Keppel Land

[edragon]

Keppel Reit too.

[MINX]

Keppel Reit too.

My guess is they're selling MBFC phase 3 to Kep Reit to boost their earnings for the year, in view of the bleak residential market? Rights issue coming up for KREIT?

[cfa]

UBS Asean - KPLD/KREIT: Finally buying MBFC3‏
Thursday, September 18, 2014
KPLD/KREIT: Finally buying MBFC3
KREIT SP - $1.23 NEUTRAL TP $1.21; KPLD SP - $3.4 BUY TP $4.06
KREIT is finally buying KPLD’s one-third stake in MBFC3. It will place out new shares at S$1.17 (5% disc) to raise a total of S$413m. Pricing is unlikely to be cheap but will remove the overhang. This may also lead to a special dividend from KPLD.
· Fund raising. KREIT will place out 195m new shares at $1.17 (5% disc) to raise S$228m. It will separately issue S$185m of new units to KPLD to help fund the acquisition - total is S$413m.
· Valuation.DBS bought 30% of MBFC3 in Dec 2012 for S$1.035bn (S$2,555 psf). The recent val’n for MBFC1 has hit S$2,600-2,700 while recently, Straits Buiding was sold for S$2,800 psf. As such, we reckon KREIT may have to pay S$2,850 psf for MBFC3.
· Funding. At S$2,850 psf for MBFC3, the total outlay is S$1.3bn. We believe this will be funded by S$512m proceeds from PruTower, S$413m fund raising and the rest from loans.
· Overhang removed. KREIT (+3% YTD) has lagged both CCT (+13% YTD) and SUN (+16%). It is trading at a FY15 yield of 5.8% (vs CCT 5.3% and SUN 5.9%). Of the three, Michael still prefer CCT (growth from CapitaGreen) and SUN (AEI at Phase3 of Suntec Mall) over KREIT (loss of income support from OFC).
· Special div from KPLD? KPLD may receive S$1.3bn. If we assume net proceed of S$800m after paying off debt, this is 5¢ per share. It will raise KPLD’s yield from 3% to 4.5%.

[tealeaves]

Minx right on the $$$! *salute sia*

[Shrivathsa]

Keppel Reit was halted pending announcement.

Keppel REIT buying one third interest from Keppel Land for S$1,248.0 million.

Launching private placement of Keppel REIT shares.

[Shrivathsa]

Next, I guess will be divestment of Bugis Junction towers, in a year or two

[Layman A]

Is this a WIN - WIN situation for both K-REIT and Keppel Land ?

Or is it just another SHOVE-IT-DOWN-YOUR-THROAT type of transaction ?

[Layman A]

Sorry, but I think you got the decimal point wrong.
Based on my Layman calculation :
$800,000,000 = 80,000,000,000¢
divided by 1,545,592,000 shares,
should be 51.7¢ per share.

Huat ah !

UBS Asean - KPLD/KREIT: Finally buying MBFC3‏
Thursday, September 18, 2014
KPLD/KREIT: Finally buying MBFC3
KREIT SP - $1.23 NEUTRAL TP $1.21; KPLD SP - $3.4 BUY TP $4.06
KREIT is finally buying KPLD’s one-third stake in MBFC3. It will place out new shares at S$1.17 (5% disc) to raise a total of S$413m. Pricing is unlikely to be cheap but will remove the overhang. This may also lead to a special dividend from KPLD.
· Fund raising. KREIT will place out 195m new shares at $1.17 (5% disc) to raise S$228m. It will separately issue S$185m of new units to KPLD to help fund the acquisition - total is S$413m.
· Valuation.DBS bought 30% of MBFC3 in Dec 2012 for S$1.035bn (S$2,555 psf). The recent val’n for MBFC1 has hit S$2,600-2,700 while recently, Straits Buiding was sold for S$2,800 psf. As such, we reckon KREIT may have to pay S$2,850 psf for MBFC3.
· Funding. At S$2,850 psf for MBFC3, the total outlay is S$1.3bn. We believe this will be funded by S$512m proceeds from PruTower, S$413m fund raising and the rest from loans.
· Overhang removed. KREIT (+3% YTD) has lagged both CCT (+13% YTD) and SUN (+16%). It is trading at a FY15 yield of 5.8% (vs CCT 5.3% and SUN 5.9%). Of the three, Michael still prefer CCT (growth from CapitaGreen) and SUN (AEI at Phase3 of Suntec Mall) over KREIT (loss of income support from OFC).
· Special div from KPLD? KPLD may receive S$1.3bn. If we assume net proceed of S$800m after paying off debt, this is 5¢ per share. It will raise KPLD’s yield from 3% to 4.5%.

[cfa]

Kreit is really a dumping ground of Keppel Land.

[greengiraffe]

However, clearly investors know about that and hence price performance has been extremely inferior relative to CCT despite constant expansion in portfolio...

Odd Lots vested
GG

Kreit is really a dumping ground of Keppel Land.