- City Developments (SGX:C09)’s recent acquisition of St Katherine Docks (SKD) and Sofitel Brisbane are opportunistic moves, in our view, well supported by its healthy balance sheet position.
- Operationally, City Developments's core earnings are expected to rebound this year from healthy residential sales and the hospitality sector recovery.
- - Read this at SGinvestors.io -
- City Developments's valuation remains cheap at >50% discount to its RNAV.
Boosting its UK commercial portfolio for potential spin-off.
- City Developments announced (on 09 Mar 2023) the purchase of St Katherine Docks in central London from Blackstone for GBP395m (S$636m), or ~GBP751 psf (S$1,209 psf).
- - Read this at SGinvestors.io -
- Based on our estimates, the acquisition translates to an initial NPI yield of slightly >7%, which we believe sufficiently buffers in the weak near-term economic outlook in the UK.
- With this acquisition, City Developments now has a sizeable UK commercial portfolio of ~GBP1bn – management noted it could possibly be spun off into a private fund or REIT at the right time, and drive in its fund management strategy.
Maiden entry into Brisbane’s hospitality sector.
- Read more at SGinvestors.io.
Vijay Natarajan RHB Securities Research | https://www.rhbgroup.com/ 2023-03-31
Read also RHB's most recent report:
2024-08-15 City Developments - Shifting To Asset Deleveraging Mode; BUY.
Previous report by RHB:
2024-06-06 City Developments - More Divestments, Nimble Balance Sheet Needed.
Price targets by other brokers at City Developments Target Prices.
Listing of research reports at City Developments Analyst Reports.
Relevant links:
City Developments Share Price History,
City Developments Announcements,
City Developments Dividends & Corporate Actions,
City Developments News Articles
