CIMB did an inhouse presentation on BP recently. Nothing new that we don't know:
Boustead Projects Limited
Aiming to unlock hidden value
■ Property consultants’ valuation reports indicate significant revaluation upside for
group’s industrial leasehold portfolio, if marked to market.
■ Mid-term strategy to unlock value in leasehold portfolio through a REIT listing.
■ Currently trading at 0.61x historical RNAV vs. industrial REITs’ average of 0.98x
and 8.5x restated historical core P/E vs. industrial REITs’ 14.6x.
■ Historical RNAV/share is S$1.21, based on property consultants’ valuation reports.
Insiders bought shares at S$0.90 and S$0.76.
A leader in the industrial real estate design-and-build field
Recently spun off from Boustead Singapore, Boustead Projects (BP) is a leading player
in the industrial real estate design-and-build field, with a proven track record in the
delivery of high-spec industrial facilities to MNCs across various industries. Besides
turnkey design-and-build services, BP also offers its customers the option of leasing
from its custom-built industrial facilities.
Hidden value in mid-scale leasehold portfolio
BP owns a mid-scale leasehold portfolio comprising 16 industrial facilities, with total GFA
of 186,685 sq m and an overall occupancy rate of 96%. 13 of BP’s 100%-owned
leasehold properties were valued at S$368m by property consultants against their book
value of S$189m (historical cost net of depreciation). The valuation implies a cap rate of
6.64% on BP’s 1QFY3/16 annualised NPI, broadly in line with the 6.57-7.21% cap rates
for Singapore industrial REITs. Most of the facilities are custom-built and single-tenanted
based on long-term leases, hence income risk should be limited. The portfolio’s rents
are 20-30% below market average, allowing headroom for upward rental revisions and
flexibility in soliciting tenants when the leases are due for renewal.
Aiming for a REIT listing to unlock value
BP has a mid-term plan to launch a REIT with its leasehold portfolio. If successful,
shareholder value could be unlocked through either a special cash dividend or cash-inspecie
of REIT shares (industrial REITs are currently trading at 0.98x historical RNAV on
average). BP’s partnership with ADIC (a Middle Eastern sovereign wealth fund) could
accelerate the progress as the partners’ investment commitment of S$600m has
relieved BP’s capital concerns. Given its leasehold portfolio’s current worth of S$550m-
600m (including three leasehold facilities that are held under JVs), management
believes BP’s leasehold portfolio could reach the critical size of S$700m-1bn for the
REIT launch within the next 2-3 years.
Management and major shareholder buying reveals commitment
BP will pay no dividend for the next two years as cash will be reserved for leasehold
portfolio expansion purposes. Nevertheless, shareholders might derive comfort from
management’s and its major shareholders’ buying, which reveals their commitment.
BP’s two executive directors bought 662.8k BP shares for S$0.90 apiece (total value:
S$596.5k) from the open market. Mr Wong Fong Fui, group chairman and CEO of
Boustead Singapore (parent company of BP), known as a very discerning investor,
bought 6.77m shares (2.1% of BP’s stake) for S$0.76 apiece (total value: S$5.2m)
through a cross transaction.
Contracts awarded.. Not a lot but better than a drought..
Boustead Projects Limited (“Boustead Projects”) – a leading specialist in real estate solutions – is pleased to announce that it has been awarded two contracts in Singapore recently, with a total value of S$59 million.
The first contract involves the delivery of an integrated production and office facility (the “JEP Facility”) for JEP Precision Engineering Pte Ltd (“JEP Precision Engineering”) at the Seletar Aerospace Park (“SA Park”) in Singapore. JEP Precision Engineering is a major supplier of high quality precision-machined products for the aerospace, oil & gas and machine tool industries, with more than half of its production dedicated to aircraft engine components. To be completed in calendar year 4Q 2016, the JEP Facility will house a single-floor production area and adjoining four-floor office.
The second contract involves the delivery of an integrated production, logistics and office facility (the “Markono Facility”) for Markono Print Media Pte Ltd (“Markono Print Media”) at Pioneer Crescent in Singapore. Markono Print Media creates exceptional value for its clients through the provision of world-class printing, warehousing and fulfilment, and other supply chain solutions. To be completed in calendar year 4Q 2016, the Markono Facility will house eight floors of production, logistics and office space, incorporating an advanced automatic storage and retrieval system within its warehouse.
Mr Thomas Chu, Managing Director of Boustead Projects said, “We are honoured to be the selected design-and-build partner for JEP and Markono, both clients which happen to be relocating from existing facilities and expanding in Singapore. The JEP Facility marks our 17th project in the aerospace industry and our 9th project at the Seletar Aerospace Park, taking our leading track record in the industry to 200,000 square metres.” Mr Chu added, “Even in this more challenging environment, we continue to pursue opportunities on several fronts for design-and-build and development deals here at home in Singapore, as well as across regional markets where we intend to strengthen our overseas presence.”
The latest contracts will raise the Boustead Projects Group’s order book backlog (as at the end of June plus new orders since) to S$273 million. These contracts are not expected to have a material impact on the profitability, earnings per share and net tangible asset value per share of the Boustead Projects Group in the current financial year ending 31 March 2016.
None of the Directors or controlling shareholders of Boustead Projects has any interest, direct or indirect, in the above contracts. Listed on the Main Board of the SGX on 30 April 2015, Boustead Projects is a 51%owned subsidiary of Boustead Singapore Limited, a progressive global infrastructurerelated engineering services and geo-spatial technology group which is separately listed on the Main Board of the SGX.
By Order of the Board Eng Min Geok Company Secretary
(20-10-2015, 06:47 PM)thor666 Wrote: Contracts awarded.. Not a lot but better than a drought..
Boustead Projects Limited (“Boustead Projects”) – a leading specialist in real estate solutions – is pleased to announce that it has been awarded two contracts in Singapore recently, with a total value of S$59 million.
The first contract involves the delivery of an integrated production and office facility (the “JEP Facility”) for JEP Precision Engineering Pte Ltd (“JEP Precision Engineering”) at the Seletar Aerospace Park (“SA Park”) in Singapore. JEP Precision Engineering is a major supplier of high quality precision-machined products for the aerospace, oil & gas and machine tool industries, with more than half of its production dedicated to aircraft engine components. To be completed in calendar year 4Q 2016, the JEP Facility will house a single-floor production area and adjoining four-floor office.
The second contract involves the delivery of an integrated production, logistics and office facility (the “Markono Facility”) for Markono Print Media Pte Ltd (“Markono Print Media”) at Pioneer Crescent in Singapore. Markono Print Media creates exceptional value for its clients through the provision of world-class printing, warehousing and fulfilment, and other supply chain solutions. To be completed in calendar year 4Q 2016, the Markono Facility will house eight floors of production, logistics and office space, incorporating an advanced automatic storage and retrieval system within its warehouse.
Mr Thomas Chu, Managing Director of Boustead Projects said, “We are honoured to be the selected design-and-build partner for JEP and Markono, both clients which happen to be relocating from existing facilities and expanding in Singapore. The JEP Facility marks our 17th project in the aerospace industry and our 9th project at the Seletar Aerospace Park, taking our leading track record in the industry to 200,000 square metres.” Mr Chu added, “Even in this more challenging environment, we continue to pursue opportunities on several fronts for design-and-build and development deals here at home in Singapore, as well as across regional markets where we intend to strengthen our overseas presence.”
The latest contracts will raise the Boustead Projects Group’s order book backlog (as at the end of June plus new orders since) to S$273 million. These contracts are not expected to have a material impact on the profitability, earnings per share and net tangible asset value per share of the Boustead Projects Group in the current financial year ending 31 March 2016.
None of the Directors or controlling shareholders of Boustead Projects has any interest, direct or indirect, in the above contracts. Listed on the Main Board of the SGX on 30 April 2015, Boustead Projects is a 51%owned subsidiary of Boustead Singapore Limited, a progressive global infrastructurerelated engineering services and geo-spatial technology group which is separately listed on the Main Board of the SGX.
By Order of the Board Eng Min Geok Company Secretary
Doesn't quite matter since it is bargains galore everywhere
Funny... I m highly confused... almost concussed... competitive tender... reasonably close bids and rejected...
Given that Singapore is such a developed country... why can't they adopt a simple layman tender system like bid above reserve so that transparency can be improved and need not waste so much precious time and costs prior to risky land tenders?
As for BP, basically, the environment is even tougher with risk taking initiatives being concluded by authorities on such grounds...
I have said many times over... its not about the $, BP has the solid backing of Boustead Singapore, Middle Eastern SWF and even bankers that are hungry to get on their panels... its their ability to secure good projects with stringent costs controls.
The Housing & Development Board (HDB) launched the industrial development site at Ubi Avenue 1 for tender on 30 Jun 2015. 2 The details of the sale site are as follows: Location Ubi Avenue 1Proposed Development Industrial Development Zoning Business 1 Site Area 6,103.3 sq m Permissible Gross Plot Ratio 2.5 [maximum]; 2.0 [minimum] Building Height 50-55m AMSL Lease Term 30 years 3 When tender closed on 25 Aug 2015, the following five bids were received: S/N Name of Tenderer Tender Price1 BP-DC Pte Ltd $19,857,721 2 Ascendas (Paya Lebar) Pte Ltd $16,753,000 3 Goldprime Development Pte Ltd $13,588,000 4 Soilbuild Group Holdings Ltd $13,138,800 5 YIHE Development (South Pacific) Pte Ltd $8,819,677 4 As the prices offered were too low, the bids submitted by the tenderers were not accepted.
Doesn't quite matter since it is bargains galore everywhere
Funny... I m highly confused... almost concussed... competitive tender... reasonably close bids and rejected...
Given that Singapore is such a developed country... why can't they adopt a simple layman tender system like bid above reserve so that transparency can be improved and need not waste so much precious time and costs prior to risky land tenders?
As for BP, basically, the environment is even tougher with risk taking initiatives being concluded by authorities on such grounds...
I have said many times over... its not about the $, BP has the solid backing of Boustead Singapore, Middle Eastern SWF and even bankers that are hungry to get on their panels... its their ability to secure good projects with stringent costs controls.
The Housing & Development Board (HDB) launched the industrial development site at Ubi Avenue 1 for tender on 30 Jun 2015. 2 The details of the sale site are as follows: Location Ubi Avenue 1Proposed Development Industrial Development Zoning Business 1 Site Area 6,103.3 sq m Permissible Gross Plot Ratio 2.5 [maximum]; 2.0 [minimum] Building Height 50-55m AMSL Lease Term 30 years 3 When tender closed on 25 Aug 2015, the following five bids were received: S/N Name of Tenderer Tender Price1 BP-DC Pte Ltd $19,857,721 2 Ascendas (Paya Lebar) Pte Ltd $16,753,000 3 Goldprime Development Pte Ltd $13,588,000 4 Soilbuild Group Holdings Ltd $13,138,800 5 YIHE Development (South Pacific) Pte Ltd $8,819,677 4 As the prices offered were too low, the bids submitted by the tenderers were not accepted.
The public procurement is governed by an archaic list of rules from MOF which has been 1. Rather outdated and 2. Too complex for layman adminstrators to execute when it's usually not their core job and they don't really care that much.
If memory serves me well the government was looking into setting a centralised procurement function a while back; sadly that has not taken off.
My take as with many of the key issues is that there just isn't much political will to change in our leaders any more.
31-10-2015, 11:05 AM (This post was last modified: 31-10-2015, 11:13 AM by CY09.
Edit Reason: Edits
)
There is a floor price for every land that is tendered (determined when the land is released). unfortunately, the bidders did not bid above the floor price. Therefore, none were accepted.
Recently, JTC rejected bid for a industrial B2 land despite releasing the Woodlands plot for GLS.
01-11-2015, 02:21 AM (This post was last modified: 01-11-2015, 02:22 AM by VIChris.
Edit Reason: Included too many multiples quotes
)
(31-10-2015, 10:50 AM)thor666 Wrote: The public procurement is governed by an archaic list of rules from MOF which has been 1. Rather outdated and 2. Too complex for layman adminstrators to execute when it's usually not their core job and they don't really care that much.
If memory serves me well the government was looking into setting a centralised procurement function a while back; sadly that has not taken off.
My take as with many of the key issues is that there just isn't much political will to change in our leaders any more.
Sent from my D5503 using Tapatalk
Centralised procurement will take too long to process. Companies that deal with government projects will be staved to death for just waiting.
(31-10-2015, 11:05 AM)CY09 Wrote: There is a floor price for every land that is tendered (determined when the land is released). unfortunately, the bidders did not bid above the floor price. Therefore, none were accepted.
Recently, JTC rejected bid for a industrial B2 land despite releasing the Woodlands plot for GLS.
That was what GG was saying. The reserve price should have been revealed, so that bidders don't end up wasting their time and resources.
I tend to believe that the bidders are bidding close to market. The other bidders are also established property players, so I am quite doubtful that the price offered by BP is "too low". This is especially when BP's bid is about 50% ahead of the 2nd highest bidder. (Correct me if I'm wrong).
Guess thats the source of our cost inflation. That is probably the same source of the cost inflation for private housing.
Then again, I feel that why not let market forces freely determine the "real" equilibrium price, instead of HDB declaring that certain prices are "too low". Let the highest bidder win, but also ensure that society is better off in terms of social good, such as employment opportunities. That is a more crucial role to play out, instead of hoarding the available land. There is much good to achieve.
Just my worthless 2 cents.
The thing I am scared most is not nightmares or market crashes..... Its my greed that I fear the most.
When people ask what is my target price, I never have any good answer for it because Philip Fisher said before (in Common Stock Uncommon Profit) that the best time to sell is never. Equity investment is buying into ownership, not betting slips.
The path to greatness and wealth is necessarily dangerous.... because greed is a fearsome fore that threatens your success at every step.
04-11-2015, 05:34 AM (This post was last modified: 04-11-2015, 05:36 AM by greengiraffe.)
(04-11-2015, 12:04 AM)vesfreq Wrote:
(31-10-2015, 11:05 AM)CY09 Wrote: There is a floor price for every land that is tendered (determined when the land is released). unfortunately, the bidders did not bid above the floor price. Therefore, none were accepted.
Recently, JTC rejected bid for a industrial B2 land despite releasing the Woodlands plot for GLS.
That was what GG was saying. The reserve price should have been revealed, so that bidders don't end up wasting their time and resources.
I tend to believe that the bidders are bidding close to market. The other bidders are also established property players, so I am quite doubtful that the price offered by BP is "too low". This is especially when BP's bid is about 50% ahead of the 2nd highest bidder. (Correct me if I'm wrong).
Guess thats the source of our cost inflation. That is probably the same source of the cost inflation for private housing.
Then again, I feel that why not let market forces freely determine the "real" equilibrium price, instead of HDB declaring that certain prices are "too low". Let the highest bidder win, but also ensure that society is better off in terms of social good, such as employment opportunities. That is a more crucial role to play out, instead of hoarding the available land. There is much good to achieve.
Just my worthless 2 cents.
Correction: BP's bid is 18.5% ahead of that of AREIT...
So HDB doesn't view all these bids as realistic. In addition if these bids are not realistic then why bother to go for official tendering after someone previously triggered the whole exercise via a bid that is supposedly acceptable to HDB?
Anyway, I suppose I belong to the minority 30% that felt strongly that both the statutory and the govt linked segment have much to improve. With the tough times ahead of us in terms of strong headwind posed by global economies, stubbornly and rigidly high costs structure domestically caused by the last decade of prosperity, it will be interesting to see how Singapore's economy navigate through the current storm that has already been besieged by several ongoing problems such as domestic transportation, healthcare, over-crowding and aging issues faced by the society.
The unprecedented pathetic activity levels on SGX is probably a leading indicator of things to come...
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