CapitaLand And Units Raised $5b This Year

Source : The Business Times, October 14, 2008

Good access to capital markets, with $2b devt loan secured in July

CAPITALAND and its various listed entities have raised more than $5 billion of debt year-to-date, the developer said yesterday.

Paris purchase: CapitaLand's Ascott Group serviced residence unit has acquired the historic 51-unit Citadines Paris Louvre building for 21.5 million euros from Predica

CapitaLand, Singapore's largest developer by market capitalisation, reported the figures in slides that it posted on the Singapore Exchange (SGX) website. The company intends to present the slides to investors at Macquarie's International Real Estate Conference in London and New York from Oct 13-17.

The developer added that it has good access to capital markets. In July, the company secured a $2 billion development loan for its upcoming Farrer Road condo.

Developer stocks have taken a beating this year on concerns about their ability to raise funds. OCBC Investment Research analyst Foo Sze Ming said earlier this month that the current pullback in property prices could see banks continue to reduce their exposure to the property sector and therefore compound the credit crunch on those developers in need of funding.

CapitaLand shares have lost 56.5 per cent so far this year as several analysts downgraded the stock to a 'sell'. In H1, the developer had a net debt of $8.2 billion. Cash reserves stood at $3.4 billion and the debt-to-equity ratio was 0.68 - but the two numbers exclude recent recycled capital of some $2.9 billion from projects such as 1 George Street and Somerset Orchard.

Separately, CapitaLand announced yesterday that its wholly-owned serviced residence unit The Ascott Group has acquired a historic building in Paris for 21.5 million euros (S$42.9 million) in cash.

Ascott has held a lease on the 51-unit Citadines Paris Louvre from Predica since it first acquired the Citadines chain in 2002. Predica is the insurance arm of Credit Agricole, one of France's major banks.

The purchase price was determined after taking into account the property's market value, among other factors, CapitaLand said. The property, which was constructed in 1908, is gazetted as a preservation building.

Ascott has held a profitable lease on Citadines Paris Louvre since 2002, said Chong Kee Hiong, Ascott's deputy chief executive for finance and investment. The property is now one of Ascott's best performing in Paris, with an 85 per cent occupancy.

Said Ascott chief executive Jennie Chua: 'We will continue to seek high-yielding acquisition opportunities in key cities that enhance the overall yield of our properties.'

Ascott currently has a total portfolio of 5,620 units in 49 properties in Europe. Sixteen of these properties are in Paris. Globally, the group has 16,000 operating serviced residence units as well as more than 6,000 units under development.

CapitaLand took Ascott private earlier this year. Its stock gained 22 cents to close at $2.73 yesterday.