Roxy-Pacific Holdings - DBS Research 2018-05-08: Hip Hip Hooray!

Roxy-Pacific Holdings - DBS Vickers 2018-05-08: Hip Hip Hooray! ROXY-PACIFIC HOLDINGS LIMITED SGX: E8Z

Roxy-Pacific Holdings - Hip Hip Hooray!

  • Roxy-Pacific enters into a non-binding Heads of Agreement to divest its 50%-owned commercial building on Clarence St, Sydney for A$153m (28% premium to latest valuation).
  • Estimated exit yield to be below current yield of c.4%.
  • Harbourview is more than 90% sold while The Navian is more than 70% sold.
  • A small- to mid-cap gem among the property developers. Maintain BUY, Target Price S$0.63.



What’s New

  • Roxy Pacific has entered into a non-binding Heads of Agreement to divest its 50%-owned commercial building on Clarence St, Sydney for A$153m (~S$153m), at a 28% premium to its latest valuation as at February 2018 to an Australian-domiciled institutional investor. The divestment is subject to a due diligence exercise and obtaining the necessary board approvals. No estimated completion timeline was given.
  • The building was acquired only a little more than two years ago for A$81m. We estimate the exit yield to be below the current yield of approximately 4%. 
  • We believe this is positive for Roxy Pacific as a testament to its successful investment and asset recycling strategy while it continues to record strong sales from its Singapore residential projects. Roxy has sold more than 90% of its latest launched project in April 2018, Harbourview Gardens at an average of S$1,760psf. The Navian has sold more than 70% to date. The next expected launch is the development on Grange Road.
  • We remain positive on Roxy as a small- to mid-cap gem among the property developers, a niche proxy to the Singapore property market. 
  • Maintain BUY rating, Target Price of S$0.63.





Rachel TAN DBS Vickers | Derek TAN DBS Vickers | https://www.dbsvickers.com/ 2018-05-08
SGX Stock Analyst Report BUY Maintain BUY 0.63 Down 0.690



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