Month: November 2009
SPH – BT
SPH-led consortium makes top bid for Clementi mall
With FairPrice and Income onboard, it puts in $541.9m bid
A joint venture involving Singapore Press Holdings (SPH) subsidiary Times Properties, NTUC FairPrice Co-Op and NTUC Income Insurance Co-op placed the top bid of $541.898 million for a mall being developed in Clementi Town Centre by the Housing & Development Board (HDB).
The top bid was 41.9 per cent above the next highest bid of $382 million, made by a joint venture involving Keppel Land’s fund management unit Alpha Investment Partners and Guthrie.
HDB is building only the core structure and facade of the mall, which it aims to hand over to the winning bidder in August next year. The new owner will then finish the project internally, with flexibility to plan the theme and layout.
Clementi Mall – the working name for the property – comprises two basement levels and five storeys above ground with a maximum net floor area of 18,000 square metres or 193,750 square feet of retail space.
An air-conditioned bus interchange will be on the first level and the third level will be connected to Clementi MRT Station.
The SPH-led consortium’s top bid works out to $2,797 per square foot (psf) based on the maximum allowable retail net floor area (NFA), says Stella Hoh, head of investments at Jones Lang LaSalle, which handled the tender exercise for the mall for HDB.
Including an estimated fitting-out cost of about $50 million, the unit price works out to $3,055 psf of retail NFA, she added.
Knight Frank managing director Danny Yeo, using a lower fit-out expenditure assumption of $40 million, says the top bid works out to about $3,003 psf of retail NFA.
‘To achieve a 5.5 per cent to 6 per cent net property yield that most investors would want today for such an asset, an average gross monthly rental of about $18 psf would be required. Right now the average rental at the best suburban malls is about $15-16 psf,’ he said.
‘If they get their tenant mix right, it would not be a problem to grow the mall’s rental level in a few years,’ he added.
When contacted, a spokesman for SPH said: ‘We intend to optimise the usage efficiency of the mall.’
He added that ‘the joint venture parties have evaluated the business case for the project and believe that it is a reasonable bid’, citing several factors, including the good catchment area.
Besides its location in Clementi Town, the property is in close proximity to the Holland, Bukit Timah and West Coast areas with key tertiary institutions such as the National University of Singapore, Ngee Ann Polytechnic, Singapore Polytechnic and UniSIM.
‘There are not many malls in the area. The property is in a high-traffic area due to integrated transport amenities and the business will provide solid and steady income stream to the JV parties,’ he added.
SPH is leading the joint venture with a 60 per cent stake, with FairPrice and Income taking 20 per cent each.
FairPrice will operate a supermarket and Income is also considering taking up some space in Clementi Mall, said SPH’s spokesman.
The other bidders at yesterday’s tender were Frasers Centrepoint Ltd ($352.1 million), the trustee of CapitaMall Trust, and Australia’s Lend Lease group.
StarHub – BT
StarHub to sell iPhone within 2 months
THE iPhone will no longer be a differentiating factor for local telcos as StarHub becomes the last operator in Singapore to take a bite at Apple’s coveted handset.
The touch-screen gizmo that launched a thousand queues globally will go on sale at StarHub shops within two months, after the operator said yesterday that it too has clinched re-seller rights for the device.
This comes after a similar announcement by rival MobileOne last month.
Like M1, StarHub said that it will only reveal pricing closer to the handset’s launch date.
These two deals were sealed after almost two years of stop-start negotiations with Apple that harked back to the second half of 2007 following the first iPhone’s debut in the United States.
SingTel was eventually given first shot at selling the follow-up model – the iPhone 3G – in Singapore in August 2008. The exclusive arrangement was extended to the latest version – the iPhone 3GS – this July.
Consumers now pay nothing to $678 for an iPhone at SingTel, depending on their subscription plan. However, with two more telcos in the picture, prices are expected to drop across the board to reflect the new market dynamics later this year.
As previously reported by BT, StarHub and M1 continued their talks with Apple despite the SingTel victory, but an agreement could be not reached earlier due to disagreements over thorny issues such as revenue sharing and subsidies.
However, market watchers said that Apple is now more willing to concede middle ground to meet aggressive iPhone sales targets.
SingTel – CIMB
Associate and iPhone subsidy dampener
2QFY10 results preview
We expect SingTel to register a small 0-3% qoq decline but up 14-18% yoy in 2QFY10 core net profit of about S$915m-945, which is scheduled to be released on 11 Nov 09. This is below consensus’s S$976m. The expected key features of the results are: 1) a weaker contribution from Bharti due to competition in India and interest expense at Telkomsel, despite stronger currencies; and 2) weaker margins at SingTel Singapore and Optus due to subsidies on the iPhone 3GS. The robust yoy growth is due to a low base when Singapore and Optus succumbed to higher iPhone subsidies and Telkomsel was affected by competition. All in, the results cold come below our FY10 estimate, which has downside risk due to Bharti. We maintain UNDERPERFORM on SingTel, with a SOP-based target price of S$3.10. Likely de-rating catalysts are mounting competition in India and Australia. Switch to M1 or Axiata.
The details
Bharti disappointed. SingTel’s largest associate Bharti which contributes 21% to its estimated FY10 PBT was affected by competition. For the first time in memory, Bharti’s topline contracted as it fell -1.0% on a qoq basis pulled down by a 1.6% qoq fall in mobile revenue. The ARPU reduction was particularly acute in 2Q as it shrunk 9.4% qoq, the highest level in the last three years. We think this is just the start of more bad news to come.
While Telkomsel turned in a commendable operating performance with EBITDA growing 7% qoq, this was dampened by higher interest expense as the company geared up. All in core net profit was flattish qoq.
iPhone subsidies in Australia and Singapore. We expect margins of both Optus and SingTel Singapore to come under pressure from the iPhone 3GS subsidies, which was launched in end-June and mid-July respectively. Their margins declined 2.9% pts and 2.0% pts respectively in 2QFY09 when the iPhone 3G was launched. However, we do not think their margins will be as substantially impacted by the 3GS as the pentup demand appears to be less.
Currencies in SingTel’s favour. The regional currencies generally favoured SingTel. The Aussie dollar and Indonesian rupiah strengthened 6% and 3% respectively against the Sing dollar, while the Indian rupee weakened 2% during the quarter.
Valuation and recommendation
Maintain UNDERPERFORM despite the recent correction in its SingTel’s share price due to our concerns over its ability to recover the Barclays Premier League cost and the rising competition within both India and Australia. We maintain our earnings forecast for SingTel until the release of its 2Q results but we are likely to cut our it for Bharti due to mounting competition. There is no change to SingTel’s SOP-based target price of S$3.10 for now. M1 remains our top Singapore telco pick. For regional exposure, we prefer Axiata.
SingTel, StarHub – BT
StarHub, SingTel spice up pay-TV offer with free channels
THE scuffle between Singapore’s two pay-television rivals has intensified as both turn to free channels as their new weapon of choice.
StarHub will offer its cable television customers two free sports channels from next year to give them incentive to stay tuned despite its loss of the Barclays Premier League (BPL).
The complimentary offerings include a new 24-hour self-packaged sports channel slated to debut in January 2010. The channel will carry a variety of sports programming from tennis to soccer, and will showcase at least one football and wrestling match per week. In addition, Eurosportnews, a channel now included in StarHub’s sports group, will be free from July next year.
Meanwhile, Singapore Telecommunications is giving early bird specials to sports fans who sign up for the BPL 2010/11 and the ESPN Star Sports suite of channels, or the standalone BPL 2010/11.
They will get for free, until July 31, 2010, its Football Frenzy Pack, which offers all the UEFA Champions League and UEFA Europa League matches – both ‘live’ and demand – over TV, mobile phone and online, as well as the Italian Serie A (09/10 season) matches on mio TV.
Subscribers will also get a free 30-day preview of all mio TV programmes, excluding movies and video-on-demand content.
The tweaks come on the heels of StarHub’s loss of the prized BPL broadcast rights to SingTel last month. The red camp outbid StarHub to score exclusive access to the 2010-2013 seasons of the soccer league.
To add insult to injury, SingTel also convinced ESPN Star Sports, currently the anchor tenant of StarHub’s sports portfolio, to switch allegiance from the middle of next year.
To reflect the loss, StarHub said that it would slash the price of its sports group by more than 50 per cent from next July. It now charges $25 a month for the package. Further changes to sports channels and prices will be announced in the first half of 2010, it said.
In a related announcement, StarHub said that it has joined hands with UK-based Mirror Group Newspapers to launch a new football portal for its mobile subscribers. StarHub customers will able to access the free site and receive EPL and Champions League updates on their phones without incurring cellular data charges.
SingTel – BT
Resorts World Sentosa places $21m bet on SingTel
RWS is one of the first corporate backers of SingTel’s pay-TV service
SINGAPORE Telecom’s corporate pay-TV ambitions got a boost yesterday from a $21 million deal to provide a multimedia entertainment system and other technology services to Genting Singapore’s Resorts World Sentosa (RWS).
Under the seven-year contract, the operator will equip all 1,800 rooms at the integrated resort’s six hotels with an in-room entertainment system and high-speed wireless Internet.
Guests will be able to surf wirelessly and access computer games, music and content from SingTel’s mio TV service.
RWS is one of the first corporate backers of the operator’s fledgling pay television service, which until recently has been offered to consumers only.
Businesses such as hotels, restaurants and pubs are central to SingTel’s pay-TV strategy, as they could be more lucrative than the consumer segment. Having paid a premium for the English Premier League (EPL) broadcast rights, SingTel also needs to tap the corporate segment to help recoup costs.
SingTel previously told BT it has conducted in- house trials to see how it can deliver mio TV content such as the EPL to business customers.
Besides wireless Internet and multimedia entertainment, SingTel will also deploy a location-based mobile advertising service for RWS.
This will allow guests to receive text and multimedia messages when they are near pre-defined locations. For example, a customer might receive an electronic dining coupon via their mobile phone when they are walking towards a particular restaurant.
The multi-million dollar contract also includes a system to manage and track RWS’ fleet of limousines.