Capitaland 01 (May 08 - May 10)

[ishak]

De-rating on all fronts
UNDERPERFORM Downgraded
Price: S$4.26 @09/09/08
Target: S$4.21
10 September 2008

• De-rating of its key markets. CapLand’s inventory is beginning to build up in China. We believe Chinese developers are starting to cut prices. CapLand’s large exposure to this market could prove to be a bugbear in the near term. Alice Chong, our Hong Kong/China property analyst believes that prices have fallen 10% YTD in China. A weakening economy places the value of its commercial assets at risk. In Singapore, we believe CapLand faces the possibility of lower-than-expected ASPs for its residential projects and value impairment for some of its expensive land bank.

• Balance sheet not a concern but recycling model faces headwinds. We believe that market concerns of an over-stretched balance sheet masked under the group’s complex associate holdings are overdone. We understand that associate debts are all structured on limited recourse with no corporate guarantees. We estimate that net gearing will fall to 0.53x from 0.68x (as at 2Q08) with proceeds from recent divestments. Even if we assume off-balance sheet debt and distress scenarios, we estimate that net-gearing will rise to only 0.82x. However, as divestible assets dwindle against a backdrop of poor credit and property market conditions, the sustainability of its capital-recycling model could be severely tested in the near term.

• Downgrade to Underperform from Neutral. Our FY08-10 core EPS estimates have been lowered by 6-17% on lower capital value assumptions. We also lower our end-CY08 RNAV estimate from S$6.15 to S$5.26 and peg our new target price of S$4.21 (previously S$6.15) at a 20% discount to RNAV (previously parity) as we see
the potential for further weakness in China, slowing AUM growth and impairment of its Singapore residential land bank.

[ishak]

Janus ups stake in CapitaLand to 7.1%
BT, 10 Sep 2008

CapitaLand said on Wednesday that major shareholder, Janus Capital Management LLC, has raised its stake in the property group to 7.10 per cent, from 6.01 per cent previously.

The change in stake was the result of a series of transactions over the period from August 15 2008 through Sept 5 2008.

Janus bought an additional 30.77 million ordinary shares during the period.

Janus now holds 200.50 million CapitaLand shares.

[LenaHuat]

Grab cash:

Abu Dhabi, 11 September 2008 - Capitala, the Abu Dhabi-based real estate company,
today announced it has launched the residential sales of Rihan Heights, the first phase of
Arzanah, its flagship development. Strategically located at the gateway point to the island of
Abu Dhabi, Arzanah is one of the few remaining parcels of prime real estate on the island,
located just minutes away from Abu Dhabi city centre and the Central Business District.
Arzanah is a 1.4 million square metre fully integrated, mixed use development surrounding
Zayed Stadium, offering a unique blend of quality residential, leisure, sports and retail
environment that has been designed by some of the world’s finest designers, architects and
engineers.
An exclusive sales invitation was extended for the first phase of the development, Rihan
Heights, to all UAE Nationals who registered interest at the Capitala stand during Cityscape in
Abu Dhabi earlier this year. Rihan Heights comprises 14 exclusive villas carefully planned
around the plot and five residential towers with over 800 beautiful homes ranging from one to
three bedroom apartments, as well as penthouses.

This is a 49% held subsidiary.

[iam802]

Currently, trading around $4.

Yesterday's closing price is around $4.1 (resistant level)

[ishak]

Strong headwinds ahead
HOLD, Fair Value: S$3.71
29 Sep 2008

Diversified funding sources can keep business model going. While we may see near term headwinds for CapitaLand (CapLand) to recycle its capital, over the long term, we still remain positive about its capital recycling
business model. Recent newsflow suggests that there are still interests in Asia investments by private equity (PE) funds. Even if this comes to a standstill, CapLand still has other sources of funding such as banks, its
sponsored REITs and divestment of its assets to third party.

Challenging times for developers in China… Recent news of China Vanke cutting prices of its developments and PBOC’s call for tightening of lending to developers had sent negative signals on the health of the China property market. We also think recent cut in lending rates and reserve ratio for Chinese banks to have limited impact on the property sector. Sentiments on property developers with exposure in China could remain fragile but CapLand’s balanced exposure to different parts of China should allow it to better handle price decline in any particular area.

…and Singapore. Revenue visibility still remains healthy over the mid term. CapLand’s S$4bn of Singapore residential property sales in 2006/07 should continue to provide revenue visibility over the next 2 financial years. However, take-up for new launches had been slow so far, in-line with the weak market sentiment towards property. With no foreseeable catalyst in sight for a recovery in appetite towards higher priced properties, we think take-up for CapLand’s target launches for the year ahead will remain weak.

Cash position to strengthen with recent divestments. We expect to see cash position further strengthen in 2H08, with recent divestments expected to bring in total cash of S$3bn upon completion. Cash inflow could be used to reduce debts and increase its land bank in China when opportunity arises. After adjusting for OBS debts and cash from divestments, CapLand’s net debt/equity ratio would have strengthened from 0.68x to
0.56x.

Resume coverage with HOLD. Based on our RNAV of S$5.29 and pegging a discount of 30% to its RNAV, we derive a fair value of S$3.71 for CapLand. Fundamentally, CapLand’s financial strength still remains strong and we think any price movement back towards the historically low RNAV discount of 50-60% is unwarranted. We resume our coverage with a HOLD rating.

[winston]

The outlook for developers here could get worse, with write-downs on asset values possible, Credit Suisse said.

The bank said CapitaLand could write down as much as S$200 million ($139.5 million) on its Farrer Court and Char Yong Gardens projects as the estimated selling prices of these projects are expected to be below the breakeven prices

[winston]

TOL:-

Does it make sense that this counter is up 17% today ?

Also, just noticed that a Capitaland Warrant is up 1200 % today !

[millionairemind]

October 31, 2008, 6.02 pm (Singapore time)

CapitaLand Q3 profit falls 26% on slower home sales

By UMA SHANKARI

Singapore's largest developer CapitaLand said on Friday that net profit for its third quarter ended September 30, 2008 fell 25.6 per cent to S$419.4 million, from S$563.9 million a year ago.
Revenue in 3Q 2008 was fell to S$597.2 million, down 33.3 per cent from S$895.8 million in 3Q2007. CapitaLand was hit by lower sales revenue from development projects in the core markets. But the decline in turnover was mitigated by stronger rentals from investment properties and higher fee-based income from real estate investment trusts (Reits) and funds under the group's management, it said.

Earnings for 3Q 2008 were also boosted by gains from the divestment of Capital Tower Beijing in China and 1 George Street in Singapore, as well as the injection of the Raffles City properties in China into the Raffles City China Fund.

CapitaLand's assets under management stood at S$24.8 billion as at 30 September 2008, up 18 per cent compared to the previous quarter.

CapitaLand is well-positioned to ride out the global financial and economic uncertainties, said CapitaLand chairman Richard Hu. 'It has the strong balance sheet, liquidity and diversified sources of funding necessary to act on investment opportunities that will arise in the current capital-constrained environment,' he said.

Chief executive Liew Mun Leong pointed out that the company has strengthened its balance sheet by increasing its cash position to S$4.2 billion.

This strong balance sheet will be particularly useful in the current global financial crisis which has brought down not only Wall Street's blue chip financial institutions but also created in its wake a global recessionary environment,' Mr Liew said. 'With the situation deteriorating rapidly, we are strategically watching the distressed markets, very carefully seeking out opportunities to make the right acquisitions at the right price.'

CapitaLand will continue to seek out opportunities as before, focusing capital and human resources into its existing established sectors of residential, retail, commercial, hospitality, integrated developments and financial services in core markets, he added.

[learn2win]

Key resistance @ 3.27. Hit 3 times but got blocked out. The fourth time is coming.

[millionairemind]

Published November 10, 2008

A chunk of CapitaLand assets may be up for grabs
Four pieces of industrial assets in Singapore are believed to be coming to the market following a shift in the group's strategy

By KALPANA RASHIWALA

(SINGAPORE) Property giant CapitaLand is understood to be looking to sell its portfolio of four industrial properties in Singapore.

In the offing: Assets to be sold are expected to include Kallang Avenue Industrial Centre and Kallang Bahru Complex
The assets are said to be worth more than $300 million and comprise Kallang Bahru Complex and the adjoining Kallang Avenue Industrial Centre, Corporation Place in Jurong, and Technopark@Chai Chee.

Market watchers reckon CapitaLand may be open to selling the properties individually or as a portfolio.

CapitaLand's plan to divest the portfolio reflects its recent strategy of exiting the industrial/logistics arena and focusing on its core strengths in commercial, residential and serviced residences, market watchers say.

Even up to six months ago, the property giant had ambitions to grow in the industrial/logistics real estate space. It is said to have bid, unsuccessfully, last year for the $1.7 billion portfolio of industrial properties divested by JTC Corporation. And not too long ago, CapitaLand had its eye on listing an industrial Reit, some analysts noted.

But just a few months ago, the Singapore-listed group made a strategic decision to focus on its core strengths with the crash in financial markets.

'What this also means is that within the Temasek stable of property companies, the logistics/industrial sector will be left pretty much to Mapletree Investments group,' a market watcher noted.

In September, BT reported that CapitaLand had put on hold its tie-up with subsidiary Australand to set up a pan-Asian development platform in the industrial/ logistics business announced in February this year.

The two adjoining industrial properties at Kallang Avenue that CapitaLand owns are understood to have redevelopment potential. Kallang Avenue Industrial Centre comprises four blocks of two-storey workshops, while Kallang Bahru Complex is a nine-storey flatted warehouse.

The two sites are zoned for Business 1 use (similar to light industrial use) with a 3.0 plot ratio, of which at least 2.5 must be set aside for B1 use, with the rest for white uses. (The plot ratio is the ratio of maximum potential gross floor area to land area.)

Kallang Bahru Complex is on a site with about 70 years of remaining lease, while the Kallang Avenue Industrial Centre plot has a balance lease term of some 67 years.

The two properties were part of the former Pidemco Land portfolio. In 2000, Pidemco and DBS Land merged to form CapitaLand.

Corporation Place and Technopark@Chai Chee used to be under DBS Land. Technopark@Chai Chee, with a book value of $205.9 million as at Dec 31, 2007, comprises six high-tech industrial blocks with a total net lettable area of about 1.14 million sq ft on a sprawling site that also has a gymnasium and other amenities.

The building is almost 100 per cent occupied by tenants such as Flextronics, SIA Engineering, British Telecom, Sun Microsystems, Alacatel-Lucent and DBS Bank.

The property may offer a high-yield investment play to potential investors.

On the other hand, the Chai Chee site could also be redeveloped. The site has enjoyed an enhancement in use under the Urban Redevelopment Authority's Draft Master Plan 2008, with a Business Park zoning (2.5 plot ratio), compared with Business 1 zoning (2.5 plot ratio) under Master Plan 2003.

Corporation Place in Jurong is a seven-storey high-tech flatted factory development boasting tenants such as Siemens, Hewlett-Packard, Panasonic and Rockwell Automation.

The property has total net lettable area of about 622,000 sq ft and is 75 per cent owned by CapitaLand, with Ascendas Land owning the remaining 25 per cent. BT understands that Corporation Place will be offered for sale on a 100 per cent basis, that is, by both owners. CapitaLand fully owns the other three industrial properties.

CapitaLand reported a 25.6 per cent year-on-year drop in third-quarter net earnings to $419.4 million, on weaker home sales. However, the group reported stronger rentals from investment properties and higher fee-based income from Reits and funds under management.

The counter closed five cents higher on Friday at $3.17.