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Stock in Focus SG (GLP, SingHaiyi, Halcyon Agri) – 10/09/13
GLP Leases 22,000sqm To 2 Industry-Leading Manufacturers In China
Global Logistic Properties (GLP) has signed lease agreements totalling 22,000 square meters (sqm) to two industry-leading manufacturers in China. Tontec, a leading manufacturer of high-precision molds, has leased 11,000 sqm at GLP Park CDHT situated in 2 Chengdu Development High-Tech Zone, in Chengdu, Midwestern China. API Group has also pre-leased 11,000 sqm at GLP Park Suzhou Industrial, Eastern China. Located at the center of Suzhou Industrial Park, GLP Park Suzhou Industrial is connected to the main consumption centers of Shanghai and Suzhou through a convenient and highly efficient transportation network. API has been a customer of GLP since 2004.
Significance: The increasing lease agreements would strengthen GLP’s market share in China as well as its earnings for FY13. With a number of assets reaching full occupancy rate, GLP expresses confidence in its expansion in China, given its state-of-the-art facilities and top quality service in advanced industrial zones with exceptional transportation infrastructures.
SingHaiyi Expands Its Investment Activities By Acquiring A Major Shopping Mall In US
In view of its approach to expand its real estate investment activities beyond Singapore, SingHaiyi Group has announced its decision to acquire a 65 percent stake in a major shopping mall located in Cincinnati, Ohio, United States. The deal will see SingHaiyi deposit US$29.3 million to American Pacific International Capital, a corporation owned by controlling shareholders of SingHaiyi, as deposit for the purchase. The mall named Tri-County Mall, is a two-storey mall with 1,261,500 gross square feet of retail space and consists of three major departmental stores such as Macy’s, Dillard’s and Sears. The mall offers a capitalisation rate of 11 percent per annum and has a current occupancy rate of approximately 84 percent (excluding Macy’s). SingHaiyi non-executive chairman, Neil Bush has mentioned that the mall has a net book value of US$194 million therefore SingHaiyi’s proposed 65 percent stake at US$29.3 million is priced at a huge discount. The target acquisition marks the company’s maiden venture into the US property market, extending its investment activities offshore.
Significance: A successful acquisition will mark SingHaiyi’s very first deal under their diversification strategy. With the high occupancy rate and the gradual recovery of the US economy, the deal is likely to generate immediate revenues. Discussions are also underway by SingHaiyi to obtain more tenants.
Halcyon Agri To Acquire Malaysia’s JFL Agro For RM131m
Halcyon Agri Corporation announced that it has entered into a term sheet with Forlenza Investments, Jewel Castle and Laveyne for the acquisition of the entire issued and paid-up share capital of JFL Agro, including its wholly owned subsidiaries. JFL’s principal asset is a 99-year leasehold commencing 1 December 2011 of over 24,327.3 acres of Sultanate land in the state of Kelantan, Malaysia, as well as related property, plant, vehicles, equipment, and machinery. The purchase consideration is estimated to be RM131 million, arrived at after arm’s length negotiations on a “willing seller – willing buyer” basis, and taking into consideration, the estimated cultivable acreage of 16,061.9 acres and non-cultivable acreage of 8,265.4 acres of the concession. The proposed acquisition is subject to the finalisation of detailed terms and purchase consideration may be adjusted based upon the land survey determination of cultivable land within the concession.
Significance: The proposed acquisition represents a major strategic advancement of the Halcyon’s business into the upstream segment of the Malaysian natural rubber supply chain and would complement its recent acquisition of Chip Lam Seng’s natural rubber processing factories in Malaysia. The development of the concession into a natural rubber plantation would also be in line with its commitment to sustainability.
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