Golden Shoe Carpark could be key to CapitaLand Commercial Trust’s growth
By: Gwyneth Yeo
SINGAPORE (Jan 9): CapitaLand Commercial Trust could be set for growth as it prepares to
redevelop Golden Shoe Car Park (GSCP) into a higher value commercial building, and RHB Research has named it its top pick for the office property sector.
According to RHB research analyst, Vijay Natarajan, GSCP could add another 1 million sq ft of commercial gross floor area to the prime CBD area when it is completed in 2021.
“We estimate total development costs (including a differential premium) to be in the range of SGD1.5-2bn, based on a similar redevelopment of Market Street Car Park. We are
positive on the value-unlocking move, considering the prime location and limited visibility of office space coming onstream post 2020,” said Natarajan.
The group’s
potential sale of a 50% stake in One George Street could also raise between
$550 million and $600 million in proceeds that could be used for GSCP’s redevelopment.
Meanwhile, the REIT has been able to increase its occupancy rate by 0.2 percentage points to 97.4% for 3QFY16. It also has
1% and 6% of leases up for renewal in 2017 and 2018, which Natajaran says will help it navigate the challenging office market in 2017
As such, the brokerage is maintaining its “buy” recommendation for the stock, with a target price of $1.68.
Units in CCT closed at $1.54.
Source:
