The launch of Parc Botannia on 11th November is reported in 2 of the main newspapers in Singapore this morning – The Straits Times and The Business Times. SPK just issued a review on Parc Botannia last night and readers can access the review here.
You can also access the news articles from the links below:
Thinking that Parc Botannia is a good development and wanting to profit from this project? Well, the most direct way is to bring your cheque book down to the showflat and book a unit on the launch date. If direct property investment is not your cup of tea, why not look at investing in the shares of Sing Holdings?
Parc Botannia is developed by Sing Holdings (70%) and Wee Hur (30%), with Wee Hur being the main contractor for the project. The 2 partners acquired the site via Government Land Sales in September last year, when they outbid 13 other developers to clinch the site at a tender price of S$287.1 million or about S$517 psf ppr.
Adding on other costs, such as construction, marketing, fees and financing expenses, SPK estimates that the total development cost for the project would probably lie in the region of S$510 million to S$540 million, or breakeven selling price of S$900 psf to S$960 psf. If Parc Botannia turns out to be a sell-out project at S$1,280 psf, it could potentially generate an after-tax profit of S$145 mil to S$170 mil to the JV, of which Sing Holdings will get development profits S$100 mil to S$120 mil, and Wee Hur getting S$44 mil to S$52 mil (before adding in the profit margin for its construction work).
Sing Holdings is a publicly listed company on the Singapore Exchange. It currently has a book value of S$255 mil and it is trading below its book value, at an attractive 0.77x price-to-book value. Sing Holdings has a market capitalization is approximately S$196.5 mil. Upon fully sell-out and completion, the profit recognised from Parc Botannia could potentially raise the company’s book value by 40% to 47% to S$355 mil to S$375 mil. If we value Sing Holdings at this maximum potential book value, current valuation looks even more attractive at 0.52x to 0.55x its maximum potential (reappraised) book value!
So why not ride along with Sing Holdings and let the developer help you make your money instead?
The information and opinion contained in this blog posting above is based solely on the personal analysis of Singapore Property Kaki (“SPK”) and is for general information purposes only. SPK assumes no responsibility for errors or omissions in the contents of this blog posting. In no event shall SPK be liable for any special, direct, indirect, consequential, or incidental damages or any damages whatsoever, whether in an action of contract, negligence or other tort, arising out of or in connection with the use of the content in this blog posting. SPK reserves the right to make additions, deletions, or modification to the contents at any time without prior notice.