Keppel Land: Increasing China exposure.
Announced that it has secured a 21.5-ha lakefront residential site in Wuxi, China for Rmb1.937b ($368m) or Rmb5,999 psm GFA for the development of around 2,500 residential units and commercial space. Grp is not new to city and is currently developing township project.
Site is last available for development in vicinity and is situated within Binhu District in a high-end residential precinct which encompasses a national wetland park and Li Lake. Proposed dev will comprise low density homes such as villas, terraces, duplexes and mid-rise units of 1-4 bedroom units. First phase expected to be launched in early 2013.
With acquisition, KepLand's China residential pipeline increases further to 43,860 homes. Deutsche estimates a breakeven cost in region of Rmb11,000 psm, implying gross margin of around 20% based on ASP of Rmb14,000psm, resulting in 4c/shr accretion to NAV (+1%). Deutsche maintains Buy with $5.30 TP.
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