Follow us on Twitter Find us on Facebook

YTL CORPORATION

YTL SUSTAINABILITY

UTILITIES
YTL POWER INT.

CONSTRUCTION
YTL CONSTRUCTION

MANUFACTURING
YTL CEMENT

PROPERTY DEVELOPMENT
YTL LAND & DEV.

REIT
YTL HOSPITALITY REIT
STARHILL GLOBAL REIT

TECHNOLOGY
YTL E-SOLUTIONS

COMMUNICATIONS
YTL COMMS.
YTL BROADBAND

EDUCATION
YTL FOUNDATION
FROGASIA
FROG EDUCATION LIMITED

TRANSPORTATION
EXPRESS RAIL LINK

CARBON CONSULTING
YTL-SV CARBON

ENTERTAINMENT
KL PAC

RESTAURANTS
LOT 10 HUTONG
FEAST VILLAGE
SHOOK! SHANGHAI

SHOPPING
L0T 10 SHOPPING CENTRE
STARHILL GALLERY
WISMA ATRIA
NGEE ANN CITY
RENHE SPRING ZONGBEI
DAVID JONES
MYER CENTRE ADELAIDE
PLAZA ARCADE

HOTELS & RESORTS
YTL HOTELS

ADVOCACY PROJECTS
YTL CCW
EARTH HOUR

REWARDS
YTL PLATINUM PLUS


YTLREIT Acquiring Niseko Village hotel for JPY6bn

   

Affin Hwang, August 15, 2018

YTL Hosp REIT
BUY
Target Price: RM1.32

YTLREIT has proposed to acquire the Green Leaf Niseko Village hotel from an indirect subsidiary of YTL Corp for JPY6bn (c.RM223m). YTLREIT will subsequently enter into 30+30 years long-term lease with the vendor at an initial gross yield of 5.25%. We are positive on the acquisition, expecting the transaction to be yield accretive. We maintain our earnings forecast, BUY rating and DDM-derived TP of RM1.32, pending completion of the transaction.

Acquiring Green Leaf Niseko Village for JPY6bn (c.RM223m)
YTLREIT has entered into a conditional sale and purchase agreement with Niseko Village K.K., an indirect wholly-owned subsidiary of YTL Corporation Berhad for the acquisition of the Green Leaf Niseko Village for a cash consideration of JPY6.0bn (equivalent to RM222.5m). The property is located in Niseko-cho, Hokkaido, Japan. The 200-room, 5-storey hotel was substantially renovated, refurbished and reopened in December 2010. The acquisition is a related party transaction.

The hotel to be leased to the vendor for 30+30 years
Upon completion of the proposed acquisition, YTLREIT will lease the hotel to the vendor under a 30-year lease agreement, with an option (granted to the vendor) to renew for a further term of 30 years. The initial annual rental payment is JPY315m for the first 5 years, with a step-up provision of 5% every 5 years. The rental translates to an initial gross yield of 5.25%.

We are positive on the acquisition
YTLREIT intends to fund the acquisition via borrowings and internally generated fund. We are positive on the acquisition: (i) the long-term lease (30 + 30 years) provide good earnings visibility; (ii) at a gross yield of 5.25%, we expect the acquisition to be earnings accretive, in view of the low JPY borrowing cost of c.1%; (iii) JPY-denominated borrowings is a natural hedge for the JPY rental income; and (iv) The acquisition should increase YTLREITís gross gearing to a manageable 40.3% (from 37.4%). Maintain BUY with an unchanged DDM-derived TP of RM1.32 We maintain our earnings forecasts for now, pending completion of the proposed acquisition. Maintain BUY with an unchanged DDM-derived target price of RM1.32. At a 6.7% FY19E yield, YTLREITís valuation looks attractive. Downside risks: a deterioration in the Australian hotel market, interest rate hike (s) and strengthening of Ringgit against the AUD.





Back
  1 November 2018
2:52:08 PM
YTL key leaders describe their leadership style  
 
  29 October 2018
8:41:04 AM
YTL Gets Behind Plastic Sustainability Efforts  
 
  24 October 2018
2:08:40 PM
The Academy Schools Londonís Bloomsbury in Style  
 
  15 October 2018
12:12:17 PM
Better performance expected for YTL Power unit Wessex Water  
 
  11 October 2018
1:26:05 PM
Tan Sri Francis Yeoh receives prestigious honour from Japan  
 
  5 October 2018
5:40:31 PM
Building through the generations  
 
  15 October 2018
12:07:04 PM
YTL PowerSeraya rolls out integrated brand  
 
  7 November 2018
9:44:42 AM
YTL PowerSeraya rolls out integrated brand for business and consumer energy  
 
  12 October 2018
6:04:07 PM
Cash is king but debt matters  
 
  10 October 2018
1:26:18 PM
YTL PowerSeraya Announces Launch of Geneco  
 
 
 

Contact Us | Newsletter | Career | Privacy Policy
Twitter | Facebook
 
Terms, Conditions and Disclaimers
Copyright © 2001 - 2018 All rights reserved.
Powered by YTL e-Solutions Bhd.