SingTel - Beefs Up War Chest Via Comcentre Sale
- Following SingTel's announcements on 23 Feb of the divestment and redevelopment of Comcentre (its headquarters along the Orchard Road belt), it today announced the selection of global real estate group Landlease as appointed developer. As part of the deal, SingTel (SGX:Z74) will transfer Comcentre to PropCo in which Landlease will subscribe for a 49% stake (the balance 51% to be owned by SingTel) in 2024. Net proceeds to SingTel in 2024 will be S$1.2bn-1.3bn.
- Total redevelopment cost is ~S$2.7bn (including land) and will be funded by external financing as well as equity commitments from SingTel and Landlease over CY24-28F.
- This forms part of SingTel’s asset recycling initiatives. Besides illuminating the market value of the asset, the net proceeds from the divestment will be reinvested into the core business (e.g. 5G rollouts, spectrum payments) and used to drive expansion into higher-growth/new businesses (e.g. NCS, regional data centre, and digital banking).
- This will also help preserve cash generated from the core business to sustain its 60- 80% dividend payout policy, which our analysis of the projected outflows and inflows in FY3/23-25F suggests SingTel can comfortably meet.
- We keep our forecasts, ADD rating and target price unchanged for SingTel.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
FOONG Choong Chen CGS-CIMB Research | Sherman LAM Hsien Jin CGS-CIMB Research | https://www.cgs-cimb.com 2022-06-01 2022-06-01
Read also CGS-CIMB's most recent report:
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