SPH: Co. has been awarded the tender for a Sengkang site.
- DMG maintains Neutral, TP $3.91. Think SPH paid a fair price, estimate SPH’s share of site and construction costs at $291m, in-line with valuation of SPH’s stake in the prospective retail mall.
Estimate the mall to cost $1,950/sqft, avg passing rent of S$12.80/sqft which is in line with other suburban malls such as JCube (S$12/sqft) and Causeway Point (S$12/sqft). Value the prospective mall based on a cap rate of 5.5%, leave earnings estimates and valuation for SPH unchanged.
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