Ho Bee

Ho Bee: The Metropolis, Ho Bee’s one-north office devt, is just moths away from completion. The 1.1m sf Grade A building is expected to receive TOP for the first tower in Jul, and for the second tower in Sep. To date, the devt has a 60% tenant pre-commitment rate for its total lettable area, secured by MNCs such as P&G, Shell, NOL and SGX. Ho bee has also engaged gym operator Fitness First, and F&B outlets such as Starbucks, Simply Bread and Peach Garden. The group is shifting its own HQ to the new building as well. Mgt expects to have full occupancy by next yr. One factor in its favor is the building’s low devt cost of $800m. Ho Bee stated an avg px of $6-7 psf for office leases and $8-15 psf for retail. Mgt Mgt expects Metropolis to pull in around $80m in annual income by 2015, underpinned by growing popularity of the one-north district. In comparison, Ho Bee reported net profit of $183m in FY12. Ho Bee added it is not ruling out launching a REIT in the next two years, which would comprise its commercial properties, including The Metropolis. Given the positive share price response of SPH and OUE shares after announcing their REIT plans, Ho Bee shares could benefit from similar sentiment improvement. The stock trades at 7.1x P/E, 0.7x P/B.