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Stamford Land
18-02-2011, 11:06 AM,
Post: #21
RE: Stamford Land
(18-02-2011, 12:35 AM)Nick Wrote:
(18-02-2011, 12:13 AM)tonylim Wrote: Ow bought 700,000 shares on 15-16/02 at 0.606/0.61.

Don't think he ever bought so high before ? Must be really bullish about the property development projects to be completed this year.

(Not Vested)

What's the possibility of Stamford Land seperately packing its hotels into a REIT?

Then SL can be a
1. REIT Manager,
2. Hotel operator;
3. Property Developer?

This should be able to enable them to monetise their assets ansd at the same time, keep control of the assets still under SL.

What does you guys think?

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18-02-2011, 11:24 AM,
Post: #22
RE: Stamford Land
Quite possible Tony-san. As there are no prospective buyers for the hotels coming, mayb it's good to do a REIT and re-cycle the capital. But I think the hotels hold some promise as they have been utilising the extra plot ratios the hotels are standing on to built its apartments. Essentially the land cost is minimal right?


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18-02-2011, 11:55 AM,
Post: #23
RE: Stamford Land
(18-02-2011, 11:41 AM)tonylim Wrote: I remember during one AGM, Ow was saying runing a hotel biz is a sexy but tedious job, too labour intensive. So if it is in reit, still have to run the biz ,only differnece is the structure of biz itself, so reit or no reit is no big difference to the management.
Ow may change his strategy after his son is on board now.

To a certain extent, I believe Stamford Land also relies on the hotel brand name to market its apartments as luxurious ones. There can be synergy involved there. But it'll be interesting to note their plan going forward.

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05-04-2011, 09:40 PM,
Post: #24
RE: Stamford Land
Hi Tony,

How much revenue do you anticipate SL will get when the Australian developments TOP this year ?

Thanks
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.

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06-04-2011, 10:25 AM,
Post: #25
RE: Stamford Land
Based on their 9M 11 B/S, I noticed that they have classified $169.7 million worth of development properties for sale. This figure has been rising steadily as the year progressed since the value increases as the development nears completion. Will this figure eventually represent the cost of investment and will be deducted against the revenue to yield the gross profit ? Do you expect the sales margin to be high ?

Thanks
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.

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21-06-2011, 05:24 PM,
Post: #26
RE: Stamford Land
Mr Ow purchased 167,000 shares at $0.60 per share. Over the past 12 months, Mr Ow has purchased 3.818 million shares from open market.
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.

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27-06-2011, 06:19 PM,
Post: #27
RE: Stamford Land
Quote:The total revenue should be around A$210 to 215 millions .

In this case, wouldn't the profits from The Stamford Residences, Sydney project be almost zero?

I found an article on Business Times that estimated the cost of development for the project to be around A$220mn.
Check http://sgpropertynews.wordpress.com/2007...y-project/ for a reproduction of the article.

Alternatively, using the quoted average selling price of A$1000 psf in the article, and the net built up area of the project of 18,600 sqm (taken from AR), the total revenue for the project will only be about A$200mn, which is close enough to your estimates, but still short of the estimated total cost of the development.

I would like to believe that this project is actually quite profitable; can anyone provide a more reliable source for the cost of development?

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27-06-2011, 09:19 PM, (This post was last modified: 27-06-2011, 09:20 PM by yeokiwi.)
Post: #28
RE: Stamford Land
I think the average psf is much higher than A$1000.
The example of the penthouse at 427sqm or about 4600sqft is to be sold at A$14million or A$3000 psf.

about 55% is sold slightly above A$1000 psf but the rest of the 45% may be sold at even higher price.

THere are 5 apartments, 2 penthouses, 5 reynell terraces and 5 commercial/retail suites left.
Total area for residences about 30000 sq foot.
http://www.gloucesterstreet.com.au/
If they are sold at $2000 psf, the total revenue will be around 60 million.
As for the commercial /retail suites, i think the psf should be higher.

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27-06-2011, 10:55 PM, (This post was last modified: 27-06-2011, 10:58 PM by Nick.)
Post: #29
RE: Stamford Land
AR 2008:

Quote:Over 60% or 109 apartment units worth some A$145 million were pre-sold as at June 2008. Construction of The Stamford Residences & The Reynell Terraces began in June this year and is slated for completion in August 2011.

AR 2010:

Quote:The Stamford Residences & The Reynell Terraces is 91% pre-sold based on number of apartments available and 65% based on value as at 31 May 2010. This prestigious development in Sydney comprises 122 tower apartments (including two penthouses) plus five terraces and some commercial and retail space. It is the last residential tower that is permitted within The Rocks and, hence, is a truly unique investment opportunity.

At page 29:

With completion of the 30-storey tower expected around Easter 2011, more than $190 million worth of apartments and boutique commercial spaces have been sold in what is the last approved high-rise development in The Rocks Urban Conservation Area. Among the limited stock remaining are the jewels in the 30-storey crown – two four-bedroom, three-storey penthouses, which are expected to fetch up to $16 million.

What do you think they meant by "65% based on value" ? At least we have a revenue figure for the 90% of units sold ! It might be that the A$220 million could refer to the projected revenue rather than cost ? What do you think ?
Disclaimer: Please feel free to correct any error in my post. I am not liable for anything. Do your own research and analysis. I do NOT give buy or sell calls and stock tips. Buy and sell at your risk. I am not a qualified financial adviser so I do not give any advice. The postings reflects my own personal thoughts which may or may not be accurate.

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28-06-2011, 07:29 PM, (This post was last modified: 28-06-2011, 07:32 PM by D123.)
Post: #30
RE: Stamford Land
Apart from getting in touch with Stamford's executives directly, I guess it is difficult to verify the cost of development for The Stamford Residences, Sydney project. I thought about contacting the journalist who wrote the article but I can't find his email address.

__________________________________________________


Anyway, on the valuation of the hotel properties, I agree that the real value is definitely much higher than the book value of S$475mn. However, I'm not sure if the 2008 "offer" from the mysterious public company serves as a good indicator.

In the past ten years, the highest "segment results" (I assume it's EBIT) of the hotel segment recorded was in 2008 when it hit about S$47mn. (in that year, the exchange rate of AUDSGD largely moved sideways between 1.22 and 1.33). Let's assume that with the prestige of the Stamford brand, they can command some pricing power and business can be quite sustainable. An EBIT of S$50mn would not be difficult to achieve.

But even then, the S$1bn "offer" would put the operating yield at a low 5%. If I recall correctly, interest rates in Australia are quite high, with lending rates to corporations generally above 5%. So (I'm guessing here) in order to make the deal work at that price, the potential buyer probably asked for certain other concessions, concessions that Stamford could not agree to.

Also, I read somewhere that management has said that they would not sell off the hotel portfolio cheaply, and that it would take something mind-blowing. If we assume that Stamford has capable managers, and they are able to get the best out of the asset, any offer that is mind-blowing will likely be borderline foolish as well. Perhaps that was why the potential buyer decide to forfeit their deposit and pull out of the deal.

Fast forward three years, given that the general tourism and hotel sectors in Australia does not seem to have changed much, it is unlikely that the S$1bn offer is any more realistic now as well.

__________________________________________________


Many people point to the S$1bn offer as the potential value of the portfolio. But I would like to consider the scenario where the management decides to retain the portfolio and manage it to perpetuity instead. In this case, a P/FCF or P/E valuation seems more reasonable. Let's say that the S$50mn operating income is achievable, tax rates are 30%, LTV ratio is 50%, and long-term interest rates are 6%. Let's place the value of the properties at close to book, at S$500mn. Given that, a rough FCF, assuming capex is equal to depreciation, is somewhere around S$24.5mn. With equity of S$250mn, that should be a P/FCF of about 10. That doesn't sound too bad, but it isn't any basement bargain.

In the past 10 years, the revenues of Stamford's hotel properties have increased at 5% a year, and operating income, at about 9% a year, with mostly the same eight hotel properties. So if no "market revaluation" happens, we can at least grow the value of the portfolio at between 5 - 9% a year, which seems fair enough for a reputable hotel brand.

What can then increase the value of the portfolio is if they increase LTV ratios (not difficult) or reduce interest rates (very difficult) and reinvest the extra cash in more Stamford hotels at higher leverage ratios. In the past, they chose to go into property development, but are now considering expansion into their hotel portfolio with a revamp and/or expansion of their North Ryde site. Perhaps, if they are aggressive enough, there can be a cause for revaluation.

_________________________________________________


I'm writing this because I'm reviewing valuation methods of hotel properties, and have a niggling feeling that whatever hidden intrinsic value that Stamford has, it is not in the hotel portfolio as yet. Any other thoughts on valuation of the company and its portfolios of assets are welcome.

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