Category: AllCo
AllCo – BT
Three Allco Reit properties gain $121m in value
Their combined value rose 36.8% last year to $1.13b at end-December
ALLCO Commercial Real Estate Investment Trust (Allco Reit) said yesterday that the combined value of three of its property assets has jumped by $120.8 million or 12 per cent since the end of June last year, based on the latest revaluation.
The three properties are China Square Central and 55 Market Street in Singapore, and Central Park in Perth. Allco Reit owns the first two properties, and has a 50 per cent stake in the third.
This means that the total value of the trust’s stakes in the three properties rose 36.8 per cent or $302.8 million over the full year in 2007. Their combined value at the end of December was $1.13 billion.
The Singapore properties were valued by Savills and the Perth property was valued by CB Richard Ellis.
‘The most significant increases in this latest round of asset valuations were seen at China Square Central and 55 Market Street in Singapore,’ said Nicholas McGrath, chief executive of Allco Reit. ‘These assets increased in value by 17 per cent and 14 per cent respectively in only six months.’
China Square Central, 55 Market Street and Central Park have all achieved significant growth in value since end-June 2007, adding to earlier increases of 15 per cent, 43 per cent and 26 per cent respectively in the first six months of last year.
‘The continued improvements to Allco Reit’s underlying asset values are a direct reflection of (the trust’s) asset management strategy, combined with underlying market rental growth across the Singapore and Perth commercial property markets,’ Mr McGrath said.
Allco Reit’s share price closed 1.5 cents lower at 80.5 cents yesterday. The trust’s share price has fallen 10.1 per cent since the start of the year.
AllCo – BT
Allco cancels US$104m unit offer
SINGAPORE – Allco Commercial Real Estate Investment Trust, a property trust based on Singapore and Australian assets, said on Wednesday it has cancelled a planned preferential offering that would have raised up to $150 million (US$104 million) due to poor market conditions.
The trust said it was not proceeding with its plan, announced on Nov 16, to sell up to 175.2 million units to existing unitholders under a one-for-four preferential offer.
‘There is no pressing need for Allco Reit to be raising capital at this time,’ Nicholas McGrath, chief executive officer of Allco Reit’s manager, said in a statement.
Rising risk aversion has turned off investors from yield-driven property and asset trusts, sparking the cancellation of two major initial public offers in Singapore worth a combined US$800 million earlier this month.
An aircraft lease backed by a unit of General Electric and a real estate investment trust by Japanese developer Asia Pacific Land Group postponed their Singapore IPOs after a disastrous market debut by Saizen Reit, whose units fell 13 per cent on its Nov 2 debut. — REUTERS
Allco – CSFB
– ALLC has made seven acquisitions and tripled its portfolio value since listing. We believe that its increasing traction on acquisitions and diversification into new markets reflects management.s execution capabilities and flexibility to acquire in strategic markets. ALLC is also one of the most tax efficient REIT, allowing it to enjoy greater opportunities in target markets.
– ALLC is currently trading at a discount of 40.3% to NAV, which we believe is too steep and unjustified given its significant growth through acquisitions which has been overlooked.
AllCo – SGX
(1) APPROVAL IN-PRINCIPLE FOR THE LISTING OF NEW UNITS;
(2) A NON-RENOUNCEABLE PREFERENTIAL OFFERING OF UP TO 175,182,925 NEW UNITS; AND
(3) BOOKS CLOSURE DATE.
Some Extracts
The issue price of each New Unit pursuant to the Preferential Offering (“Issue Price”) will not be at more than a 10.0% discount to the weighted average price for trades done on the SGX-ST for the full market day on which the underwriting agreement is signed. If trading is not available for the full market day, the weighted average price will be based on the trades done on the preceding market day up to the time the underwriting agreement is signed
The Preferential Offering will comprise a non-renounceable preferential offering of up to 175,182,925 New Units on the basis of one New Unit for every four existing units (“Existing Units”) in Allco REIT held by Eligible Unitholders (as defined below) as at the Books Closure Date (as defined below), fractions of a Unit to be disregarded (“Preferential Offering”).
The last day and time of trading of the Existing Units on a “cum” basis will be 28 November 2007, 5:00 p.m.
The Manager expects that the New Units will be issued and traded on or about 28 December 2007.
Source : SGX
ALLCO – DBS
ALLCO, DBS remains a BUY with target price $1.65
– Gearing after Keypoint stands at 47%. Following the completion of Keypoint acquisition, Allco’s gearing will increase from 33% to approximately 47%, a level that potentially inhibits further acquisitions in the near term and Allco may seek funding from the equity markets for future acquisitions.
– Positive rental reversions. The demand for Singapore’s office and retail space within CBD continues to outstrip supply over the near future. Allco is poised to benefit from this demand squeeze.
– Attractive yield play. Allco continues to enjoy exposure to the booming Singapore property sector (54.1%), Australia (32.8%) and Japan (13.1%). At current price, Allco offers investors an attractive 6.3% yield with potential upside when rental reversions kick in (54% and 30%) over FY08 – FY09.
– Maintain BUY with TP S$1.65. We continue to like Allco and maintain our BUY call with TP S$1.65 based on DCF valuation. Compared to other S-REITS, Allco is currently trading at a 25% discount to NAV of S$1.36.