BIGGER apartments at GuocoLand' s upcoming Midtown Modern condominium will target owner-occupiers from a buyer pool wider than typically seen in Singapore' s central area.

 

This goes towards the property developer' s long-term aspiration of creating a " very vibrant community" within its mega Guoco Midtown integrated development, said GuocoLand Singapore group managing director Cheng Hsing Yao.

 

Besides one- and two-bedroom units, the 99-year leasehold Midtown Modern will have a " significant" number of three- and four-bedroom units and two penthouses, he said in an interview with The Business Times (BT).

 

These could appeal particularly to families with children, and other owner-occupiers such as retirees and affluent individuals or households.

 

Such a wide product range is " a bit of a departure from most CBD (central business district) residential projects" , which tend to garner strong investment demand and are thus mostly made up of one- to two-bedders that can be rented out to CBD workers, Mr Cheng noted.

 

The Singapore government has been looking at increasing the live-in population within the central area, and to achieve that, " you really have to attract the families" , he added.

 

Another target buyer group would be retirees who are downsizing from landed homes and want to live in the city centre with easy access to food, shopping and amenities. Healthcare and medical services are a stone' s throw away, too: Raffles Hospital is within walking distance of Midtown Modern.

 

Meanwhile, the smaller units will continue to appeal to investors, singles and young couples, Mr Cheng told BT.

 

" Our orientation is towards very strong owner-occupation," he said. GuocoLand is also aiming to attract long-term property investors, rather than buyers looking to maximise value in the short term.

 

Midtown Modern will comprise two 30-storey towers with 558 units and a retail podium almost half or 249 of the residential units are three or four-bedroom apartments.

 

The one-bedders are about 409-474 square feet (sq ft) each the two-bedroom units are 592-721 sq ft the three-bedders are 904-1,066 sq ft the four-bedroom units are 1,432-1,464 sq ft while the four-bedroom " premium" apartments are 1,733-1,808 sq ft each. Larger households may opt to buy two four-bedroom " premium" units and combine them into a duplex multi-generational family home.

 

The four-bedroom penthouse spans 3,272 sq ft and the five-bedroom penthouse, 3,520 sq ft.

 

Prices start from S$1.1 million or about S$2,400 per square foot (psf) for a one-bedroom apartment, and go up to nearly S$15 million or over S$4,200 psf for the bigger penthouse.

 

The luxury residential project will launch on March 20, 2021 and is expected to be completed in 2024.

 

Beyond the unit sizes, its one hectare (ha) of green spaces, full condo facilities - a 50-metre pool, tennis court, hot spring and large clubhouse - and direct access to the Bugis MRT interchange are other features that may appeal to a wider variety of buyers. Such amenities are not commonly seen in the CBD because sites there tend to be smaller.

 

A major selling point is the fact that the condominium is part of a multi-billion-dollar mixed-use project.

 

Guoco Midtown is the company' s second flagship development, spanning 3.2 ha of prime land on Beach Road and Tan Quee Lan Street. To be completed in phases between 2022 and 2024, it comprises a 30-storey office tower with 770,000 sq ft of Grade A office space, a five-storey Network Hub, three retail clusters, public spaces, a collection of 30 thematic gardens, and two condominiums - Midtown Modern and the earlier launched Midtown Bay.

 

The 33-storey, 219-unit Midtown Bay, launched in October 2019, was designed as " business homes" or home offices and thus aimed at entrepreneurs and employees working from home. Over 70 apartments or one-third of the units there have been sold to date, at an average transaction price of close to S$3,000 psf, GuocoLand told BT. The highest psf price attained at Midtown Bay was S$3,882.

 

Meanwhile, the office tower, slated for completion in H2 2022, will feature a flexible leasing scheme and aim for a diverse tenant base, including large corporates and " some of the most dynamic companies in Singapore" , Mr Cheng said.

 

" So there will be creatives and talented people in the offices, be it from the tech sector, trading firms or multinational corporations (MNCs) an entrepreneur-type ecosystem in Midtown Bay and families and singles in Midtown Modern, all intermingling," he noted.

 

" Imagine a family with kids in secondary school or junior college, rubbing shoulders with ' techpreneurs' or MNC staff, for example&hellip That will form a very exciting mix."

 

As to why the family aspect is important, he pointed out that GuocoLand will be holding Guoco Midtown' s offices and retail components as long-term investment assets, thus the company has an interest in ensuring its product positioning for the residential portion " attracts the kind of community that will add to the right mix" for the overall integrated development. This is unlike a typical residential-only site, whereby developers exit after selling the units.

 

" When we build developments, we' re very interested in the people occupying them," Mr Cheng told BT.

 

In creating the swathes of greenery in the mega project, GuocoLand thus went above and beyond the requirements in the tender guidelines, in part to improve the work environment and well-being of commercial tenants, residents and the public.

 

The 3.8 ha of thematic gardens and landscaped spaces spread across Guoco Midtown will be home to over 350 species of trees and flora. " When we planned the green spaces, we didn' t see them as ornamental. We paid a lot of attention to biodiversity and also included a storytelling, heritage element in selecting the plant species," Mr Cheng said.

 

A third of the gardens in Guoco Midtown will be publicly accessible. There will also be three key public spaces one of them is Midtown Common, located below Midtown Modern featuring more than 20,000 sq ft of retail area.

 

Although such public spaces require more investment, they may benefit GuocoLand' s commercial tenants by bringing in more foot traffic, Mr Cheng said, citing the popular landscaped Urban Park at Guoco Tower as an example.

 

" It' s not necessarily a zero-sum game. When the private sector takes a broader perspective and contributes more to the bigger picture, it can be good for business as well... Everybody will be better off."

 

GUOCOLAND' s half-year net profit has more than halved year on year to S$22.9 million, thanks to higher tax expenses on its project in Shanghai, China.

 

On Thursday, Guocoland reported that its net profit fell 69 per cent from S$74.5 million for the six months ended Dec 31, 2020. Topline dropped 44 per cent to S$319.6 million, from S$572.1 million a year ago.

 

Earnings per share was at 1.20 Singapore cents, versus 5.86 cents a year ago.

 

Guocoland noted that the drop in its net profit was mainly due to higher tax expense of S$31.9 million in the first half of FY2021, from related taxes for the disposal of the cultural building within its Guoco Changfeng City project in Shanghai.

 

Higher tax expenses were partially offset by a 58 per cent increase in other income to S$25.2 million, partly due to the fair-value gain on derivative financial instruments and the completion of the disposal of the cultural building within the same project, it said.

 

Meanwhile, the fall in revenue was mainly attributed to lower progressive recognition of sales from its Singapore residential projects - specifically as construction of the luxury condominium Martin Modern reaches its tail end, said Guocoland. It is expected to achieve its temporary occupation permit in 2021.

 

As at Dec 31, its residential developments in Singapore - Martin Modern, Meyer Mansion and Midtown Bay - had sold 90 per cent, 24 per cent and 26 per cent of their units respectively. Separately, Guocoland noted that Wallich Residence is 63 per cent sold and continues to register sales with prices remaining firm.

 

While revenue from the group' s investment properties remain stable when compared against the preceding corresponding period, revenue from the hotel business fell by 75 per cent, following " adverse impacts" on demand for travel and hotel accommodation due to the Covid-19 pandemic, it said.

 

Gross profit fell 47 per cent to S$95.0 million, and gross profit margin for the group remained at approximately 30 per cent.

 

Meanwhile, the group' s other income rose 58 per cent to S$25.2 million, up from S$16.0 million a year ago, partly on the back of the fair-value gain on derivative financial instruments for the period, the group said. In the previous corresponding period, this was a fair-value loss which explains the drop in the other expenses by 93 per cent to S$1.1 million in the current period.

 

Contributing to the increase in other income was also the completion of the disposal of the Changfeng cultural building in Shanghai for a consideration of 610 million yuan, it added.

 

Raymond Choong, GuocoLand' s group president and chief executive, said: " Despite the headwinds, we remain in a strong position to deploy our balance sheet towards strategic land acquisition opportunities."

 

He added that GuocoLand will continue to leverage its real estate expertise to develop properties that support future work and lifestyle trends, while building its portfolio of recurring income for sustainable growth.

 

The group' s investment properties continued to contribute to its recurrent income, it said.

 

Guoco Tower registered committed occupancies of 91 per cent for its office component and 99 per cent for its retail component as at Dec 31. Occupancy of 20 Collyer Quay stood at 95 per cent.

 

As at Dec 31, GuocoLand had a net debt of S$4.2 billion and gearing of 1x. Cash and cash equivalents increased by 7 per cent to S$998.3 million.

 

Equity attributable to ordinary equity holders as at Dec 31 stood at S$3.82 billion, while net asset value per share was S$3.44.

 

  DBS initiates coverage on Straits Trading with ' buy' , sees value unlocking from ARA listing

 

DBS Group Research has initiated coverage on mainboard-listed conglomerate Straits Trading Company with a " buy" recommendation and a S$3.50 target price.

 

This represents a 50 per cent upside from the counter' s Feb 3 close of S$2.33.

 

Straits Trading shares were trading at S$2.50 before the midday break on Thursday, up S$0.17 or 7.3 per cent. The stock continued its upward trajectory in afternoon trade, surging S$0.38 or some 16.3 per cent to S$2.71 as at 3.27pm.    

 

" We see compelling value in the company, trading at just 0.6 time price to net asset value, and an even steeper discount to its realisable value," wrote DBS analysts Chung Wei Le and Derek Tan in a research note on Thursday.

 

Among other things, the analysts believe that there is " significant value to be extracted" upon the potential listing of ARA Asset Management (ARA) this year or next.

 

ARA' s group chief executive officer and co-founder John Lim announced in September 2019 that the Warburg Pincus-backed real estate fund manager is exploring a dual listing that would include Singapore.

 

" We see deep value in (Straits Trading' s) investments and believe the market is applying a huge discount due to its complex corporate structure," DBS said.

 

Straits Trading has a 22.1 per cent stake in ARA. It also owns 89.5 per cent of property investment vehicle Straits Real Estate (SRE), a 30 per cent stake in Far East Hospitality Holdings, a 10 per cent deemed interest in Suntec Real Estate Investment Trust, and a 54.8 per cent interest in Malaysia Smelting Corporation.

 

DBS labelled the ARA investment as Straits Trading' s " crown jewel" , adding that investors are currently getting the asset " for free" . " We expect (Straits Trading) to trade at a higher premium to its past valuation multiples as ARA' s listing becomes imminent," the analysts said.

 

They estimate ARA' s current valuation to be S$3.8 billion and Straits Trading' s stake in ARA to be worth S$2.06 per share.

 

In addition, Straits Trading' s core real estate business has been churning out stable recurring cash flows, DBS noted.

 

It added that SRE has been a key growth engine for Straits Trading, increasing its assets under management (AUM) at a compound annual growth rate of 33.9 per cent from S$358 million in FY14 to S$1.78 billion in H1 2020. The growth in AUM came from SRE&rsquo s investments, mainly in Australia and Japan, DBS said. 

 

Despite the Covid-19 pandemic impacting Straits Trading' s other businesses, SRE' s portfolio was the most resilient within the group, contributing 81 per cent of its earnings before interest, taxes, depreciation and amortisation in H1 2020, the analysts noted. 

 

" We estimate SRE' s portfolio initial yield to be about 6.5 per cent, and on high-quality, diversified assets. Its assets are diversified across six geographies (Australia, China, Japan, Malaysia, South Korea and the UK) and four sectors (retail, residential, office and logistics)," Mr Chung and Mr Tan said. 

 

They added that Straits Trading remains on track to grow its assets under management to S$2.4 billion by 2022.

 

Between Nov 12 and 13, GuocoLand Assets Pte Ltd acquired 25,000 shares of GuocoLand for a consideration of S$36,900 at an average price of S$1.48 per share.

 

Preceding acquisitions also saw GuocoLand Assets Pte Ltd acquire 55,000 shares at S$1.47 per share between Nov 5 and 9 and 83,000 shares at S$1.46 per share between Oct 29 and Nov 4.

 

The acquisitions have brought GuocoLand non-independent non-executive director Quek Leng Chan' s total interest in the listed company to 71.97 per cent.

 

Mr Quek is also the chairman and CEO of Hong Leong Company (Malaysia) Berhad and has extensive business experience in various business sectors, including financial services, manufacturing and real estate.

 

Between Nov 12 and 13, GuocoLand Assets Pte Ltd acquired 25,000 shares of GuocoLand for a consideration of S$36,900 at an average price of S$1.48 per share.

 

Preceding acquisitions also saw GuocoLand Assets Pte Ltd acquire 55,000 shares at S$1.47 per share between Nov 5 and 9 and 83,000 shares at S$1.46 per share between Oct 29 and Nov 4.

 

The acquisitions have brought GuocoLand non-independent non-executive director Quek Leng Chan' s total interest in the listed company to 71.97 per cent.

 

Mr Quek is also the chairman and CEO of Hong Leong Company (Malaysia) Berhad and has extensive business experience in various business sectors, including financial services, manufacturing and real estate.

GuocoLand

 

Between Nov 5 and 9, GuocoLand Assets Pte Ltd acquired 55,000 shares of GuocoLand for a consideration of S$80,725 at an average price of S$1.47 per share.

 

Preceding acquisitions saw GuocoLand Assets Pte Ltd acquire 83,000 shares at S$1.46 per share between Oct 29 and Nov 4 and 115,000 shares at S$1.56 per share between Oct 15 and 22.

 

The acquisitions have brought GuocoLand non-independent non-executive director Quek Leng Chan' s total interest in the listed company to 71.96 per cent.

 

Mr Quek is also the chairman and chief executive officer of Hong Leong Company (Malaysia) Berhad and has extensive business experience in various business sectors, including financial services, manufacturing and real estate.

 

Between Oct 29 and Nov 4, GuocoLand Assets Pte Ltd acquired 83,000 shares of GuocoLand for a consideration of S$121,514 at an average price of S$1.46 per share.

 

These transactions have taken GuocoLand non-independent non-executive director Quek Leng Chan' s total interest in the listed company to 71.96 per cent.

 

Preceding acquisitions saw GuocoLand Assets Pte Ltd acquire 115,000 shares at S$1.56 per share between Oct 15 and 22.

 

Mr Quek is also the chairman and CEO of Hong Leong Company (Malaysia) Berhad and has extensive business experience in various business sectors, including financial services, manufacturing and real estate.

 

On Oct 22, GuocoLand Assets Pte Ltd acquired 20,000 shares of GuocoLand for a consideration of S$31,400 at an average price of S$1.57 per share, following on from the acquisition of 95,000 shares for a consideration at S$1.56 per share between Oct 15 and 21.

 

These transactions have taken GuocoLand non-independent non-executive director Quek Leng Chan' s total interest in the listed company to 71.95 per cent.

 

Mr Quek is also the chairman and CEO of Hong Leong Company (Malaysia) Berhad and has extensive business experience in various business sectors, including financial services, manufacturing and real estate.

 

Between Sept 30 and Oct 7, GuocoLand non-independent non-executive director Quek Leng Chan increased his deemed interest in the listed company by 114,400 shares.

 

GuocoLand Assets Pte Ltd acquired the shares at a consideration of S$173,348 at S$1.52 per share.

 

His preceding acquisitions were between Aug 27 and 28 with 63,100 shares acquired at S$1.45 per share.

 

Mr Quek maintains a 71.94 per cent total interest in GuocoLand.

 

He is also the chairman and CEO of Hong Leong Company (Malaysia) Berhad and he has extensive business experience in various business sectors, including financial services, manufacturing and real estate.