- UOL Group (SGX:U14)’s operating profit grew 4% y-o-y to S$314.5mil in 1H24, accounting for ~47% of our full-year estimate. This was largely underpinned by higher earnings from property investments, Singapore commercial properties and Pan Pacific Serviced Suites Kuala Lumpur, as well as hotel operations at Pan Pacific Singapore.
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Realisable value of asset validated.
- UOL announced the proposed sale of Stamford Court, a non-core asset, as part of its portfolio rejuvenation strategy.
- The sale of shares in UIC Land Pte Ltd was at an agreed value of S$132mil attributed to the Property, higher than its latest valuation of S$109.5mil as at 30 June 2024, more than validates its realisable value. Completion of the sale is expected by 4Q24.
Astute residential strategy likely to sustain UOL’s solid track record in property development.
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- UOL is confident in securing sites with attractive attributes at favourable pricing and can scale the unit size and price quantum to appeal to local buyers. Notably, the group added Orchard Boulevard GLS site and Holland Drive GLS site, both within the core central region (CCR). to its landbank at ~30% lower land prices compared to adjacent sites amid subdued developer interest.
- We believe that fortune favours the brave, and developers adding strategic sites into their landbank inventory at advantageous prices will benefit when market sentiment turns.
Strong positive rental reversions a pleasant surprise.
- Read more at SGinvestors.io.
