SPH

SPH: 60% owned Clementi Mall scheduled to be operational by Jan’11. Anchor tenants are FairPrice Finest, Foodfare and the National Library Board, to take up a combined 50k sqft of space of the max allowable retail NFA of 194k sqft. NTUC FairPrice and NTUC Income Insurance own the remaining 40% of the JV…

The 99yr leasehold property was bid for $542m. Including an est fitting-out cost of ~$50m, the unit price works out to $3055 psf of retail NFA. To achieve a 5.5-6% net property yield that most investors would want today for such an asset, an avg gross mthly rental of ~$18psf would be required. This compares with the $31.1 psf pm for prime Orchard Road rents, and $28.5 psf pm for suburban malls, according to CBRE.
Recent Street views tilted toward Buy. Targets range btwn $3.50-4.60.