BUY; S$5.85; Price Target: S$ 7.20
F&N forms 50:50 JV with Sekisui House in Australia to take stake in Central Park
What's new?
F&N subsidiary, Frasers Property Australia (FPA) announced this morning that it has entered into a 50:50 JV agreement with Sekisui House, Ltd. to develop the Central Park project located in Sydney, Australia. This will involve the establishment of 2 unincorporated JVs (UJVs), which will acquire the rights to develop the project, and thereafter to recognise proceeds and profits from the development. The consideration to be paid by the UJVs to FPA is A$460m.
This transaction will result in a net gain of c.S$52m.
Central Park is a mixed-use 5.8 hectare development located in central Sydney and will comprise c.1,900 apartments, student housing, hotel, a 16,000 sqm retail centre and a 75,000 sqm commercial office block. FPA bought the site in 2007 for A$208m, and obtained masterplan approval in early 2009.
Apartments have been launched in phases and sales todate numbered over 500. We understand average selling price was at A$1,100 psf.
Our view:
Mildly positive, net gain of c.S$52m and to drive assets recycling. We see this piece of news as mildly positive for F&N given that it helps to lock in some gains and accelerate its asset recycling drive. As mentioned above, this transaction will net a gain of c.S$52m which we believe should be booked in this current financial year (FYE Sep'11). Furthermore, there could be more future collaboration between F&N and Sekisui as their partnership extends beyond Singapore. This also adds credibility to the quality of assets being developed by F&N in Australia. Maintain BUY with TP S$7.20.
No comments:
Post a Comment