"), and guaranteed by it, has been updated to:
(a) allow FCLT to issue, in addition to notes (the "Notes") in bearer form, (i) Notes in registered form and (ii) perpetual securities in registered and/or bearer form (the "Perpetual Securities" and, together with the Notes, the "Securities") under the Programme; and
(b) increase the maximum aggregate principal amount of Securities that may be issued under the Programme from S$1,000,000,000 to S$3,000,000,000.
In connection with the foregoing, the Programme has been renamed as the "S$3,000,000,000 Multicurrency Debt Issuance Programme". DBS Bank Ltd. ("DBS") is the arranger and dealer for the Programme.
FCLT (and FCL in its capacity as guarantor) have, inter alia, (1) entered into

hopefully this removes the uncertainty of a rights issue or share placement for the acquisition of ALZ

(14-09-2014, 12:10 PM)toiletsiao Wrote:

(13-09-2014, 06:47 PM)greengiraffe Wrote: http://cms3.todayir.com.sg/html/client/f...717_en.pdf

UPDATE AND INCREASE IN PROGRAMME LIMIT
OF S$1,000,000,000 MULTICURRENCY MEDIUM TERM NOTE PROGRAMME
TO S$3,000,000,000 MULTICURRENCY DEBT ISSUANCE PROGRAMME
Frasers Centrepoint Limited ("FCL") wishes to announce that the S$1,000,000,000 multicurrency medium term note programme (the "Programme") established on 21 March 2012 by its wholly-owned subsidiary, FCL Treasury Pte. Ltd. ("FCLT"), and guaranteed by it, has been updated to:
(a) allow FCLT to issue, in addition to notes (the "Notes") in bearer form, (i) Notes in registered form and (ii) perpetual securities in registered and/or bearer form (the "Perpetual Securities" and, together with the Notes, the "Securities") under the Programme; and
(b) increase the maximum aggregate principal amount of Securities that may be issued under the Programme from S$1,000,000,000 to S$3,000,000,000.
In connection with the foregoing, the Programme has been renamed as the "S$3,000,000,000 Multicurrency Debt Issuance Programme". DBS Bank Ltd. ("DBS") is the arranger and dealer for the Programme.
FCLT (and FCL in its capacity as guarantor) have, inter alia, (1) entered into

hopefully this removes the uncertainty of a rights issue or share placement for the acquisition of ALZ

http://www.valuebuddies.com/thread-4380-...l#pid93878

plus the imminent bid for UE - Towkay won't shoot himself in his own foot...

Barangaroo shortlist unveiled

LISA ALLEN
118 words
20 Aug 2014
The Australian
AUSTLN
English
© 2014 News Limited. All rights reserved.
THE Barangaroo Delivery Authority has short-listed five companies to develop the last remaining 2ha of Sydney’s Central Barangaroo site.

Mirvac Group, Grocon, Frasers Property Australia, Cbus Property and Lend Lease have been short-listed from 16 parties to acquire the Central Barangaroo parcels, according to a statement from the BDA yesterday. Central Barangaroo will be a mixed-use area between the financial quarter of Barangaroo South and Headland Park.The short-listed developers are now submitting formal bids on each of the individual parcels based on 99-year leases. A decision is expected by mid-2015. Construction is expected to be under way by mid-2016 with completion by 2021.


News Ltd.

Document AUSTLN0020140819ea8k00007

Does the below announcement by FCOT has any implication on FCL?

http://infopub.sgx.com/FileOpen/FCOT2014...eID=314867

> Does the below announcement by FCOT has any implication on FCL?
> http://infopub.sgx.com/FileOpen/FCOT2014...eID=314867

It is positive news for FCOT as the company has renewed loan agreement.

Not much effect on FCL.

http://www.valuebuddies.com/thread-4912-...l#pid94469

In either case — foreign investors dodging the rules or business migrants and their families buying a home to live in — the flow of Chinese money into Australian real estate, in fact into real estate all over the world, has only just begun.

The wave of money out of China, spurred in part by President Xi Jinping’s huge crackdown on corruption, could last for decades and raise property prices a lot higher than they are now.

And this has nothing to do with interest rates or the Reserve Bank.

Frasers Centrepoint Limited issuing $500m perpetual securities (non callable for 5years) at indicative low 5% to tap long term funds. Better than Hotel Prop when first issued around 6% few years ago. Should reduce risks of outright rights issues which I highly doubted in the first place

Initial Yield guidance at cost Low 5% area
Expected Issue Size SGD 500mio
Books Open (Deal is significantly anchored)
Denomination SGD 250k x 250k
Timing Today’s Business
Risk Rating 4C
Indicative LV 60% (Subject to Credit confirmation)
Comments - Listed on SGX with a market capitalisation of SGD4.9billion as of Sept 14

- Among the top residential property developers in Singapore, with over 12,000 homes built to date and 12 projects currently under development. The group registered strong pre-sales with unrecognised revenue of S$2.7 billion (as at 30 Jun 2014) in Singapore and overseas provide earnings visibility.

- The group is one of the largest retail mall owners and/or operators in Singapore, with NLA of around 3 million sq ft across 13 retail malls in Singapore, and one each in China and Australia and over 5.5 million sq ft across 12 office and business space properties.

- The group's hospitality arm also has scalable operation with over 8,600 serviced apartments in more than 30 cities, well-recognised hospitality brands with quality assets in prime locations.

- 9M FY13/14 revenue surged 58% y-o-y to S$1,708 million. 9M FY13/14 attributable profit (before fair value change and exceptional items) increased 62% y-o-y to S$346 million. As at 30 Jun 2014, group's asset stood at S$11,834 million.

Bond Structure: Non-callable 5 years, coupon reset in Year 5 (5yr SOR + initial Spread), 100bps step up in Year 10

At 5% yield, we feel its fair value at best comparing to the existing FCL 19s and similar perps.


Issuer: FCL Treasury Pte. Ltd.
Guarantor: Frasers Centrepoint Limited
Issue: SGD Subordinated Perpetual Securities
Ratings: Unrated
Format: Regulation S only and S274/275 of SFA, SG; Issuance off S$3 Billion Multicurrency Debt Issuance Programme
Issue Size: Benchmark
Tenor: Perpetual NC5
Ranking: Subordinated; Senior only to Issuer's ordinary shares
Call Option: [ ] 2019 & at every distribution date thereafter at par
Distribution: Fixed. Reset in Year 5 based on prevailing SGD 5Y SOR plus the Initial Spread & every 5 years thereafter
Step up: 100bps in Year 10
Distribution Payment: Semi-annually in arrear, actual/365 (fixed)
Distribution Deferral: At issuer's discretion. Any deferred Distributions are cumulative and on a compounding basis
Dividend Pusher: Yes, with 6 month look back period
Dividend stopper: Yes
Change of Control: Securities may be redeemed in whole, but not in part, at par upon Change of Control, otherwise Distribution steps up by 100bps
Other Redemption: At par under taxation reasons, accounting reasons, tax deductibility reasons, minimal outstanding amount reasons
Listing: SGX-ST
Details: SGD250K/Multicurrency Debt Issuance Programme/Singapore Law/CDP
Joint Global
Coordinators: DBS Bank Ltd. and Maybank Kim Eng
Joint Bookrunners: DBS Bank Ltd., Maybank Kim Eng, Standard Chartered Bank and UOB
B&D: DBS Bank Ltd.
Timing: This week's business, as early as today

Comparables:

Ccy Issuer Cpn Mty Nxt Call Offer YTM Offer YTNC
SGD FCL TREASURY PTE LTD 3.7 04/05/19 3.28
SGD HOTEL PROPERTIES LTD 6.125 05/04/17 7.05 4.68
SGD GLL IHT PTE LTD 4.7 05/27/16 6.08 4.68


Overview:
FCL is an established international real estate company, domiciled in Singapore. It has core businesses property development, investment and management of commercial property, hospitality and property trusts, spanning Singapore, Malaysia, Australia, China, New Zealand, Thailand, Vietnam, the United Kingdom and the Middle East.

As of 31 Aug 2014, FCL is 88% owned by TCC Group controlled by Mr. Charoen Sirivadhanabhakdi, which are demonstrative of their support to FCL by granting the latter a ROFR over any opportunity to develop, manage or invest in TCC Group’s real estate assets outside of Thailand. There is minimal conflict of interest between FCL and the TCC Group, with the latter having businesses in other industries. FCL was listed on SGX-ST in 9 Jan 2014, and as of 15 Sep 2014, it has a market capitalization of S$4.9bn (US$3.9bn equivalent).

Source DBS Credit Teaser

(14-09-2014, 12:10 PM)toiletsiao Wrote:

(13-09-2014, 06:47 PM)greengiraffe Wrote: http://cms3.todayir.com.sg/html/client/f...717_en.pdf

UPDATE AND INCREASE IN PROGRAMME LIMIT
OF S$1,000,000,000 MULTICURRENCY MEDIUM TERM NOTE PROGRAMME
TO S$3,000,000,000 MULTICURRENCY DEBT ISSUANCE PROGRAMME
Frasers Centrepoint Limited ("FCL") wishes to announce that the S$1,000,000,000 multicurrency medium term note programme (the "Programme") established on 21 March 2012 by its wholly-owned subsidiary, FCL Treasury Pte. Ltd. ("FCLT"), and guaranteed by it, has been updated to:
(a) allow FCLT to issue, in addition to notes (the "Notes") in bearer form, (i) Notes in registered form and (ii) perpetual securities in registered and/or bearer form (the "Perpetual Securities" and, together with the Notes, the "Securities") under the Programme; and
(b) increase the maximum aggregate principal amount of Securities that may be issued under the Programme from S$1,000,000,000 to S$3,000,000,000.
In connection with the foregoing, the Programme has been renamed as the "S$3,000,000,000 Multicurrency Debt Issuance Programme". DBS Bank Ltd. ("DBS") is the arranger and dealer for the Programme.
FCLT (and FCL in its capacity as guarantor) have, inter alia, (1) entered into

hopefully this removes the uncertainty of a rights issue or share placement for the acquisition of ALZ