CapitaLand (CAPL) announced yesterday that it has secured a contract to manage a serviced residence in Manila, Philippines. We note this is the sixth contract acquired over the last month by its serviced residence unit, the Ascott Ltd (Ascott). We note Ascott has been actively expanding its presence (an impressive 13% CAGR of units owned/managed since 2000) and is the world’s largest international owner-operator with 31,770 units in 78 cities as at end 1Q13. We see this continued growth extending its competitive edge in terms of scale and branding and, with about S$0.9b of assets under development (on an effective stake basis), it enjoys a good pipeline for capital recycling ahead. We continue to favor CAPL for its diversified real estate portfolio across asset classes, its strong balance sheet and management focus on improving shareholder ROE. Maintain BUY with an unchanged fair value estimate of S$4.29 (20% discount to RNAV).
Secures eight management contract in Philippines
CapitaLand (CAPL) announced yesterday that it has secured a contract to manage a serviced residence in Alabang, a major business district in Metro Manila, Philippines. The 150-unit Somerset Alabang Manila is expected to open in 2017 and will be The Ascott Ltd’s (Ascott) eighth property in the Philippines.
Rapidly expanding serviced residence presence
Over the last month, we note the Ascott Limited secured two management contracts in Wuxi, China (the 134-unit Ascott Central Wuxi and 169-unit Somerset Wuxi), one contract in Riyadh, Saudi Arabia (the 230-unit Ascott Olaya Riyadh) and two in Jeddah, Saudi Arabia (the 166-unit Citadines Tahlia Jeddah and 136-unit Citadines Al Salamah Jeddah). This carries on a track record of robust growth for CAPL’s serviced residence business where the number of owned/managed units has grown at a CAGR of 13% since 2000; Ascott is now the world’s largest international serviced residence owner-operator with 31,770 units in 78 cities as at end 1Q13. Over 1Q13, overall portfolio REVPAU remained stable at S$109, with China, Europe and the Gulf region and India up 4%, 2% and 2% YoY, respectively.
Pipeline for growing Ascott REIT
We see the continued growth of CAPL’s serviced residence business extending its competitive edge in terms of scale and branding. With about S$0.9b of assets under development (on an effective stake basis), Ascott enjoys a good pipeline for capital recycling and growing the Ascott REIT ahead. The group recently divested three Chinese properties and 11 Japan properties to the Reit with a gain of S$15m and the transaction is expected to complete in 2Q13.
Maintain BUY
We continue to favor CAPL for its diversified real estate portfolio across asset classes, its strong balance sheet and renewed management focus on improving shareholder ROE. Maintain BUY with an unchanged fair value estimate of S$4.29 (20% discount to RNAV).
CapitaLand (CAPL) announced yesterday that it has secured a contract to manage a serviced residence in Alabang, a major business district in Metro Manila, Philippines. The 150-unit Somerset Alabang Manila is expected to open in 2017 and will be The Ascott Ltd’s (Ascott) eighth property in the Philippines.
Rapidly expanding serviced residence presence
Over the last month, we note the Ascott Limited secured two management contracts in Wuxi, China (the 134-unit Ascott Central Wuxi and 169-unit Somerset Wuxi), one contract in Riyadh, Saudi Arabia (the 230-unit Ascott Olaya Riyadh) and two in Jeddah, Saudi Arabia (the 166-unit Citadines Tahlia Jeddah and 136-unit Citadines Al Salamah Jeddah). This carries on a track record of robust growth for CAPL’s serviced residence business where the number of owned/managed units has grown at a CAGR of 13% since 2000; Ascott is now the world’s largest international serviced residence owner-operator with 31,770 units in 78 cities as at end 1Q13. Over 1Q13, overall portfolio REVPAU remained stable at S$109, with China, Europe and the Gulf region and India up 4%, 2% and 2% YoY, respectively.
Pipeline for growing Ascott REIT
We see the continued growth of CAPL’s serviced residence business extending its competitive edge in terms of scale and branding. With about S$0.9b of assets under development (on an effective stake basis), Ascott enjoys a good pipeline for capital recycling and growing the Ascott REIT ahead. The group recently divested three Chinese properties and 11 Japan properties to the Reit with a gain of S$15m and the transaction is expected to complete in 2Q13.
Maintain BUY
We continue to favor CAPL for its diversified real estate portfolio across asset classes, its strong balance sheet and renewed management focus on improving shareholder ROE. Maintain BUY with an unchanged fair value estimate of S$4.29 (20% discount to RNAV).
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