There is a feeling that the good times may be back.
After enduring a punishing 2022 where a third of its value was lost, the NASDAQ Composite Index shot up 17.7% in the first quarter.
The bellwether S&P 500 Index, which lost nearly a fifth of its value last year, has risen by 7.5% within the same period.
Over in Singapore, the three local banks have also reported record sets of earnings, while blue-chip stocks such as Sembcorp Industries Ltd (SGX: U96) have announced a sharp jump in profits.
For this month, we are profiling three companies that announced recent business developments.
These stocks may have what it takes to ride the wave of optimism as the recovery takes hold.
APAC Realty (SGX: CLN)
APAC Realty is a real estate services provider which holds the ERA master franchise rights in 17 countries and territories in Asia Pacific.
The group is one of Singapore’s largest real estate agencies with more than 8,400 advisors as of 31 December 2022.
APAC Realty announced that it has entered into an ERA Master Franchise Agreement with ERA Laos Co. Ltd to expand into Laos.
The agreement allows ERA Laos exclusive rights to operate member broker offices in Laos and will last for an initial term of 25 years and may be renewed for another 25 years subject to conditions.
With the addition of Laos, the group now has a regional network of more than 21,900 agents in 647 offices across 11 countries and territories.
The Laos real estate market has good growth potential with China, its largest investor, investing US$2.5 billion in 2021.
In addition, the recently completed US$6 billion China-Laos Railway will also stimulate economic activity and raise the value of real estate within the country.
ERA Laos is starting with a headcount of 15 salespersons as of 21 March 2023 but has a target to grow its staff to 300 by the end of 2025.
APAC Realty now has a presence in four out of five countries within Indochina – Thailand, Cambodia, Vietnam, and Laos.
These economies show good promise with economic growth of between 3.1% to 6.2% in 2023.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a real estate giant with a network spanning 143 locations in 28 countries and regions.
The group has a portfolio comprising residential, commercial, and hospitality assets in Singapore and countries such as China and Australia.
Late last month, the blue-chip property group announced the acquisition of Sofitel Brisbane Central as part of its expansion into Australia.
CDL will tap on its wholly-owned subsidiary Millennium & Copthorne Hotels Limited in a 50:50 joint venture with New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) for the deal.
The property is a 5-star luxury hotel directly linked to the Central Station and the acquisition price is A$177.7 million.
The 30-storey hotel has 416 rooms and suites along with nine meeting and conference rooms that can accommodate up to 1,100 people.
This acquisition, however, is subject to various conditions such as approval from the Australian Foreign Investment Review Board, liquor licence transfer, and landlord’s consent.
If all goes well, completion should take place by the second half of this year and the hotel will continue to be managed by the Accor Group under its Sofitel brand.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, has a portfolio of 186 properties in eight countries with total assets under management of S$12.6 billion as of 31 December 2022.
The logistics REIT did not allow the high-interest rate environment to deter it from announcing a major acquisition, that of eight logistics assets in Japan, Australia, and South Korea totalling S$913.6 million.
The purchase price is a 4% discount from the properties’ independent valuation of S$972.7 million.
Concurrently, the manager is also in negotiations to potentially acquire two Chinese logistics assets for S$209.6 million and to divest a non-core Hong Kong property for S$100.3 million.
The acquisition will be funded via a combination of equity fundraising (S$200 million) and additional debt of S$746.8 million.
Unitholders will see an immediate benefit from this transaction – pro-forma distribution per unit for the first nine months of fiscal 2023 is expected to rise by 2.2% to S$0.06894.
MLT’s net asset value per unit will improve slightly by 0.6% to S$1.421 but its aggregate leverage will rise from 36.6% to 39.9%.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
