Offers WHITESANDS for sale by tender
This luxury house project, if fully sold, should yield pretax earnings of >HK$600m
Inexpensive valuations in view of solid rental incomebase; BUY with HK$28.2 TPSwire Properties announced that it would put 24 houses atWHITESANDS in Cheung Sha on Lantau Island up for sale bytender. The tender will commence on 30 Sep and close on 27Oct. WHITESANDS contains 28 detached two-storey houseswith saleable areas ranging from 1,954sf and 2,598sf.Occupation permit was obtained in Feb-15.
The two sites where WHITESANDS is being built wereacquired through tender for HK$356.8m in Dec 2011.Adding construction and interest costs, we estimate totaldevelopment cost at HK$14,500psf on saleable area basis. Inthe area, Sino Land sold 6 houses at Botanica Bay at an ASPof >HK$23,000psf YTD. Based on our assumed ASP ofHK$24,000psf, we forecast that WHITESANDS, if fully sold,would yield pre-tax earnings of >HK$600m.
The stock is trading at 42% discount to our assessed currentNAV. Valuation is inexpensive in view of solid rental earningsbase. We reiterate our BUY rating with HK$28.2 TP, based on30% discount to our Jun-16 NAV.