CDLHT has announced the proposed acquisition of Angsana Velavaru in the Maldives from Banyan Tree (BT) for a total cost of US$72.4m. BT will lease back the property for 10 years and the rent payment will be GOP less management fees per annum, subject to a minimum rent and reserve of US$6m. Based on the pro forma annualised NPI for 9MCY12 of US$6.8m (after deducting outgoings of US$1.0m), as a percentage of the purchase price of US$71.0m, the NPI yield is 9.6%, versus the implied NPI yield of 6.0% for the existing portfolio. The transaction is subject to approval from a Maldivian ministry, which is likely to take over two weeks. Gearing post-acquisition will still be healthy at ~29%. Assuming the transaction is completed on 1 Feb, we raise our FV from S$1.91 to S$1.93 and maintain our HOLD rating on CDLHT.
Proposed acquisition from Banyan Tree
CDLHT has announced the proposed acquisition of Angsana Velavaru in the Maldives from Banyan Tree (BT) for a total cost of US$72.4m. The property is valued at US$72.5m. BT will lease back the property for 10 years and the rent payment will be GOP less management fees per annum, subject to a minimum rent and reserve of US$6m. Based on the pro forma annualised NPI for 9MCY12 of US$6.8m (after deducting outgoings of US$1.0m), as a percentage of the purchase price of US$71.0m, the NPI yield is 9.6%, versus the implied NPI yield of 6.0% for the existing portfolio. Management intends to fund the transaction fully in USD through the multicurrency MTN programme since the earnings are largely USD-based. This is CDLHT's first tie-up with BT.
Further build-up possible
The resort, set on its own island, is ~140km from Malé International Airport and is 40 minutes away by seaplane. There are 79 beach villas and 34 ocean villas positioned 1km away from the main island. In Apr 2012, Maldives increased the allowable built-up area for tourist facilities as a percentage of total land area from 20% to 30%, thus presenting expansion opportunities. F&B accounts for 25-30% of gross revenues, and GOP margin is in the high-40s.
Growth from China outbound tourism
Chinese nationals accounted for a quarter of visitor arrivals to the Maldives for YTD Nov 2012, up 15% YoY. Russians are also another important source of guests for Angsana Velavaru. The future recovery of the European market will be an additional positive. Dec-Apr are the peak months for tourism in the Maldives, and May-Jun are the weakest months. Maldives is one of the highest RevPAR markets in the world; Angsana Velavaru's 9MCY12 RevPAR was US$279.
Maintain HOLD
The transaction is subject to approval from a Maldivian ministry, which is likely to take over two weeks. Gearing post-acquisition will still be healthy at ~29%. Assuming the transaction is completed on 1 Feb, we raise our FV from S$1.91 to S$1.93 and maintain our HOLD rating on CDLHT.
CDLHT has announced the proposed acquisition of Angsana Velavaru in the Maldives from Banyan Tree (BT) for a total cost of US$72.4m. The property is valued at US$72.5m. BT will lease back the property for 10 years and the rent payment will be GOP less management fees per annum, subject to a minimum rent and reserve of US$6m. Based on the pro forma annualised NPI for 9MCY12 of US$6.8m (after deducting outgoings of US$1.0m), as a percentage of the purchase price of US$71.0m, the NPI yield is 9.6%, versus the implied NPI yield of 6.0% for the existing portfolio. Management intends to fund the transaction fully in USD through the multicurrency MTN programme since the earnings are largely USD-based. This is CDLHT's first tie-up with BT.
Further build-up possible
The resort, set on its own island, is ~140km from Malé International Airport and is 40 minutes away by seaplane. There are 79 beach villas and 34 ocean villas positioned 1km away from the main island. In Apr 2012, Maldives increased the allowable built-up area for tourist facilities as a percentage of total land area from 20% to 30%, thus presenting expansion opportunities. F&B accounts for 25-30% of gross revenues, and GOP margin is in the high-40s.
Growth from China outbound tourism
Chinese nationals accounted for a quarter of visitor arrivals to the Maldives for YTD Nov 2012, up 15% YoY. Russians are also another important source of guests for Angsana Velavaru. The future recovery of the European market will be an additional positive. Dec-Apr are the peak months for tourism in the Maldives, and May-Jun are the weakest months. Maldives is one of the highest RevPAR markets in the world; Angsana Velavaru's 9MCY12 RevPAR was US$279.
Maintain HOLD
The transaction is subject to approval from a Maldivian ministry, which is likely to take over two weeks. Gearing post-acquisition will still be healthy at ~29%. Assuming the transaction is completed on 1 Feb, we raise our FV from S$1.91 to S$1.93 and maintain our HOLD rating on CDLHT.
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