Low Keng Huat (Singapore)

[Temperament]

Haha, I ask the same silly qn before... Check out the sheer size of Minton and payar Lebar sq and Ye expected inflow of rev and profits ... Parklane residences is selling very well, it's clear sky till 2015.

Check out gg earlier threads...

Not all developments are equal... Nvm thought it can be so significant as compared to debt level, cash level and etc..

Hmm..
It seems LKH is better than SL. i wish i can be sure.

---

Haha, I ask the same silly qn before... Check out the sheer size of Minton and payar Lebar sq and Ye expected inflow of rev and profits ... Parklane residences is selling very well, it's clear sky till 2015.

Check out gg earlier threads...

Not all developments are equal... Nvm thought it can be so significant as compared to debt level, cash level and etc..

Hmm..
It seems LKH is better than SL. i wish i can be sure.
And correction:- i think no question is silly if ask for an answer politely.
Cheers!

[TheMillennium]

What is the outstanding order book of LKH? Are they seeking any new projects?

[revelationofpyramids]

Main points from AGM: Co to sell PL Square retail shops en bloc probably to a REIT, though it says not necessarily to Guthrie but prob open to all buyers. Rental is averaging $16 psf for shops.

Co land in iskandar not in the hot area of Nusajaya. it is not eager to develop some of the land yet. However, its land is mostly in the more developed, more populated areas in the east and northeast of Iskandar. All its land is within Iskandar.

Co to continue giving out good cash dividends to shareholders, unlike some companies which issue bonus perhaps because they don't have cash to reward shareholders.

[greengiraffe]

            Gd day Buddy,

You summed it all up. My thoughts are as follows:

- Assuming $3000psf, the entire sales proceeds from 430,000 sf office (averaged $1800 - 1900psf) and 95,000 sf of retail (at least $3000psf) will come in between $1.05bn - $1.1bn.

PL Sq was last reported to cost $900m in total. As PL Sq is not wholly owned by LKH (Guthrie 10% and Invesco 10%), I think LKH construction arm could have factored in construction margins for the project. Let us assuming a conservative pretax margin of 8% of $900m = S$72m pretax or net S$59m.

Assuming pretax profits of $150m for development profits or net $123m (100%), LKH's share total $98.4m.

LKH's total net from PL Sq will be estimated around $157.4m or $0.213. Somehow, I tend to think that the development profits seem to be on the low side but taking into the gearing impact (at least) of 67% (land costs entirely financed based on balance sheet), then ROE is a high 50% ($150m pretax against slightly over $300m in construction costs 100% excluding land costs).

This is a bunch of highly experienced old blokes that focuses strictly on cashflows for their business. Given the strong cashflows to be expected from all to be completed projects on hand, DPS can be expected to progressively being raised by 0.5 cents annually over the next few years.

Solid dividend yield with still generous discount to book value of easily $1 - $1.20, it qualifies as a Godfather stock and its certainly the Few Good Men around.

GG
Vested

Main points from AGM: Co to sell PL Square retail shops en bloc probably to a REIT, though it says not necessarily to Guthrie but prob open to all buyers. Rental is averaging $16 psf for shops.

Co land in iskandar not in the hot area of Nusajaya. it is not eager to develop some of the land yet. However, its land is mostly in the more developed, more populated areas in the east and northeast of Iskandar. All its land is within Iskandar.

Co to continue giving out good cash dividends to shareholders, unlike some companies which issue bonus perhaps because they don't have cash to reward shareholders.

[yeokiwi]

PL Sq was last reported to cost $900m in total. As PL Sq is not wholly owned by LKH (Guthrie 10% and Invesco 10%)

Since the land costs around $500million... the construction cost + misc cost is around $400million or $761psf??
That is quite expensive.

[greengiraffe]

http://info.sgx.com/webcoranncatth.nsf/V...F00327EF0/$file/LowKengHuat_Ann_PayaLebarProject.pdf?openelement

$586m hence construction costs $314m. Not high considering that its commercial.

Need to correct my earlier estimates - 8% pretax margins on construction costs say around $300m - $24m pretax or $19.68m net. So total LKH profits from PL Sq $118.08m or $0.16/share.

Sorry for early morning blurness.

Cheers
GG

PL Sq was last reported to cost $900m in total. As PL Sq is not wholly owned by LKH (Guthrie 10% and Invesco 10%)

Since the land costs around $500million... the construction cost + misc cost is around $400million or $761psf??
That is quite expensive.

[Wildreamz]

Question: Why the sharp drop? I thought ex-dividend is on Monday?

Edit: Silly me, the XD is today. Record date is Monday.

[BeDisciplined]

Hi GG, may I know where did you get the construction cost of $314m? Also how did you arrive at a book value of $1 - $1.2? Current NAV is only ~65 cts. Pls share more detailed breakdown.

[greengiraffe]

http://info.sgx.com/webcoranncatth.nsf/V...600288177/$file/20130611_LKHS_Misc_Proposed-transfer-retails-units-PLS_Att.pdf?openelement

LKH announced this morning that it is diluting its 25% interests to JV partner Sun Ventures (could be linked to Guthrie / Invesco).

Effectively, the following messages can be deduced from the announcement:

i) Book value of 100% of PL Sq Retail S$190m on completion, or $2000psf, leaving an estimated costs of $710m for the office component (430000sf or 1650psf costs) - 95% sold based on average of at least $1800 psf - pretax gains of at least $64m (100%) or $51.2m LKH share. Note the above gains exclude LKH's construction profits from managing the project;
ii) Current market value on proposed transactions S$300m or S$3158psf implying an buffer of S$110m above LKH's consortium development costs;
iii) LKH booked an effective $27.5m gain (pretax) on dilution of interests.

Whilist there is little immediate impact from the dilution exercise, it reiterated LKH's conservative approach (focus on net cash) towards mammoth development projects while retaining a managable exposure for future recurrent income.

Vested
GG

[greengiraffe]

http://info.sgx.com/webcoranncatth.nsf/V...F00327EF0/$file/LowKengHuat_Ann_PayaLebarProject.pdf?openelement

http://sg.news.yahoo.com/paya-lebar-squa...27599.html

A consortium comprising Low Keng Huat, Guthrie and Sun Venture Group has announced plans to start selling strata office units in its S$900 million office and retail development, Paya Lebar Square, in December.
Located next to Paya Lebar MRT station, the 13-storey development is set for completion by mid-2014.
The office component will have 550 strata units, 50 percent of which will have a built-up area of 480 sq ft. Indicative prices for the units range from S$1,650 psf to S$2,000 psf.
Overall, there will be around 430,000 sq ft of offices for strata sale.
With about 95,000 sq ft of net lettable area (NLA), the retail podium will occupy Basement 1 to Level 2.
The podium is designed to accommodate a food court, supermarket, food and beverage (F&B) outlets and a banking hall.
Parking lots are located on levels 2 and 3, while the offices will occupy levels 4 to 13.
Paya Lebar Square will be integrated with the Paya Lebar MRT Interchange station. Basement 1 will be linked to the Circle Line station, while Level 1 will be connected by a sheltered walkway to the East-West Line station.
Meanwhile, Low Keng Huat, Guthrie and Sun Venture Group hold 80 percent, 10 percent and 10 percent respectively in Paya Lebar Development Pte Ltd.
To contact the journalist, you may send your message to editor@propertyguru.com.sg