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Singapore Daily Bulletin – 20/11/12

Yoma To Develop Landmark Yangon Development
Yoma Strategic Holdings is planning to develop a landmark mixed-use development in Yangon. This came after the Myanmar property developer entered into a sale and purchase agreement with Serge Pun & Associates to acquire rights to participate in the development of approximately 10 arces of land in downtown Yangon through the acquisition of 80 percent stake in Meeyahta International Hotel. The consideration of the acquisition is $81.3 million, while total costs of land development is estimated to range from $330 million to 350 million. To fund the deal, the group has proposed one for four rights issue of up to 241 million new shares as well as a private placement of up to 192.9 million new shares.

Significance: The deal cements Yoma’s position as a leading property developer in Myanmar. Given improved macro conditions in the newly opened-up country, high-grade commercial space such as those in the planned development will see increasing demand.

MLT Adds Wuxi Logistics Park Into Portfolio
Mapletree Logistics Trust (MLT) has inked a memorandum of understanding with its sponsor, Mapletree Investments, to acquire Mapletree Wuxi Logistics Park in China for Rmb116 million. This represents the third property acquired from the sponsor’s development pipeline, and would increase its portfolio to 111 properties with a book value of approximately $4.2 billion. On the target, it has a gross floor area of 45,000 square meters and has a strong tenant base of reputable local and international companies with typical lease terms ranging from two to three years.

Significance: The purchase consideration is at a Rmb3 million discount to the average of two independent valuations. Furthermore, the target’s expected initial net property income yield of 8 percent is higher than the implied yield of 6 percent of MLT’s existing China portfolio.

SembMarine’s Unit Firms Up US$295.2m Order
Sembcorp Marine subsidiary Jurong Shipyard has firmed up a US$295.2 million rig order from Oslo-listed Prosafe. A letter of intent for the rig was inked earlier in October, and now the unit would build a harsh-environment accommodation semi-submersible that is similar to the Safe Boreas ordered in December 2011. Also, two additional options were granted to Prosafe and increased the total number of options to three units of accommodation semi-submersible newbuilds. The latest ordered rig will be delivered no later than end-December 2014; the deal brings the unit’s total secured orders to $9.48 billion in 2012.

Significance: OCBC Investment noted that SembMarine’s order win to date accounts for 99.7 per cent of its projected win target. The house remains confident of the group’s operational capabilities and opines that its established track record places in good position to secure orders from a still buoyant industry.