Welcome to this week’s edition of top stock market highlights.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, announced the acquisition of six multifamily assets in Osaka, Japan, for S$141.4 million.
The assets will be parked in its regional core-plus fund, CapitaLand Open End Real Estate Fund (COREF), and this transaction marks the maiden entry for COREF into this sector.
These assets are well-located, being close to nearby subway stations, and comprise 428 premium one-bedroom apartments with well-designed interiors.
These properties are targeted at corporate tenants and middle-income couples and will be completed in phases from May 2023 to June 2024.
Osaka City will host the World Expo 2025 and is also a major contender for Japan’s first integrated resort, which is slated to open by 2030.
CLI’s lodging arm, CapitaLand Ascott Trust (SGX: HMN) had also acquired three multifamily properties in Japan which will be completed between this quarter and 2024.
With these three and including the six acquired in this announcement, CLI will own a total of 30 such properties across eight cities in Japan.
Such assets are attractive because they have historically performed well even during downturns.
For instance, during the COVID-19 pandemic, these multifamily properties demonstrated rental growth and occupancy rates stayed above 95%.
Singtel (SGX: Z74)
Singtel’s Indonesian associate, Telkomsel (IDX: TLKM), will merge with the broadband unit of Telkom.
Telkom is the parent company of both Telkomsel and the broadband unit.
Telkomsel will pay for this merger by issuing more shares, thus diluting Singtel’s stake from the current 35% to 29.6%.
However, Singtel will cough up S$236 million to increase its stake in the combined entity to 30.1%.
This payment values the new entity at around IDR 58.3 trillion, or around S$5.1 billion.
Singtel’s CEO Yuen Kuan Moon is positive about the deal as it will allow Telkomsel to tap into the lucrative and fast-growing broadband market.
Higher network utilisation and systems convergence may also translate into meaningful cost savings for Singtel’s associates, thus translating to better numbers for its bottom line.
This deal is slated for completion in the early part of the third quarter of 2023.
SATS Ltd (SGX: S58)
SATS and Mitsui (TYO: 8031), a Japanese company in the field of worldwide logistics and distribution, announced a multi-year memorandum of understanding (MoU).
The MoU involves both parties forming a strategic alliance to harness each company’s strengths to grow their respective businesses.
On SATS’s part, it will tap into Mitsui’s extensive distribution network to increase demand for its myriad products and services.
The aim is to also help the food caterer to diversify its supply chain to enable it to become more resilient.
Mitsui, on the other hand, will harness SATS’ culinary, food production, innovation and production capabilities to provide value-add to its customers.
SATS has been on an aggressive growth path since announcing its S$1.64 billion acquisition of Worldwide Flight Services back in September 2022.
The ground handler has enjoyed a strong recovery as air travel demand remains strong amid a resurgence in holiday and business travel.
Its fiscal 2023’s third-quarter operating update saw both passenger and air cargo volumes surging.
This MoU is for an initial three-year period and is renewable for successive two-year extensions.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
