For every Frasers Property, CapitaLand and Mapletree Investments, there is a Stamford Land, Thakral Corp and World Class Land. These are small developers that braved the stormy seas and Singapore’s small market to try their luck in Australia.
Stamford Land for years has owned a portfolio of hotels and other real estate in Australia and New Zealand. Naturally, when the pandemic hit, the company’s earnings were affected although for the most recent 1HFY2021 ended September, there are signs of very significant improvements over 1HFY2020, when the hotels were shut. For the six months, operating profit of the hotels was around $22 million, versus a loss of $936,000 for 1HFY2020.
As a whole, Stamford Land’s earnings for 1HFY2021 was $16.3 million, versus just $1.5 million recorded for 1HFY2020. Revenue in the same period doubled from $40.1 million to $83 million. As at Sept 30, the company’s net asset value was 68 cents per share.
Back on March 27, the company announced that it is mulling a sale of the hotels. In an update on June 14, the company added that other than the appointment of JLL and CBRE as its sales agents, “nothing has changed” and that there no definitive agreement has been formed. “There is no certainty that any divestments or other transactions will materialise.”
Judging from the company’s recent moves, there is a change of tack. Instead of selling, Stamford Land plans to commit more heavily to its hotels in Australia. On Dec 7, it announced a nine-for-10 rights issue to raise up to some $238.9 million in net proceeds. Each rights share is priced at 34 cents, a 29.2% discount off the last traded price of 48 cents. Controlling shareholder and executive chairman Ow Chio Kiat and his related parties have given their commitment to subscribe for their entitlement.
According to Stamford Land, around a third of the proceeds will be used for the redevelopment of existing properties Stamford Plaza Brisbane and Sir Stamford at Circular Quay. Another third will be used to spruce up Stamford Grand Adelaide and/or Stamford Plaza Melbourne. The remaining funds raised will be set aside for “other opportunistic real estate acquisitions” within the coming two years.
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In its rights issue announcement, Stamford Land maintains that it has sufficient working capital to meet current requirements. The rights issue will beef up its financial position and capital base and give shareholders “an opportunity to participate in the growth and expansion” of its business while keeping their pro-rata equity interests.
Thakral seeks fortune in Oz
Thakral, which was notable in its earlier years as a distributor of consumer electronics in China, has in recent years channelled more of its resources into the real estate sector in Australia.
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Besides a series of residential development projects, Thakral is actively involved via a joint venture into the development of “retirement resorts” under the GemLife brand.
In its Aug 5 earnings announcement for 1HFY2021 ended June, Thakral notes that the property market in Australia, despite the pandemic, “has proven sturdier than expected”. It singles out Gold Coast, Sunshine Coast and Byron Bay over at New South Wales as specific markets that are doing well.
Having recently completed two residential projects, Thakral is paying more attention to the retirement resorts segment now, with a string of various projects under various stages of completion. Its current target of building 4,500 such homes is likely to be revised upwards.
For the company as a whole, earnings for 1HFY2021 ended June was $8.95 million, up from $241,000 in the year earlier. Revenue in the same period was up 44% y-o-y to $61.8 million. Thakral has declared an interim dividend of two cents per share, double that this time last year.
It’s not about jewellery anymore
Aspial’s unit World Class Global, which was delisted recently, had its main project in the form of Australia 108 — a 319m tall building in Melbourne completed last year. It was touted as the tallest building in the Southern hemisphere. The company in 2018 completed another project also in Melbourne, called AVANT, and according to its last annual report, it has launched another project Nova City in Cairns.
It also owns “various land parcels” mainly shophouses within the Unesco sites of Penang as well. For its last reported FY2020 ended December 2020, the company reported a revenue of $169.5 million compared to S$205.4 million in FY2019, from the recognition of sales from Australia 108.
As at Dec 31, 2020, it has some $240 million in unbilled sales from ongoing projects. For the same FY2020, the company reported a loss of $6.6 million from a combination of tax expenses in Australia and a fair value loss on derivatives. In contrast, it made a profit of $13.6 million for FY2019.
Photo of the Bribie Island clubhouse, one of the retirement resorts developed by GemLife / Thakral
