DBS Group Research estimates that Guocoland could enjoy an increase of between 18 and 20 cents per share (or 3.5%) to its existing RNAV of $5.70, following Jan 18's result of a government land sale.
A Guocoland consortium that includes Hong Leong Holdings and TID put in the sole bid of $770.46 million for a 783,000 sq ft white site at Marina Gardens Crescent.
At $984 psf ppr, what this consortium will pay is 42% lower than an adjacent site awarded to Kingsford Development last June for $1,402 psf ppr.
The bid is also 25% lower than what IOI Properties paid in 2021 for the upcoming Marina View, slated for launch soon.
In their Jan 19 note, DBS analysts Derek Tan and Tabitha Foo figure that this site could shape up to be a new landmark, and is a "coup" for the consortium, given the differences in land cost.
"While its location within the CBD could mean that the Singaporean buyer pool will be smaller due to lack of schools and amenities, we see a good buffer," state Tan and Foo.
Assuming a mixed development consisting of 775 residential units, 130,000 sq ft of office and commercial space, the gross development value of this project will be around $2.2 billion and gives a "comfortable margin" of more than 25%.
Guocoland last traded at $1.44.
