Friday, November 28, 2014
Sinarmas Land: Saw interest during the CLSA corporate access day, Sinarmas is the largest diversified Indonesian developer with a market cap of $1.8b and 8-9k hectares of landbank. Partnerships with HKL and AEON malls are gaining traction, with BSD City seeing strong demand for units at a hefty 85% profit margin due to the depressed land cost, with land all marked at historical costs on the books. Post election in Indonesia, interest in industrial land has hit a new high. Recently, Sinarmas Land sold 3 plots of land at ~US$155psm and targets to sell 100 ha per annum. In Singapore, there are plans to divest their 21% stake in Orchard Towers which is now valued at ~$200m. In the medium term, Sinarmas Land hopes to increase its recurring income portfolio predominantly in the prime office segment in Indonesia. With this current portfolio valued $700-800m, there are plans to unlock value through a REIT listing or sale to private funds when it crosses $1bn. SML may also venture more into China, citing the possible rise of distressed assets in the market, as well as Europe (excluding London).