Maybank Research positive on Battersea sale to PNB, EPF


The company said in a statement that Elsa marks the launch of the Sime Darby Property Affordable Collection which include high-rise and landed properties priced below RM500,000, located within the Klang Valley

KUALA LUMPUR: Maybank Kim Eng Research is positive on Sime Darby Property and SP Setia’s proposed sale of their 40% stakes each in Battersea Power Station (BPS) phase 2 (BPS2) commercial spaces to Permodalan Nasional Bhd (PNB) and the Employees Provident Fund (EPF).

It said on Friday the potential sale proceeds from the sale of the power station building, estimated at 1.6bil pound sterling (RM8.8bil) -- 643mil pounds for Sime Property’s 40% stake) -- could be re-deployed to develop the remaining phases of the BPS project. 

“We maintain our earnings forecasts and RM1.58 realised net asset value (RNAV) target price (on an unchanged 0.55 times P/RNAV peg),” it said.  

On Thursday, Sime Property’s 40%-owned joint venture company, Battersea Phase 2 HoldCo, had entered into an outline heads of terms with PNB and EPF. 

Under the proposal, they parties would egotiate the terms of a potential sale, on completion of the commercial spaces under the BPS2 project, to PNB and EPF. 

The purchase price is subject to a due diligence exercise and will be paid in stages throughout the balance of the construction phase of The Power Station building. 

The purchase price shall be based on an agreed stabilised net property income,  capitalisation rate and/or such calculation that is to be mutually agreed. 

“We are positive on this deal as the sale proceeds could be re-deployed to develop the remaining phases (3 to 7) of the BPS project till e.2028. 

“This would help to lessen the capex burden for Battersea Phase 2 HoldCo amidst the Brexit uncertainty which could slow down the development pace of the BPS project,” it said. 

Maybank Research said construction of the Power Station building will be completed in late 2020. It comprises 25% residential (with 250 units of luxury apartments; of which 90% has been sold), 25% office space (which has been pre-let to Apple) and the remaining will be retail and leisure.   
 
“Assuming a pretax margin of 20%-25% as guided previously, we estimate profit from the sale to be RM584mil based on Sime Darby’s 40% stake in the project. 

“This profit would only be reflected in FY21 upon completion of The Power Station building. Next would be the definitive and binding agreements for the sale. Our RNAV estimate is unchanged at RM2.88 a share,” it said.
Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Battersea Power Station

   

Next In Business News

Palm oil retreats on profit taking
Pfizer boosts forecast for vaccine sales to US$33.5bil
McDonald's sales surge on BTS meal craze, new crispy chicken sandwich
Singapore central bank removes caps on dividend payments by local banks
Mercury bags RM450mil construction job in Johor Baru�
Glomac registers RM28.3mil profit in FY21
KLCI ekes out slight gains, Petronas stocks, Tenaga advance
AstraZeneca second dose doesn't raise risk of rare blood clots
Barclays pays out more than US$1bln to investors as profits rebound
LSH Capital posts 1H earnings jump ahead of LEAP listing

Stories You'll Enjoy


Vouchers