Thursday, May 26, 2011


CMA/CapitaLand/CMT: Jointly submitted top bid of $969m ($1,012psf GFA) for white site at Boon Lay Way, 6% above 2nd bid from United Engineers and SPH. As a comparison, Lend Lease acquired adjoining parcel in Jun last yr at $650psf GFA. Site is located next to Jurong East MRT with GFA of 957k sf. 40% of GFA is stipulated for office use and remaining used for retail, hotel or residential uses…..

Deutsche estimates breakeven cost of $1,430psf NLA for office on 80% efficiency implying NPI yield of 4-4.5% based on S$6.50-7.00psf gross rents. Assuming avg retail rents of $14psf, implied yield for retail based on est. breakeven of $2,420psf is 4.9%. Given the relatively tight margins, expect minimal near-term NAV accretion…..

CS maintains Neutral for CMA with $2.59 TP, while JP Morgan do not expect the project to affect mkt’s view of all three entities meaningfully.

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