Maybank Kim Eng Research, Nov 20
CMA (CapitaMalls Asia) is acquiring its first mall in Guangzhou. The partially completed mall is valued at 2.2 billion yuan (S$450 million), and CMA targets to open in phases beginning December 2014. The vendor is Greenland Real Estate. We see this as an attractive acquisition and in line with CMA's strategy to build scale in regions it is already present in. Reiterate "buy". Our S$2.56 TP is pegged to a 10 per cent discount to RNAV (revalued net asset value). The property is an eight-storey mall which is part of an integrated development comprising a strata-titled office and retail elements. With a GFA (gross floor area) of 86,000 square metres, the mall is valued at 25,581 yuan per square metre on a bare-shell basis. Including fit-out, CMA estimates the total investment cost at 2.65 billion yuan (30,767 yuan psm GFA). We think this is a fairly reasonable price given that Greenland sold the strata-titled mall at an average of 35,000 psm yuan GFA some two years ago. CMA will also not have to bear development risks.
BUY
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