CapitaLand: In response to a Bloomberg article that it has formed a consortium with a Norwegian Sovereign Fund to acquire Asia Square Tower 1 from BlackRock, CapitaLand has announced that negotiations are ongoing, and there is no certainty that a transaction may arise.
It highlights that if the transaction proceeds, it will tap internal funds and available credit lines to finance the deal. CapitaLand’s cash and equivalent stood at $3.5b wile undrawn facilities was approximately $3.1b as at 30 Jun.
The Bloomberg article cited that an agreement with BlackRock could be arrived at next month, and that the consortium beat ARA Asset Management in the bid.
Maybank-KE had upgraded CapitaLand to a Buy in August, citing attractive valuations. The developer offers stability and diversity with assets spread across Singapore and China, while more than 70% of its assets produce recurring income.
In addition, the recognition of pre-sold homes in China should power earnings in the coming year. A rebound in buying sentiment in Singapore and China would be a catalyst for the stock.
CapitaLand is currently trading at 0.75x P/B and 34.5% discount to Maybank-KE’s RNAV of $4.64.
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