Wing Tai

Wing Tai: its 1/3 JV with Metro Australia and UE have submitted the top bid of $516.3m ($960 psf) for a site at Prince Charles Crescent, 1.5% above the next higher bidder City Dev. The acq is Wing Tai’s first since Oct ’10. The site saw firm demand with 8 bidders in total, incl larger developers such as UOL, Keppel Land, Wheelock and FNN. As a comparison, City Dev paid $754 psf in Dec ’11 for a site next to Ascentia Sky nearby. The top bid came in above mkt expectations of $600-900 psf, likely reflecting rising competition for sites located near MRT stations. The 537.7k sf gfa site is located near the Tanglin residential estate, Redhill MRT station, and within a 10 min drive to Orchard Road and the CBD. It can be developed into 590 unit condo with a breakeven cost of $1400psf. Deutsche estimates a slim gross margin of 12% at an ASP of $1600 psf (in line with Sky Habitat at Bishan MRT, vs recent sales at Wing Tai’s nearby Ascentia Sky transacted at $1500+ psf). Deutsche pencils a 3ct/sh accretion to Wing Tai’s RNAV of $2.35. Maintains its Hold rating with TP $1.41, noting that the developer has one of the lightest landbank (at 0.9m sf) amongst the larger developers.