CapitaLand Limited - Phillip Securities 2017-04-03: Period of reckoning when efforts bear fruits

CAPITALAND LIMITED C31.SI

CapitaLand Limited - Period of reckoning when efforts bear fruits

Investment Merits

Period of reckoning when efforts start to bear fruit

In 2017, a record one million square metres of retail GFA is set to be opened, which will be CapitaLand (CAPL)’s largest ever retail GFA offering in a single year. Close to 90% of this record offering in 2017 will be in China.

The new total retail GFA due to open in 2017 represents c.10% of CAPL’s total global retail exposure (including Integrated developments, IDs). In particular, the total new retail GFA in China represents a significant c.13% of the total retail GFA (including IDs) CAPL has built up in China over two decades since its entry in 1994.

Majority of launches in CY17 are in Chinese cities currently facing undersupply; Recent tightening of capital controls could lead Chinese homebuyers to turn inwards despite cooling measures

CAPL China plans to launch 8,430 units for sale in CY17 across 11 cities in China. Out of these 11 cities, eight of them have been facing at least a mild undersupply condition in the past six months since September 2016.
The recent tightening of capital controls which surmounted the difficulties of Mainland Chinese to purchase overseas properties could lead them to turn towards domestic markets despite the recent implementation of cooling measures across Chinese cities.

Tapping on key competitive advantage to evolve into Asset Light Model for more sustainable future growth

CAPL’s new asset light management contract model for retail acts as a kicker for ROE, allows CAPL to expand network and brand visibility without huge capital expenditure, and paves the way for future acquisition as they take on management contract roles for third party malls with a right of first refusal.
A similar contract management model adopted by Ascott also allows it to scale up rapidly, and achieve its target of managing 80,000 units by 2020, a CAGR of 16% from 2017-2020.
We are optimistic that the Group is able to accelerate management contract wins given its ongoing success on shopping mall management.

Initiating coverage with “ACCUMULATE” rating and target price of S$4.19

We initiate coverage on CAPL with an ACCUMULATE rating as the Group’s expansion into China progressively start to bear fruits.
Applying a 20% discount to our FY17 full-year RNAV estimates, which is consistent with the 7-year average post GFC discount to book, and a discount our house views as appropriate for big cap developers, we arrive at a target price of S$4.19.

Company Background

Move towards recurring income and expanding presence in China

Singapore and China account for 80% of CAPL’s total assets. As a result of a strategic shift towards recurring income, 76% of total assets now belong to the investment properties category, contributing to recurring income and smoothing out the lumpiness in earnings from the trading properties segment (24%).
Singapore and China now make up two of the largest markets for the Group.

Singapore Residential: Well executed with minimal extension charges risk except for Victoria Park Villas

Structural and regulatory challenges in the Singapore market have led to CAPL adopting a cautious approach to Singapore residential development projects. Restrictive property cooling measures since 2010, together with the government adopting a more cautious approach to population growth since the 2010s which curtailed demand, resulted in Singapore’s property price index dropping c.11% from its peak in 3Q2013 to 4Q2016.
The 2013 Population White Paper has projected for workforce growth rates at 1-2% per annum for the rest of this decade and about 1% p.a. until 2030. This contrast starkly with the average of 2.8% in the 1990s and 2.5% in the 2000s. As a result of the slowing population growth, we do not expect the record home sales volume witnessed in the 3 years post GFC from 2010-2012 to be sustainable or repeated. We expect earnings for CAPL in the next 5 years to be driven heavily by investments in China, with Vietnam also playing an increasingly important role in the portfolio.
CAPL’s Singapore inventory stock at S$1.7bn is c.4% of total assets. In 2016, CAPL sold 571 residential units with a total sale value of S$1.42bn. With dwindling inventory and a thinning land bank (which includes only a 19,330sqm site at Yio Chu Kang acquired in 1999), we expect CAPL’s sales value for Singapore residential properties to taper off in the next two years. Government residential land sales has also been moderating since 2012 to reach c.4.4mn square feet in 2016, a 75% decrease from the peak in 2012. We do not expect government land sales to rebound strongly over the next few years so as to allow the market to absorb the increased supply these few years which has resulted in rising vacancy rates. 2Q2016 vacancy rate of 8.9% is the highest since 2000.
Hence, CAPL is likely to reduce exposure to Singapore residential sector as a proportion of total portfolio as the Group continues to deploy funds into higher growth markets like China, and Vietnam. We note however, that the recently announced plans by the government to adopt the Master Developer approach to revamp Kampong Bugis, could present opportunities for CAPL given the scale of the project and the track record CAPL has in developing big scale projects such as integrated developments and townships.

Catalyst: Not much catalyst to come from Singapore Residential but downside risks minimal.

Possible catalyst could also come from involvement in the redevelopment of Kampong Bugis site announced by the government on 8 March 2017 Excluding the projects which are substantially sold (> 95%), CAPL face ABSD/QC extension charges for Cairnhill Nine, Victoria Park Villas and Marine Blue.
Given the positive sales momentum for Cairnhill Nine and Marine Blue, we expect CAPL to be able to clear unsold inventory by September 2017 and October 2018 respectively before the ABSD/QC charges set in. However, we expect sales for Victoria Park Villas though to remain slow given the large selling price quantum of each semi-detached house (>S$4mn) and the restrictions against foreigners from buying landed property in mainland Singapore. CAPL has sold 20 out of 109 units since July 2016. ABSD charges of c.S$46mn for Victoria Park Villas, due June 2018, would constitute 5.5% of FY16 operating PATMI.
Although we are of the view that the latest capital control measures by the Chinese government may dampen Chinese appetite for overseas property investments, this dampening of Chinese appetite for overseas property would not affect Victoria Park Villas as foreigners would not have been allowed to buy in the first place. The extension charges for Victoria Park Villas work out to be about S$131/psf of the remaining unsold units, or 6% of the average selling price so far. We would not be surprised if CAPL decides to drop the price by this amount or more going forward in view of the slow sales momentum.
On current inventory, we expect local demand to sustain for smaller quantum units (Low S$1m range) on back of affordability and still low interest rates. Our channel check suggests foreigner enquiries are rising for higher end properties. This would likely benefit sales for the remaining units of Marine Blue.

Singapore Malls: Operating performance has stayed weak due to negative retail sales since 2012

General retail malls have endured a difficult environment of late. Net absorption of shop space in 2016 hit -45,000sqm, the second consecutive year of a negative net absorption of shop space. General island wide occupancy has also been trending down since hitting 96% in 2013 to 91% in 2016. The lacklustre performance of retail malls can be attributed primarily to the flat to negative retail sales since 2012.
In terms of supply, the main upcoming retail supply for 2017 includes the Singapore Post Centre and retail component of Marina One (The Heart). The rest of the supply consists of a mixed-use developments and projects such as Vision Exchange, Royal Square at Novena, DUO Galleria, and Farrer Square. Although we expect retail sales this year to clock an improvement over last year, we expect rental reversions to continue to face pressure due to peak rents signed in the 2004/2005 period due for renewal.
Despite short term challenges in the retail scene, CAPL has a good network of malls which are strategically located at important transportation hubs across the island. Last week, CAPL signed its first third party mall management contract in Singapore for the retail mall at the new SingPost Centre, which will open 2H17.
Apart from capitalising from the central locations of the malls, CAPL has also been quick to embrace digital strategies to improve the experience for tenants and shoppers as new shoppers look for fresher shopping experiences in the wake of the numerous options provided through e-commerce.

Catalyst: Digital strategies in malls, Opening of Jewel, Changi Airport and Funan in 2019

Faced with the challenges of e-commerce, CAPL has embarked on a series of digital strategies to reinvent itself and appeal to retailers and shoppers alike.
- Firstly, operational efficiency is being enhanced through the harnessing of technology to streamline processes such as the In-Mall Distribution pilot at Tampines Mall and Bedok which reduced queueing times for delivery trucks by close to 70% to an average seven minutes. Apart from benefitting retailers, this also eases road congestion around the malls resulting in a better experience for shoppers who drive into the malls.
- In 2015 and 2016, CAPL also piloted an “Order online and Pick up later” service called “Food to Go”, for F&B outlets in Raffles City and Star Vista, helping retailers bridge the online-to-offline (O2O) gap, especially in challenging times as such where retailers are facing increasing costs and lacklustre retail sales.
- As the biggest scale mall owner/operator in Singapore, this also gives CAPL sufficient leverage and scope to carry out projects with economies of scale. Singapore’s first onsite centralised dishwashing facility opened in IMM (owned by CapitaLand) in 2015.
- Built as part of a collaboration between CapitaLand and various government agencies including SPRING Singapore which provided 70% of funding, such facilities allow F&B outlets to enhance productivity of labour and shop space.
These initiatives combined allow CAPL to build on their scale of malls to roll out measures to improve the overall experience of tenants and shoppers in the new age technologydriven shopping scene.
The opening of Jewel Changi Airport and Funan in 2019 provides a catalyst for CAPL not only in earnings but also a platform for CAPL to showcase the reinvention and creative concepts the developer could possible bring to future projects.
- Incorporating a high level of technological sophistication, the redeveloped Funan will integrate lifestyle and technology into the everyday shopping experience. Innovative features such as hands free shopping service, a drive-through click–and-collect, high tech food court with tray return robots and food collection conveyor belts, smart car parking are all part of the “futuristic” mall.
- Jewel at Changi Airport which is slated to open by 2019, will boast a gross floor area of about 134,000 sqm, making it one of the largest shopping mall in Singapore after Vivocity. Jewel is poised to benefit from the increase in passenger capacity and traffic at Changi with the opening of Terminal 4 in 2017 and Terminal 5 by c.2025. Terminal 5 in particular will increase passenger capacity of the airport by c.60% to c.140mn passengers.

Singapore Office Sector: Demand in improve in 2017 but Rents to bottom only in 2018

Net office demand saw its fifth consecutive year of contraction in 2016, culminating in net office demand of 26,000 sqm. in 2016. Nonetheless, the limited supply over these few years meant that occupancy stayed relative flat at 90%.
Downsizing and relocation of operations overseas by banks, the traditional major occupiers of CBD space, contributed to the declining net demand, notwithstanding increased demand by sectors such as Technology.
Broad structural developments in recent years could also affect the potential demand of office space in Singapore. Singapore’s shift away from a liberal immigration policy which will inevitably lead to slower workforce population growth, increasing trends of decentralization away from city centre to ease the city congestion through setting up of suburban commercial hubs, technological advancements allowing people to work from home, and broader government calls encouraging employers to allow flexible work arrangement schemes, such as allowing employees to work from home initiative to encourage increased participation for labour force all serve to slow down the demand growth for city centre office space.
We think net office demand could have seen a bottom in 2016 and would likely pick up in 2017 on the back of stabilising and gradually improving economic conditions especially in US and Europe. The huge supply in 2017 though could force rents to see a bottom only in 2018. We therefore expect occupancy and office rents to bottom only in 2018.
CAPL’s exposure to office space in Singapore, held under its 32% owned REIT CapitaLand Commercial Trust (CCT), will see 6% and 15% of leases expiring (by monthly gross rental income) in 2017 and 2018 respectively. We therefore expect to see negative reversions especially in 2018 for Six Battery Road and One George Street, though the impact will be negligible on the CAPL portfolio level.

Catalyst: The redevelopment of Golden Shoe Car Park which is expected to yield 1mn sq ft of office space upon completion in 2021.

This represents c.25% of the 4mn sq ft of Singapore office space that CAPL holds under CCT.

Ascott: Scaling up with an asset light model

In 2016, Ascott secured c.10,500 units in 49 properties, the highest increase in inventory count in a single year. These additions are expected to contribute S$25-S$30mn of fee income annually once stabilised, a c.20% to the S$149.3mn fee income generated by operational units in FY16.

New Management Contract model for retail malls a “Triple-Win”. Ascott also adopting similar strategy

In August 2016, CAPL signed their first management contract to manage the retail component of Fortune Finance Center in Changsha, Hunan, China. This marks the beginning of CAPL’s enhanced asset-light strategy for its mall business, to complement its core strategy of developing, owning and managing malls.
In January and March this year, CAPL signed on a few two mall management contracts in Xi’an and for the new SingPost Centre mall in Paya Lebar. We are optimistic on the new asset-light strategy and thinks it achieves a “Triple-Win” for CAPL.

Asset light model that improves ROE

The typical property development business is a capital intensive model which by nature of the capital intensive nature and long duration of projects is a drag on the ROE of the business. By slowly evolving into an asset-light model through asset management contracts for retail malls and hotels, this provides a strong kicker to ROE due to efficient flow through of fees with minimum capital outlay.

Allows CAPL to expand Network and brand visibility without huge capital expenditure

Expanded scale and network of malls allows for economies of scale. With an enlarged number of malls that will now grow even faster with a management contract model, CAPL can benefit from the scale and network effect to boost their leasing efforts with an expanded mall and retailer network and enhance the effectiveness of the shopper loyalty programme across different CAPL malls.
Managing quality third party malls where CAPL has a right of first refusal to acquire paves way for future acquisition This allows CAPL to tap on its core expertise in mall management in maximizing the value of the mall. For desirable malls in strategic locations, CAPL will also have the option to acquire with the right of first refusal.

Vietnam Residential

Vietnam: The new factory of the East

Vietnam clocked an average GDP growth of 6% per annum over the last decade. GDP growth in 2016 was 6.2% which ranks amongst one of the fastest growing economies in the world. According to Prime Minister Nguyen Xuan Phuc, the government targets a 6.5-7% growth from now until 2020. Driven by an export market which remained resilient to a global trade slowdown, manufacturing activities in Vietnam remained strong as foreign investments continued to stream in attracted by the country’s young population and lower wages than those in China.
CAPL sold a total 1,480 units in FY16 with a total sales value of S$282mn, 19% that of Singapore ($1.4bn) and c.8% that of China’s (S$3.62bn). In January this year, CAPL acquired a prime commercial site in the Central Business District of Ho Chi Minh to develop the Group’s first Grade A office tower in Vietnam.
We expect CAPL to continue its deployment of capital into the country due to its rapid economic expansion.

China Property

Development Rich pipeline of China residential units able to last till FY20; 8,430 units expected to be ready for launch in CY17

CapitaLand China plans to launch 8,430 China residential units (20% of total pipeline) in CY17 out of a total pipeline of 40,180 units in China. Out of these new units to be launched, 87% of them are from Tier one and two cities where these cities have registered solid growth in the past few years due to a declining supply and resilient demand.
Despite solid absorption of units under the Group’s portfolio, we are expecting the Group to adopt a cautious stance towards future land acquisitions in China amid near term uncertainties in the current market as the Chinese government signals their intentions to cool the property market.
Even if no new land acquisitions are made, we estimate that the existing pipeline of new units in China to last till FY20 with an average launch of 10,000 units annually.

8 out of 11 launches in CY17 are in Chinese cities currently facing undersupply; Expect near term demand to stay healthy despite cooling measures

CapitaLand China plans to launch 8,430 units for sale in CY17 across 11 cities in China. Out of these 11 cities, eight of them have been facing at least a mild undersupply condition in the past six months since September 2016. While the other three cities such as Shenyang could face near term pressures as a result of a near term oversupply, we view that impact is material but not significant considering the launches in these three cities represent c.20% of FY17’s gross development value (GDV) of RMB12.9 billion.
The implementation of property cooling measures in certain cities in China has led homebuyers to turn towards other cities that were not affected by these cooling measures. Consequently, Chongqing, Ningbo and Nanning are amongst other cities that have been registering rising demand, as inventory turnover of residential units have been gaining pace and leading to an undersupply in these cities.
We expect demand for the Group’s new unit launches in CY17 to stay healthy in the near term amid the undersupply conditions in the respective markets.

Recent tightening of capital controls could lead Chinese homebuyers to turn inwards to domestic markets; cities that are not affected by recent property cooling measures

China has been boosting efforts towards decelerating the RMB outflow which has led the country’s foreign reserves to hit a six-year low of US$3 trillion in March 2017. As part of its efforts to tighten capital controls, the Chinese Government has re-iterated its commitment to restrict individuals to make overseas property purchases. Between December 2016 and March 2017, the Chinese Government has stopped allowing foreign currency purchases at domestic banks to fund overseas property purchases, and Union Pay has intensified scrutiny by blocking payment of overseas property purchases. While we cannot rule out the possibilities of Mainland Chinese buyers to purchase an overseas property through other means, we anticipate more potential buyers to look inward and consider domestic property purchases thereby boosting demand for domestic properties.
We are expecting sales volume of developments in cities that are currently not affected by the recent property cooling measures to gain the most traction compared to other cities. We also observed that markets with an oversupply condition such as Xi’an and Shenyang have continued to register increasing demand despite a mild oversupply condition.
CapitaLand plans to launch a development each in these two cities with a combined GDV of RMB1.1 billion in CY17.

Sales value expected to decline 9% YoY to RMB16.5 billion as more township units are launched for sale; Expect more units to be released as markets continue to improve

We estimate that CapitaLand will sell c.9,433 units (assuming a 90% absorption rate on 8,730 units to be launched in CY17 with an estimated GDV of RMB12.9 billion, and a 50% absorption rate of 1,752 unsold units with a projected GDV of RMB8.2 billion), translating to a sales value of RMB16.5 billion in FY17. This sales value in FY17 represents a 10% YoY decline compared to FY16 of RMB18.1 billion and is primarily attributed to more township units (13.8 ppts more compared to FY16) which will be launched for sale in CY17.
Township units command a lower average selling price as they are classified as affordable housing. We view that the Group could release more units for sale in CY17 should the markets continue to improve.

China Shopping Malls

Portfolio of China shopping malls continue to deliver consistent performance in the past three years; Expect performance to continue

The Group’s China portfolio of shopping malls has been consistently delivering a solid set of performances in the past three years despite volatility in the Chinese economy as well as an ongoing restructuring of shopping malls in China. Same-mall shopper traffic and tenant sales has grown at an average of 3.7% and 9.8% in the past three years between FY14 and FY16.
We believe that the CapitaLand’s competitive strengths in being a strong mall operator has enabled its portfolio of shopping malls in China to deliver a strong set of performance year after year and we are expecting this trend to continue. Consequently, its portfolio of shopping malls in china has translated into a consistent occupancy rate in the 94% region, as well as an average same-mall NPI growth of 11.1% in the past three years.
We are of the view that the Group’s well-executed strategy by continuously rejuvenating its shopping malls to create a unique shopping experience are amongst reasons which explained the robust growth in shopper traffic. This came at a time where shopping malls are facing challenges such as an ongoing trend of falling shopper traffic and occupancy rates.

Eight new shopping malls to be opened in three countries which will add 10% to total retail GFA in CY17; With another nine to be completed progressively in 2018 and beyond

The Group intends to open a total of eight new shopping malls (three of which are retail components of the Raffles City integrated developments) in China, India and Malaysia in CY17. The move will add one million sqm (10%) to the Group’s total retail GFA (including properties under construction). The Group maintains an objective to open shopping malls with a pre-committed leasing rate of 80%.
We are expecting the performance of the new shopping malls in China to deliver strongly as pre-leasing in some of these properties came in as high as 90%. The six new shopping malls in China account for c.90% of the total retail GFA from shopping malls slated to be opened in CY17, and bring the Group’s portfolio of operating shopping malls to 95 from 87.
The Group plans to open another nine shopping malls in CY18 and beyond, with a grand total of 104 shopping malls in its portfolio eventually.

China and Singapore will continue to be key markets accounting for more than 85% of total retail GFA under shopping mall portfolio

Including the 17 new shopping mall assets which will be added across the five geographical markets and progressively be operational beginning in CY17, Singapore and China will continue to be the key markets for CapitaLand. Singapore and China shopping mall assets will yield a total of eight million retail GFA, representing more than 85% of the Group’s portfolio of shopping mall assets.

Shopping mall portfolio’s NPI yield on cost in China stayed at 7.2% in the past three years; Expect yield on cost to decline and return in the range of 6.7% to 6.9% as new malls take time to stabilise

In the past three years between FY14 and FY16, the Group’s NPI yield on cost of China shopping malls has stayed at 7.2% versus an average NPI yield on valuation of 5.5%, on a same-mall basis. The gap in the two yields are mainly driven by cap rate compressions, as valuations continue to grow.
In FY17, we are expecting a temporarily decline in NPI yield on cost as the six new shopping malls that are scheduled to be opened in CY17 will put a drag on yield on cost. We are attributing costs related to the opening of these new malls to be flushed into the operating costs of the shopping malls, resulting in both lower NPI and NPI margins.
We are estimating the six new shopping malls in China to return a NPI yield on cost of 2% to 3% for the next two years as these assets require time to stabilise in both occupancy rates and NPI margins. Additionally, we are estimating a NPI yield on cost on China shopping malls to return in the range of 6.7% to 6.9% in the next two years after including the six new shopping malls to be opened in China in CY17, and subsequently improve in FY19 after opening costs are totally flushed out.

Adopting an asset light strategy by expanding shopping mall network with two management contracts; Expect more management contracts to be secured

CapitaLand has signed two management contracts involving the planning, pre-opening and management of two shopping mall assets, namely Fortune Finance Centre in Changsha and a shopping mall in La Botanica, a township project in Xi’an, which are slated to be opened in 2018 and 2019 respectively. The two shopping mall assets will yield about 50,000 sqm of retail GFA when completed, which is insignificant when compared to a portfolio size of 6.7 million sqm of retail GFA, when all 66 shopping malls in the Group’s China portfolio are fully operational.
We are of the view that the incorporation of management contracts will boost the Group’s overall mall positioning, and is a testament of its competitive strength in mall management. Additionally, the adoption of management contracts will boost the Group’s expansion strategy in the number of malls under management while adopting an asset lighter strategy.
Consequently, we are confident that the Group will be able to secure more management contracts moving forward.

China Integrated Developments

Pipeline of Raffles City integrated developments provides capital recycling opportunities in the longer term which unlocks value for shareholders

CapitaLand China currently has four fully operating Raffles City integrated developments as at 4Q16. The Raffles City properties including those under construction consist of a mix of lettable space for retail, office, serviced residence use or strata-titled residential or office units.
With four more Raffles City integrated developments which are slated to be completed progressively and fully operational from CY17 to CY19, total lettable GFA will be boosted significantly to more than two million sqm from 0.6 million sqm. Additionally, the four completed Raffles City integrated developments will boost the value of CapitaLand China’s Raffles City portfolio to RMB42.1 billion from RMB18.9 billion.
The eventual result is a sizeable portfolio for potential capital recycling opportunities such as the listing of a new real estate investment trust (REIT), unlocking value for shareholders.

Two more land sites in land bank remaining for integrated development; Leveraging on own development expertise by forming strategic partnership and jointly developing sites

The Group currently has two more land sites (Liangcang Site, Ningbo and Capital Tower Shanghai) in its land bank which will be developed into integrated developments with a combined lettable GFA of 91,000 sqm. As land tender prices continue to rise across most cities in China, we opine that competition for land will intensify, resulting in higher development costs and reduces return on investments.
We are of the view that the management will leverage on its development expertise on integrated developments and increasingly tap on the land bank of other entities as opposed to participating in open land tenders.

Ascott China

Potential value to be unlocked through capital recycling via China serviced residence assets with a valuation of RMB5.8 billion

Including service residence units that were disposed into Ascott Residence Trust (ART), CapitaLand owns 2,925 serviced residence units across different cities in China via 16 standalone serviced residence assets.
Out of which, 1,048 of these units belong to six serviced residence assets with a combined valuation of RMB5.8 billion where they can potentially be disposed and acquired by ART, thereby unlocking value for the Group.

Fund Management Platform

Fund management platform has met 28% of AUM growth target in FY16; Management remains confident to grow AUM of up to S$10 billion by 2020

In FY15, CapitaLand has set out a growth target to grow asset under management (AUM) of up to S$10 billion by 2020.
In FY16, the Group has set up Raffles City China Investment Partners III (RCCIP III) with an AUM of US$1.5 billion (approximately S$2 billion) and a fund tenure of eight years. The fund’s investment objective is to invest in prime integrated developments in China. The Group has subscribed to a 41.7% stake in RCCIP III. Including the newly set up of RCCIP III, CapitaLand has met 28% (S$2.8 billion) of its AUM target in FY16.
By meeting its AUM growth target, the Group can potentially add c.$18.2 million in net profit after taxes (NPAT), representing 1.2% of S$1.5 billion NPAT in FY16.

Fund management platform continues to provide an engine for long term growth; AUM has grown 4.1% YoY to S$47.9 billion and adds S$0.37 to our RNAV estimates

As at December 2016, CapitaLand’s fund management platform consists of five REITs and 15 private equity funds where AUM has grown 4.1% YoY to S$47.9 billion. Based on the fund management fees of S$201.8 million (NPAT: S$121.1 million) earned in FY16, We have assumed an average PER of 13 for the Group’s fund management platform and derived a value of S$0.37 which is included into our RNAV estimates.
We estimate that for every S$1 billion increase in AUM, it will add S’cents 0.8 to our RNAV estimates.
We are optimistic that the Group’s proven track record and core strength in the development of different property assets will continue to attract investors, providing fuel for its fund management platform.

Peter Ng Phillip Securities | Dehong Tan Phillip Securities | Jeremy Ng Phillip Securities | http://www.poems.com.sg/ 2017-04-03

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