Welcome to the latest edition of top stock highlights where we feature interesting snippets from various companies and REITs.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, announced that it will dispose of all of its 85 strata lots (including two car parks) in Tanglin Shopping Centre (SC).
This disposal will be conducted by way of a public tender.
Tanglin SC is a freehold office cum shopping centre located along Tanglin Road, within the Orchard Road belt.
The total strata area to be sold is around 21,229 square metres and represents 60.2% of the total strata area of the building.
The buyer is privately-held real estate investor Pacific Eagle Real Estate, which made an offer of S$868 million for the property, close to 5% higher than the asking price of S$828 million.
The completion of this collective sale, however, could be delayed to 2023 due to uncertainty as to when all the conditions for the sale can be satisfied.
CDL is expected to realise a substantial gain on disposal as it has been holding this property since 1981.
This sale will allow the group to recycle and reallocate its capital, a goal that was mentioned when the property giant released its fiscal 2021 earnings last month.
Singtel (SGX: Z74)
Singapore’s largest telco has been busy in the last week, with three separate announcements concerning acquisitions and divestments.
First off, its wholly-owned subsidiary, Singapore Telecom International, has sold off a 1.6% stake in Airtel Africa for around S$150 million.
Airtel Africa is Africa’s second-largest telecom operator with a mobile customer base of more than 125 million across 14 countries.
The gain on divestment is around S$34 million and Singtel will continue to hold an effective stake of 21.7% in Airtel Africa.
Next, Singtel’s unit NCS announced the acquisition of digital services firm ARQ Group in Australia for A$290 million.
ARQ has expertise in cloud, digital, data and analytics solutions.
This is NCS’ fourth acquisition in Australia to transform the unit into a regional IT and digital services powerhouse.
ARQ’s team comprises 560 staff and will boost NCS’ headcount in Australia to 1,900, helping to build and grow its talent pool to support the digital transformation needs of its clients.
Finally, Singtel announced just yesterday that its wholly-owned subsidiary Australia Tower Network (ATN), along with AustralianSuper, will acquire Axicom for A$3.58 billion.
Axicom is one of Australia’s leading providers of communications tower infrastructure and owns 2,000 communication sites across eight territories and major cities in the country.
Singtel’s shareholding in both ATN and Axicom will be 18% as AustralianSuper owns a 70% stake in ATN.
The acquisition can help to scale up ATN’s operations and increase its customer base to provide more options and better communications for Australian consumers and businesses.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is partnering with CapitaLand Open End Real Estate Fund (COREF), a discretionary fund managed by CapitaLand Investment Limited (SGX: 9CI), on an acquisition.
Both parties will purchase 79 Robinson Road, a Grade A office building located in Tanjong Pagar, for S$1.26 billion.
CICT will own a 70% stake in the asset while COREF will hold the remaining 30%.
79 Robinson Road has a total net lettable area of close to 520,000 square feet and has a committed occupancy of 92.9%.
The property has a total of 22 tenants and a weighted average lease expiry of 5.8 years.
CICT is acquiring this property at a 4% net property income yield and the transaction will add 2.9% to the distribution per unit (DPU).
Fiscal 2021’s DPU will rise to S$0.1056 and CICT’s units provide a trailing distribution yield of around 4.7%.
The transaction should close by the second quarter of this year will be funded by a combination of debt and divestment proceeds from the sale of JCube. CICT’s aggregate leverage will be around 41% after completion.
CICT’s portfolio will grow to 26 properties worth S$24.2 billion after this acquisition, up from 24 properties worth S$22.9 billion as of 24 March 2022.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.