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
EARTH HOUR


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 YTLREIT’s 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, YTLREIT’s valuation looks attractive. Downside risks: a deterioration in the Australian hotel market, interest rate hike (s) and strengthening of Ringgit against the AUD.





Back
  24 April 2019
10:41:32 AM
YTL: Setting up Terragraph is easy, even with George Town's UN heritage status  
 
  24 April 2019
10:48:57 AM
YTL Comms Penang Terragraph Trial Hits 170Mbps Peak Download Speed  
 
  24 April 2019
2:10:33 PM
6 Easy Ways To Live A More Sustainable Lifestyle  
 
  12 April 2019
9:35:45 AM
YTL likely to be a winner if HSR project is revived  
 
  16 April 2019
5:55:21 PM
Potential revival of HSR seen as catalyst for YTL  
 
  12 April 2019
8:45:18 AM
Leap-frogging into 21st century learning  
 
  8 April 2019
12:59:09 PM
Malaysia a railway story  
 
  19 March 2019
5:30:41 PM
New master tenancy agreements for SGREIT's Malaysia Properties and asset enhancement works for YTL's Starhill Gallery  
 
  13 March 2019
4:59:19 PM
Making Malaysian Hospitality World-Class  
 
  27 February 2019
5:35:45 PM
YTL Corp's Half-Year Revenue Grows 11% to RM8.6 Billion (US$2.1 Billion)  
 
 
 

Contact Us | Newsletter | Privacy Policy
Twitter | Facebook
 
Terms, Conditions and Disclaimers
Copyright © 2001 - 2019 All rights reserved.
Powered by YTL e-Solutions Bhd.