Capitaland

Capitaland: OCBC maintains Buy with $3.32 TP. Note that the serviced residence business unit of CapitaLand (CAPL), the Ascott has agreed to acquire a hotel in London, the 230-unit Cavendish London, for GBP158.8m ($311m). The group expects to convert the asset into a serviced residence under the Ascott brand and rename it the Ascott St James London. The development is located on Jermyn St, in the St. James area of Mayfair, and would increase Ascott’s portfolio to seven properties in Central London. At a price of $1.35m per room, house believe that the price paid is fair and see little accretion to CAPL’s RNAV at this juncture. In addition, also note that Capitaland has announced last Fri the establishment of a $5b Euro MTN Programme, further increasing its accessibility to the capital markets and enhancing its balance sheet flexibility.