Keppel Land

Keppel Land: has acquired a 10.37 ha prime residential sit ein the Sino-Singapore Tianjin Eco-City for Rmb241.1m. The deal was signed at the 6th Singapore-Tianjin Economic and Trade Council meeting in Spore this morning. At the conference, a total of 12 new projects were signed between Spore and Tianjin, building upon Singapore’s existing investments in the Chinese city. Relations between both cities are already warm, with bilateral trade having increased 32% to US$2.2b in 9M13. Keppel Land plans to develop ~350 landed homes on the new site, which is located within the Start-Up Area and close to the future city centre in the Tianjin Eco-City. Targeted at the upper-middle income homebuyers, the new landed homes will be launched progressively, starting from 2H14. Keppel Land’s purchase price translates to RMB2.3k psm land area which is a reasonable price though limited impact to RNAV is expected. OCBC continues to like KPLD for its diversified exposure across property segments and geographical markets, and a strong balance sheet with $900.4m in cash and 44% net gearing. Maintain Buy with TP $4.09 (30% discount to RNAV). As background, Keppel Land China’s first eco-homes in the Tianjin Eco-City, the 1,672-unit Seasons Park, was launched in 2010. As at end-Sep 2013, ~ 77% of the 1,105 launched units have been sold. Phase 2, Seasons Garden, comprises about 1,190 homes and was launched in Aug 2013. The commercial development, Seasons City, will comprise three office towers and retail premises with a total gross floor area of 162,000 sm. The first phase will feature one office tower and a retail complex, and is expected to be completed by 2017.