UOL - United Overseas Land

[greengiraffe]

The Few Good Men - may have taken a long time but Wee has been such a great Godfather that many can entrust their hard earned money with... still water runs deep and vintage takes time to be brewed.

Vested
Odd Lots (Pan Pac / UOL)

The Straits Times
www.straitstimes.com
Published on May 11, 2013
UOL to take Pan Pacific Hotels private
Developer's exit offer of $2.55 a share values its subsidiary at $1.53 billion

By Melissa Tan

DEVELOPER UOL will spend up to $281.9 million to take its hotel arm private, it said yesterday.

UOL, controlled by billionaire Wee Cho Yaw, already owns 81.6 per cent of mainboard-listed Pan Pacific Hotels Group. It is offering $2.55 apiece for the rest of the shares it does not own in Pan Pacific, which values the subsidiary at around $1.53 billion.

Pan Pacific's second-largest shareholder, United Overseas Bank, has a stake of 7.99 per cent valued at around $122.2 million.

UOL's exit offer is 9 per cent higher than Pan Pacific's closing share price of $2.34 on Thursday, which put the hotel operator's market capitalisation at around $1.4 billion as of yesterday. Both companies halted trading of their shares before markets opened yesterday morning.

UOL chief financial officer Wellington Foo said on a conference call yesterday evening that taking Pan Pacific private would give UOL greater flexibility in managing its hotels.

Most of UOL's hotel assets are owned and managed by Pan Pacific but some are owned by UOL, such as Pan Pacific Orchard.

Noting that UOL could then "put them together" rather than keep these hotels separate, Mr Foo did not rule out establishing a holding company for all of UOL's hotel assets but said that was "not imminent".

UOL said in a statement yesterday the voluntary delisting of Pan Pacific would give an exit option to minority shareholders who find it difficult to realise their investment, due to the stock's low trading liquidity and low free float.

Pan Pacific has a free float of up to 10.44 per cent. Its shares have risen almost 30 per cent over the past 52 weeks, reaching a high of $2.54 on Feb 27 this year.

The privatisation is subject to approval from 75 per cent of shareholders but it is a done deal, given that UOL's stake exceeds that threshold.

Analysts yesterday said UOL's next privatisation target could be other UOL-linked companies such as developer United Industrial Corporation (UIC) and landlord Singapore Land (SingLand).

"The speculation is that if this (Pan Pacific) is privatised, then most people will start looking at UIC and SingLand to be the next target," said CIMB-GK analyst Donald Chua in a Bloomberg report yesterday.

But Mr Foo yesterday said UOL did not foresee taking UIC private in the near future, and that UOL did not control SingLand directly. UOL owns around 43 per cent of UIC, which in turn owns around 80 per cent of SingLand.

Both UOL and Pan Pacific posted first-quarter results yesterday.

UOL's net profit fell 15 per cent to $71.7 million, owing to higher currency exchange losses and lower profit from hotel operations, which were affected by the opening costs of the $350 million Parkroyal on Pickering hotel in January.

The group's revenue for the three months ended March 31 dropped 17 per cent to $247.8 million, due to lower contribution from property development.

Pan Pacific's net profit tumbled 45 per cent to $9.5 million for the quarter despite a 1 per cent rise in revenue to $97.8 million.

UOL shares closed at $7.26 on Thursday. Trading in UOL and Pan Pacific shares will resume on Monday.

melissat@sph.com.sg

[greengiraffe]

The reason behind why UOL consistently buying UIC and UIC in turn buying Singland...

CBD office rents 'bottoming out'

Published on Jul 04, 2013


Rents in the Raffles Place area and other CBD zones have held firm in the second quarter from the preceding three months. -- ST FILE PHOTO

By Melissa Tan

OFFICE rents in the Central Business District (CBD) look to be bottoming out after a period of decline, while those in the CBD fringe are rising, according to a DTZ report yesterday.

Occupancy rates have also climbed islandwide, largely due to a decrease in supply, the property consultancy added.

It found that average gross monthly office rents in Shenton Way held firm at $7.25 per sq ft (psf) in the second quarter from the preceding three months, while those in the Raffles Place area hovered at $9.30 psf. They were still down year on year, however: by 4 per cent in the Shenton Way zone and 2 per cent at Raffles Place.

Ms Lee Lay Keng, DTZ's head of Singapore research, said CBD rents could start rising in this half of the year if economic growth improves. But she added that demand from banks and financial services firms, which tend to pay higher rents, will likely remain "modest".

"Office demand will continue to be supported by the non-financial sectors such as the information technology, energy and infocomm and professional sectors, which have recorded more positive sentiment."

While the CBD is languishing, rents in some city fringe areas rose in the quarter to June 30 from the preceding quarter.

DTZ pointed to "sustained demand from a diversified tenant profile, additional demand from displaced tenants and the recent lack of new supply".

Average gross monthly rents in Orchard Road rose 2.3 per cent from the preceding quarter, while those in the Bras Basah/Selegie Road area grew 2.4 per cent. The jump was slightly larger in River Valley, where office rents rose 3.3 per cent from the previous quarter.

Average gross rents in other CBD fringe districts such as Marina Centre, Tanjong Pagar and Beach Road were largely unchanged from the first quarter.

DTZ noted that a number of tenants were displaced from the CBD because some office buildings went off the market for refurbishment or redevelopment.

These were located mostly around Shenton Way and included the entire Robinson Towers and its annex building, the International Factors Building, The Corporate Office, Cecil House and some floors in DBS Tower 1.

"Some of the displaced tenants from these older buildings due for redevelopment moved either into nearby buildings in the CBD or the CBD fringe, where rents can be about 10 per cent to 20 per cent lower."

DTZ estimated the buildings had a cumulative net lettable area of around 430,000 sq ft.

Taking such a large amount of office space off the market sent occupancy rates shooting up for the second quarter.

Islandwide occupancy rates went up from 95.4 per cent in the first quarter to 96.3 per cent in the second.

The biggest growth was in the Shenton Way area - up 3.3 percentage points to 94.8 per cent, while Raffles Place occupancy rates grew about 1 percentage point to 94.3 per cent.

melissat@sph.com.sg

[pianist]

Singapore, 7 August 2013 – UOL Group today announced a 151% rise in net attributable profit to $431.4 million for the second quarter ended 30 June 2013 (2Q13) from $171.7 million in the corresponding period last year. The increase was due mainly to higher fair value gains on investment properties.
Fair value gains on investment properties including those of associated companies surged 386% to $400.3 million. Pre-tax profit, excluding these and other gains, rose 16% to $115.3 million, helped by higher gross margin of 49% against 43% previously.

[kagemusha]

UOL seems to be deeply undervaluated. Very pricey though... have to slowly build up...

[pianist]

UOL seems to be deeply undervaluated. Very pricey though... have to slowly build up...

how do u ascertain it is deeply undervalued?

[kagemusha]

I am still learning so correct me if I interpret wrongly but this is what I understand from their financials.

1. Their NAV is $8.47 vs current price at $6.38 (about 25% discount from their NAV)
2. They generate FCF from their operating activities
3. Dividends have been pretty consistent every year

On the company's operating activities, they are also buying land for future development.
Comparing their 2nd quarter results from last year, they are about $400million up from last year.

[felixleong]

How does it compare to other property counters like capitaland and city development? It seems that some of them are also trading at significant discount to book

[pianist]

went to park royal at pickering street & pan pacific at marina on separate days last weekend. realli like what i saw. the style the design and the relaxing atmosphere. the hotel owner took some time add good taste.

strongly encourage fellow buddies to see , partonize the hotels or bring yr loved ones or overseas relatives for a one or two nites stay or makan at the dinning restuants available there

[kagemusha]

May I also add that their 2nd quarter results are better than previous years (2012, 2011) results.
Looks good so far to me.

[kagemusha]

drooling.....