CapitaMalls Asia Buys Tokyo’s Olinas Mall
CapitaMalls Asia announced that it has acquired Olinas Mall in Tokyo for 22.8 billion yen ($367.3 million) from Tiger Eye Realty Yugen Kaisha, managed by Invesco Global Real Estate Asia Pacific. The mall is attractively priced at about $964 (HK$5,848) per square feet of net lettable area. Notably, Olinas Mall is one of the biggest and newest malls in vibrant Kinshicho in eastern Tokyo and is located near two train stations. Lim Beng Chee, chief executive officer of CapitaMalls Asia noted that the Kinshicho area is a growing commercial area that attracts an influx of tourists, young families and youths, which generates demand for shopping over and above the current catchment of over 1.2 million people within a 5km radius. With the recent opening of the Tokyo Skytree, it is expected to draw more tourists and locals to the area. Separately, CapitaMalls Asia also announced that it will be developing its first shopping mall in Qingdao, China.
Significance: Olinas Mall’s current net property income is in excess of 6 percent, and CapitaMalls Asia is optimistic on its potential to be further enhanced through tenancy remix and pro-active mall management.
Singapore Exchange Reports A 23.2% Fall In 4Q12 Earnings
For the quarter ended 30 June, Singapore Exchange (SGX) turned in a 1.8 percent fall in revenue to $157.8 million while earnings fell 23.2 percent to $61.1 million. For the full year, revenue dipped 2 percent to $647.9 million and earnings dropped 1.1 percent to $291.8 million as the securities trading slumped 15.5 percent to $244.1 million, affected by the macroeconomic conditions. New listings also slowed as market conditions kept many potential deals on the sidelines. However, its bottomline included a $1.1 million impairment loss on Chi-East, a joint-venture dark pool operator that was shut down in May, and $11 million impairment on SGX’s investment in Bombay Stock Exchange that reflected the prolonged depreciation of the Indian rupee against the Singapore dollar. SGX has proposed a final dividend of $0.15 per share, leaving total dividend unchanged at $0.27 per share. This represents a 99 percent payout of the reported profit in FY12. Going forward, SGX will focus on organic growth such as dual currency trading and promoting retail participation in the securities markets.
Significance: Maybank Kim Eng, which had a “Buy” rating on SGX, noted that SGX’s results were decent, especially in the context of the current market, and pointed out that even with trading volumes at a cyclical low, SGX still has a 4 percent dividend yield.
Ascendas Hospitality Trust Closed Flat On Its Debut
Ascendas Hospitality Trust closed unchanged from its initial public offering price (IPO) of $0.88 on its first day of trading on the mainboard of the SGX on 27 July, and traded between a high of $0.895 and a low of $0.87, despite being amongst the highest traded stocks, with 61.2 million units changing hands. The public tranche of its IPO, comprising 70.1 million stapled securities, was about 6.9 times subscribed. Ascendas Hospitality’s initial portfolio includes 10 hotels worth $1.1 billion in Australia, China and Japan. About 75 percent of the assets will be in the business trust at the date of listing, with 25 percent in the real estate investment trust (REIT). This structure gives the trust more flexibility to develop property. $634.5 million of the IPO’s gross proceeds was used to pay for the acquisition of its properties as well as issue and debt-related costs.
Significance: Analysts note that the lacklustre debut was expected given that the counter is a business trust as investors would buy the trust for its yield rather than for capital appreciation.