This comes after UOL’s gaining of a 50% controlling stake in UIC to 50% and its recent purchase of a minority stake in MCH, which Tan believes positions UOL to gain from asset enhancement / redevelopment potential riding on the Singapore government’s plan to rejuvenate the central business district (CBD).
“[With a minority stake in MCH], UOL now has control over a prime integrated development comprising a retail mall and three hotels fronting the Marina Bay area,” notes Tan.
“According to the government incentive scheme, a residential component will have to be included in the redevelopment plans. Management sees this as a land banking opportunity in the medium-term. While management is positive of the opportunity to intensify the land site, management is mindful of potential costs involved including construction costs and development charges,” she adds.
As at 11:22am, shares in UOL are trading 0.99% lower at $7.01 or 0.58 times FY19F book value.
