Sing Post: defensive angle on a down market day.
Lim & Tan notes Sing Post stock has reacted positively to recent news of, a) hot demand for new office space at Guthrie’s Paya Lebar Square (~$1750 psf capital value, ~$6 psf pm rentals), b) successful launch of its $350m 4.25% senior perpetual cumulative securities.
Highlights that the full potential of Sing Post’s 1.5m sf Post Centre has not been tapped, which has 300k sf of office space, and the balance for retail and industrial use. Believes much can be done to enhance shareholders value (eg. car show rooms).
Says at current price, Sing Post’s mkt cap is “only” $1.97b, which translates to $1330 psf on back-of-envelop calculations.
Believes shareholders would be happy to wait for the rerating, while receiving “sustainable” 6.1% yield on the shares (vs 4.25% on the perpetual securities).
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