Fortune Reit Looking To Acquire 2 HK Assets
Fortune Real Estate Investment Trust (Fortune Reit) is eyeing two retail properties in Hong Kong for a HK$1.9 billion ($319 million) acquisition. Independent financial adviser CIMB has backed the proposed deals, saying that they are fair and reasonable, and in the interests of Fortune Reit and its unitholders. The proposed acquisition will value the Belvedere Garden Property at Tsuen Wan at HK$1.25 billion and the Provident Centre Property at North Point at HK$650 million. If successful, the acquisition would increase the gross rentable area of Fortune Reit’s retail portfolio by 23% to 2.4 million square feet. Fortune Reit will need unitholders’ approval to proceed with the proposal as the deals involve interested parties. Cheung Kong’s aggregate indirect interest in the Reit is 31.3% and Cheung Kong also owns around 49.9% of Hutchison Whampoa. Both entities have interests in the two assets and will thus abstain from voting.
Significance: Fortune Reit believes that the proposed acquisition will be yield accretive. The two properties generated a net property income yield of 4.2% in FY10 – higher than the yield of 3.9% from Fortune Reit’s existing 14 properties.
Yoma’s Shares Jump Amidst Dull Trade
Mainboard-listed Yoma Strategic Holdings’ (Yoma) share price shot up about 30% over the past week, drawing a query from the Singapore Exchange before reaching a three-year closing high at the end of trading on 29 December. In a filing on 29 December, Yoma said it did not know of any information that could affect its share price. But it noted that there have been several queries about its business in Myanmar following recent political and economic reforms in that country. Yoma took in all of its $13.2 million of revenue for 1H11 from its activities in Myanmar. The company is involved in at least four residential and one golf course projects in the country. Expectations of greater institutional participation may also have been raised after Yoma hired former banker Andrew Jonathan Rickards as chief executive.
Significance: Observers see great upside to Myanmar, citing the country’s wealth of resources, population and history. This makes Yoma attractive because the counter is a very liquid way to gain exposure to the country. Notably, Yoma is also trading at a discount to its book value.
Keppel Ends The Year With $150m Contract Win
Keppel Offshore & Marine, a wholly owned subsidiary of Keppel Corporation (Keppel), wrapped up the year on a high with new contracts worth $150 million, boosting the year’s new orders to a peak of $10 billion. The contracts were secured through subsidiaries Keppel Singmarine and Keppel Verolme. Keppel Singmarine entered into contracts with a Papua New Guinea customer Ok Tedi Mining, for the construction of a 91-metre container vessel and three 4,000 deadweight tonnage bulk ore/fuel carriers. Meanwhile, Keppel Verolme, Keppel’s comprehensive shipyard in the Netherlands, will undertake upgrading activities of a semisubmersible drilling rig, Scarabeo 6, for Italian customer Saipem Misr for Petroleum Services. Keppel Verolme will also construct a new storage area for risers, and new sponsons and blisters will be installed to accommodate the new winches.
Significance: While the latest contracts are not expected to affect the current year’s financial performance, progressive recognition of contract completion is expected to boost performance in the future.