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Wednesday, June 27, 2012

Tuan Sing

Tuan Sing: CEO William Liem interviews with The Business Times. Says Tuan Sing is looking to expand in the hotel sector in Australia. In addition, it is open to acq of existing hotels as well as developing new ones in Singapore, China and possibly Indonesia. Intends to transform itself into "a real property developer". In addition to its property projects in Singapore and China, it also eyeing real estate devt and invmt opportunities in the residential, retail and office sectors in these two countries, and in Indonesia as well. The group's hotel interest in Australia is held through its half stake in Grand Hotel Group (GHG), which owns Grand Hyatt Melbourne and Hyatt Regency Perth. The two hotels have undergone refurbishment in the past few years. Meanwhile, the Perth property has significant redevelopment opportunity with potential for > 500k sf of additional gfa that can be built. In Spore, BT estimates that the group’s property projects should create a nice income stream. BT's back-of-the-envelope calculation suggests that Seletar Park Residence could generate a pretax profit of ~$56m (assuming breakeven cost of ~$900 psf, cost of land at $468 psf ppr, ASP of $1,100 psf and saleable area of ~280k sf). For The Sennett, pretax profit could be ~$66m based on an average launch price of $1,300 psf, saleable area of ~330k sf and a breakeven cost of ~$1,100 psf. Tuan Sing paid $567 psf ppr for the site. Assuming the proposed condo on the Cluny Park Road site commands an ASP of $3,000 psf, it could yield a profit of ~$67.5m, using a breakeven cost of ~$2,100 psf and saleable area of ~75k sf. In the CBD, Tuan Sing plans to redevelop Robinson Towers, its Annexe building and International Factors Building into a 23-storey office project with 257k sf GFA including ~12.5k sf of retail space. However, the group has yet to decide when to begin work. The annexe is on a plot with 99-year leasehold tenure (starting 1981) while the two other buildings have 999-year tenure. Market watchers reckon it would make sense for Tuan Sing to seek a lease upgrade for the annexe site to 999 years before commencing construction. Mr Liem estimated that it would cost Tuan Sing ~$165m to build the new project. Adds its valuation of the land is $230m or ~$900 psf ppr, is competitive vs the $872 psf ppr at which the govt last year sold the 99-year Paya Lebar Square site.

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