Welcome to this week’s edition of top stock market highlights.
Keppel REIT (SGX: K71U)
Keppel REIT will acquire an effective 50% interest in 255 George Street, a freehold office building located in Sydney, Australia.
The deal is worth approximately S$321 million.
The building is accessible using multiple modes of transportation and boasts good amenities.
It also has a high committed occupancy of 93% and a long weighted average lease expiry of 6.8 years by net lettable area.
The tenants comprise government agencies such as the Australian Taxation Office and financial institutions such as the Bank of Queensland (ASX: BOQ).
This property will deliver a first-year yield exceeding 6%.
When the acquisition is completed, Keppel REIT’s top 10 tenants will see their gross rental income contribution decrease from 32.7% to 31.1%, thereby enhancing tenant diversification.
The proportion of freehold assets will increase from 33.2% to 36.4% of the portfolio.
The office REIT’s distribution per unit (inclusive of the anniversary distribution) is expected to rise by 1.4% to S$0.0588.
Completion will take place in the next two quarters with aggregate leverage expected to rise to around 41% if the acquisition is fully funded by debt.
Seatrium Limited (SGX: S51)
Seatrium announced that it has secured a series of major contracts valued at S$350 million to be completed by the end of next year.
These contracts involve a diverse range of repair and upgrade (R&U) jobs.
Seatrium will convert three LNG carriers into Floating, Storage and Regasification Units (FSRUs) for Karpowership with an option for a fourth project.
This conversion will commence in the second quarter of 2024 (2Q 2024) and will reinforce the blue-chip group’s position as a market leader in the FSRU conversion market.
Another contract was secured with MODEC Management Services Pte Ltd for the maintenance and upgrade of a Floating Production Storage & Offloading (FPSO) system.
This project will also begin in 2Q 2024 along with another project for major remediation work for Chevron Thailand.
Cruise liners Carnival Corporation (NYSE: CCL) and Royal Caribbean Group (NYSE: RCL) also dished out a total of 10 contracts to Seatrium for vessel retrofits.
Other projects secured by the group include major repairs for a semi-submersible drilling rig from Japan Drilling along with a series of naval work for 2024.
ComfortDelGro Corporation Ltd (SGX: C52)
ComfortDelGro, or CDG, announced that its wholly-owned subsidiary, Metroline Limited, was awarded contracts to operate four bus franchises.
These contracts were awarded by the Greater Manchester Combined Authority (GMCA) in the UK.
Metroline will operate bus services for five years with options to extend the contracts for two one-year terms.
In total, CDG will supply 232 different services served by 420 buses and more than 1,350 employees, helping to double its number of services and increasing its London portfolio by 30%.
These operations will commence on 5 January 2025 and will add to the group’s growing presence in the UK.
Metroline is the fourth largest scheduled bus operator in London and operates close to 17% of the city’s scheduled bus services.
CDG’s crop of UK companies operates in 23 different towns and cities and offers a comprehensive range of public and point-to-point transport options such as taxis, buses, coaches, and private hire vehicles.
The four bus franchises awarded are worth approximately S$720 million over five years.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
