Company Name: CAPITALAND LIMITED
| Research House: Barclays | Price Call: BUY | Target Price: 3.91 |
GPT’s offer for Australand’s non-residential assets is positive for CapitaLand, Barclays says. “It could unlock value and signal a strategic change for CapitaLand.”
It notes Australia has been one of CapitaLand’s three core markets after Singapore and China, with the Singapore company owning 59.3% of ALZ, which makes up 15% of CapitaLand’s assets.
With the offer details, including price, still uncertain, the house keeps unchanged its RNAV of $4.59, based on ALZ’s September market valuation at 0.83x P/B. “We expect any offer to be at least book value. Realisation of ALZ’s value at 1X P/B would raise CapitaLand’s RNAV by 1.3% to $4.65 on our estimates.”
Barclays adds, it expects CapitaLand’s Singapore residential portfolio could re-rate as inventory finally starts to move, with its D’Leedon project selling 120 units in November, bringing takeup to 40%.
“With all cylinders firing, CapitaLand remains our top pick in the sector into 2013.” It rates the stock Overweight with $3.91 target. The stock is up 1.1% at $3.73.
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