Heeton Holdings

[cliffordng888]

Haha.......not sure what to say.......

Even the top floor cineme is vacant for so long and yet so one take over. There are some empty food stalls in the food court not rented out and left empty.

NTUC is the only place in Sun Plaza worth going. But it is so small. Look at NTUC or cold storage in other malls....well, better don't compare.... lol

Well, I think you never been to Sun Plaza...

Do drop by to take a look..........................

Their 50% owned Sun Plaza is tying up the company. The other 50% is owned by Koh Brothers if I am not wrong. A year or two ago, they tried to put the plaza out for sale but then withdrew. One catalyst for upgrading woulld be the disposal of this plaza but I guess would not be easy.

no vested interest

You are right. Sun Plaza location is good but I believe further enhancement is needed if Heeton and Koh Brother wants to sell it or for better recurring rental.

I do not think anyone would want to buy it under current state. They had to enhance to have more space and manage the mall properly yo have better tenant mix.......

They dont have to sell it off in a hurry. The existing condition of the building itself is already attractive. Its built with a very large floor plate design to cater for more flexible use.

Companies like SPH are always hungry to purchase Suburban malls and they dont mind paying in excess of 2500psf for it. The benchmark to use is the 5% yield. Nobody pays more than 5% yield for a suburban mall. So that translate into a valuation of 300million for Sun Plaza.

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Their 50% owned Sun Plaza is tying up the company. The other 50% is owned by Koh Brothers if I am not wrong. A year or two ago, they tried to put the plaza out for sale but then withdrew. One catalyst for upgrading woulld be the disposal of this plaza but I guess would not be easy.

no vested interest

Too many offers for Sun Plaza that scared them into selling. Plus the fact that SPH paid more than 600million for Clementi mall and Far East bidding 1billion for the Punggol project that lead them to question themselves if selling Sun Plaza at that time was a correct move.

Turns out that they are right.

Ive been there and Ive seen the floor plans of the building. And I know what Im talking about when I say that place has good potential.

maybe you should go and find out how much rental NTUC is paying to rent that place.

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By the way, is Hotelking your friend? He gives u a +4 in your reputation.......

[propertyinvestor]

Haha.......not sure what to say.......

Even the top floor cineme is vacant for so long and yet so one take over. There are some empty food stalls in the food court not rented out and left empty.

NTUC is the only place in Sun Plaza worth going. But it is so small. Look at NTUC or cold storage in other malls....well, better don't compare.... lol

Well, I think you never been to Sun Plaza...

Do drop by to take a look..........................

You are right. Sun Plaza location is good but I believe further enhancement is needed if Heeton and Koh Brother wants to sell it or for better recurring rental.

I do not think anyone would want to buy it under current state. They had to enhance to have more space and manage the mall properly yo have better tenant mix.......

They dont have to sell it off in a hurry. The existing condition of the building itself is already attractive. Its built with a very large floor plate design to cater for more flexible use.

Companies like SPH are always hungry to purchase Suburban malls and they dont mind paying in excess of 2500psf for it. The benchmark to use is the 5% yield. Nobody pays more than 5% yield for a suburban mall. So that translate into a valuation of 300million for Sun Plaza.

---

Their 50% owned Sun Plaza is tying up the company. The other 50% is owned by Koh Brothers if I am not wrong. A year or two ago, they tried to put the plaza out for sale but then withdrew. One catalyst for upgrading woulld be the disposal of this plaza but I guess would not be easy.

no vested interest

Too many offers for Sun Plaza that scared them into selling. Plus the fact that SPH paid more than 600million for Clementi mall and Far East bidding 1billion for the Punggol project that lead them to question themselves if selling Sun Plaza at that time was a correct move.

Turns out that they are right.

Ive been there and Ive seen the floor plans of the building. And I know what Im talking about when I say that place has good potential.

maybe you should go and find out how much rental NTUC is paying to rent that place.

---

By the way, is Hotelking your friend? He gives u a +4 in your reputation.......

The top floor of the building has been decanted. The space will be transferred down for the basement extension works. This would help improve the rental yield of the property in the future.

[propertyinvestor]

Ah yes, hotelking is one of my friends whom I introduce to this forum

[propertyinvestor]

Very satisfied with my accumulation over the past week

Heeton will be launching a new development in the Tanjong Pagar area soon. Keep a lookout for it!

[nitro]

http://www.sunplaza.sg/malldirectory.php?list=lvl&id=2

A quick look at the tenants, looks like a typical suburban mall tenants.

[propertyinvestor]

http://www.sunplaza.sg/malldirectory.php?list=lvl&id=2

A quick look at the tenants, looks like a typical suburban mall tenants.

Yes the typical suburban rents starts from $7 psf

[ngcheeki]

Very satisfied with my accumulation over the past week

Heeton will be launching a new development in the Tanjong Pagar area soon. Keep a lookout for it!

Do you mean Heeton is going to relaunch the remaining 39 units of El Centro for sale? Base on my search, only 1 unit out of the 40 units are sold during 2009 at an average price of S$ 1,242 psf. What's your estimated development cost? 750 to 800 psf?

[propertyinvestor]

Very satisfied with my accumulation over the past week

Heeton will be launching a new development in the Tanjong Pagar area soon. Keep a lookout for it!

Do you mean Heeton is going to relaunch the remaining 39 units of El Centro for sale? Base on my search, only 1 unit out of the 40 units are sold during 2009 at an average price of S$ 1,242 psf. What's your estimated development cost? 750 to 800 psf?

They are going to redevelop el centro and build a brand new development with a launch price at $3300 psf. The commercial strata units on the ground floor are likely to be sold for 9000psf. They bought back the last unit from a sucker who was desperate to sell because he needed cash.

Now that they own 100% of the strata units in the development they can do what they like with it.

Now Heeton bought the units in elcentro 13 years ago. I let you figure out how much money they are going to make from this.

And if you make money, remember where you heard this news first

[propertyinvestor]

Very good performance today!

[mysterion]

Thanks for highlighting this property company. Took a quick look at its recent financials and annual report and noticed that it is undervalued in terms of book value. However, I noted that their financial health seems terribly poor. Not really sure how the cash flow in property development companies work but their current liabilities >>> adjusted current assets.

As of Q2 2012, Current Assets excluding Developmental Properties (i.e. Cash and cash equivalents + accounts receivable) stands at 15 million, while current liabilities stands at 87 million. Cash flow liquidity risk seems rather high in this case.

Perhaps this is the reason the market is discounting its property assets since a cash flow crisis will possibly result in the company selling its developmental properties at fire-sale prices. So the big question is how large margin of safety is required and how do we discount the value of the properties in our RNAV calculation? And also are there any catalysts (such as a corporate takeover) or any intention from the management to realise the value of their properties soon? If not, the wait for value to be realised may not be fruitful. \

IMO, these are the factors we have consider when investing in apparently undervalued asset plays.

I haven't taken a look at their free cash flow record, but based on Bloomberg it seems that their FCF has been positive so that's a good sign. Will need to dig deeper and look how efficient the company is run.