Earnings was up 41% y-o-y, mainly led by additional units sold at The Trizon.
Here's from CIMB:
1Q12 earnings are slightly above at 26%/29% of consensus and our FY12 estimates on stronger sales at The Trizon but weaker 2Q/3Q12 hotel revenue on Hotel Pan Pacific’s closure. Maintain estimates (2Q/3Q to be less strong), Outperform and target price (45% disc to RNAV).
1Q12 earnings boosted by The Trizon
1Q12 revenue was up 41% yoy, mainly led by additional units sold at The Trizon and higher sales recognition. Based on URA data, take-up was 84%. Completion is expected in May 12.
FY12 should be supported by The Trizon and the recognition of presales at Archipelago (50% JV with UOL) as construction progresses. Estimated take-up at Archipelago was 47% at end-Mar 12, with 93 units sold from the 100 units launched in March.
Management expects the mass market to stay stable. FY12 hotel revenue (1Q12: +4% yoy) will be set back by the closure of Pan Pacific Hotel from April to early Aug 12.
Negative reversions tapering off
Negative rental reversions continued to taper off, as gross rental income from investment properties dipped only 1% yoy (FY11: -4% yoy). While management continues to expect pressure on offices, we take comfort in the >95% occupancy for its office assets and stable office rents thus far.
Around 70% of the 244 units have been reserved, with 130 units secured by sure-buyers.
According to a report from Maybank Kim Eng, UOL recently launched Katong Regency, the residential component of its mixed development on the site of the former Lion City Hotel. Approximately 70% of the 244 units have been booked, with around 130 units confirmed sold at an ASP of SGD1,475 to 1,727 psf.
The 244-unit freehold Katong Regency sits atop ONE KM Mall, which has a net lettable area of 210,000 sq ft. Its integration with a mall is a strong selling point, with eventual ASP estimated at SGD1,600 psf. The project is also expected to tap on the growth potential of Paya Lebar Central, a designated regional commercial hub. The breakeven for the residential component is estimated to be SGD1,145 psf, which would translate to a healthy pre- tax margin of 40%.
Riding on the sustained demand for mass market projects, UOL’s 544-unit Archipelago at Bedok Reservoir has enjoyed a pick- up in sales momentum after a relatively slow start. In 1Q12, the group sold 168 units at an ASP of around SGD1,100 psf on an estimated breakeven of SGD900 psf. As of end-March, 77% of the 350 units launched have been sold.
UOL’s latest acquisition is the SGD172m en-bloc purchase of St Patrick’s Garden off East Coast Road. Land cost for the freehold site works out to an attractive SGD817 psf ppr for UOL and the eventual breakeven is estimated at SGD1,265 psf. With units at Grand Duchess at St Patrick’s next door transacting at an average of SGD1,350 psf in the secondary market, UOL could be eyeing a launch price of SGD1,500 psf for its new project
Private sector transactions should take a backseat until 3Q12 when macroeconomic concerns are less pronounced.
In a new sales and investment report, Savills Singapore said that investment transactions in 1Q12 registered just S$3.98 billion, or 48.4% lower from the previous quarter's S$7.72 billion. This weaker performance that should carry over to 2Q12 with the exception of surging GLS tenders.
Here's more from Savills Singapore:
The investment sales market is expected to remain quiet in the near term as caution reigns amid macroeconomic uncertainties. In addition, although there is ample liquidity and demand in the market, there remains a mismatch between the expectations of buyers and sellers. The next quarter is likely to be dominated by sales from the GLS Programme. Should concerns over the macro-economy begin to fade and the ‘bid-ask’ gap narrows, the second half of 2012 could see a resurgence of transactions in the private sector.
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