City Developments

City Developments: Announced that it has formed a JV with Malaysia’s IOI Corp at its South Beach Project. IOI Corp will take a 49.9% stake in project, with City Dev retaining 50.1% stake. JV for South Beach follows the completion of IOI's purchase of US-based Elad Group's 1/3 stake in the South Beach Consortium for $173.9m, and CDL's acquisition of Dubai World unit Istithmar's one-third stake for $155m…..

UOB Kay Hian note that the transaction increases CDL’s interest in the project from 33% to 50.1% and view the transaction positively due to the increased stake in the strategically located project and the substitution by a strong JV partner. However, overall impact is low as transaction would result in marginal 9c/share or a 0.7% accretion to house RNAV. We note that majority of street has Hold Rating on Stock with mean TP of $11.92.