SINGAPORE (Jan 17): RHB is in favour of CapitaLand’s divestment of the remaining 45 units in the The Nassim for a total of S$411.6 million (RM1.29 billion).
“We view the transaction positively as it should help CapitaLand offload some of its high-end inventory in Singapore amidst challenging market conditions,” says analyst Vijay Natarajan on Tuesday.
CapitaLand will reap a net gain of S$161 million after completion of the transaction.
More importantly, CapitaLand will avoid paying Qualifying Certificate (QC) penalties of about S$55.8 million over next three years, assuming none of the remaining units were sold), says Natarajan.
The Nassim is a freehold low-rise 55-unit luxurious condominium located on the former ANA hotel site, at Nassim Hill (District 10).
The buyer is Kheng Leong Company (Private) Limited, the private real estate arm of Mr Wee Cho Yaw, who is the chairman emeritus of United Overseas Bank.
The transaction implies a price of S$2,300 psf for sellable area, which is at 18% discount to average transaction price (S$2,846 psf) for the initial 10 units.
Natarajan also expects proceeds from this proposed sale are expected to be redeployed into earnings accretive acquisitions across its core markets, with expectations of generating higher ROEs.
RHB currently has a “Neutral” recommendation on CapitaLand with a target price of S$3.15. — theedgemarkets.com.sg