Wheelock Properties

Wheelock Properties: DMG notes the developer, which accumulated a large cashpile following several highly successful projects over the last few years, has been quietly sitting on the sidelines since its last site acquisition of Habitat 1 in 2006. As of Mar ‘12, Wheelock was sitting on net cash of $780m ($0.65/share). In April, the group moved another 10 units of its Orchard View project after slashing prices by 18% to $2,500psf, raising another $65m. It stands to collect another $150m in 2H12 from the final portion of progress billings at its Scott Square project. This will bring its cash level back to around the $1b mark. The group has since started to put its cash to work. In April, the group spent $245m to increase its investments in quoted securities from $337.3m to $582.5m. As it has not made any announcements to the changes to its existing stakes in SC Global and HPL, DMG believes the new investments are likely to be in property-related counters listed overseas, given property stocks today are trading at wide discounts to their RNAVs amid concerns of a decline in the physical market. DMG notes, since the demise of its ex- CEO David Lawrence, Wheelock has started to take a more active stance to deploying its capital, which could help narrow the 40% discount that the stock is trading relative to RNAV estimate of $2.67. Wheelock is +0.3% at $1.63, on razor thin volume.