Dear ateo, yes, different valuers/investors use different methods to value commercial/residential property assets.
One way to value assets is based on rental yield. So, if one assumes market expects a 5% yield for a space, then the value is simply the product of annual rental divided by expected yield.
This method of valuation can have these “flaws”: 1. opinion on what is the right yield is subjective; 2. annual rent may be based on past contracts which could be renewed as early as the following month, at substantially higher rates; 3. a shop unit’s true market value may include other components such as en bloc premium, possible change of use (from recreation to restaurant for eg), etc; 4. it assumes the shop is kept solely for rental yield, and not disposal value.
Other methods of valuation therefore take into consideration the factors mentioned above.
Hence, while SB might have valued its shops at $80m, another person could have valued it, at the same time and not further down the road, at $130m, for eg.
Thanks Sumer for the reply. In that case, does or will HH after permission from SB, show some legal documents or property valuator reports on such mentioned properties. Therefore, establish better creditability on this account.
So somehow, the world is not always so black and white when come to this.
It has been highlighted during Hiap Hoe's EGM that its NTA after acquiring SB should be $1.51 instead of the $1.90+ initially indicated. There was an oversight of acquisition cost (ie, the cost of buying SB) that resulted in the adjustment.
Meanwhile, the co said it would launch 2 of its apartment projects in Melbourne around mid-2014. One of the projects has about 700 units, which is significant.
HH also hints that the offer price for SB will not be raised. It's up to investors to decide if they want to bet otherwise. There is also uncertainty as to whether HH will garner 90% of SB, and whether HH will waive this pre-condition in the takeover exercise.
My bet is as good as anyone else's at this moment.
So for now, all SB shareholders will receive the acquisition document and submit their acceptance? Those who want to bet, will have to wait on and see if SB shares rise above $0.75 or HH to raise its offer if they did not get 90%.
In addition, Mainboard-listed Hiap Hoe also said it planned to make SuperBowl its wholly-owned subsidiary and to delist SuperBowl, as a separate listing would incur another set of compliance costs. (Source: Business Times). Does this mean 90% is way to go? so SB shareholders should hold out?
Last edit: 9 years 8 months ago by ateo. Reason: Update.