ZM_tenants1
Coming soon to Balestier: Zhongshan Mall, which is the retail section of the Days Hotel, has attracted tenants such as FairPrice and Crystal Jade, as indicated on the construction hoarding at the site.

 

ZM_tenants2

All photos by NextInsight

Ramada_HH
The 391-room Ramada Singapore at Zhongshan Park

WHAT IS THIS integrated hotel project in Balestier whose developers are seeing their stock prices gain momentum?

On this page, we present the latest pictures of the two hotels and a park.

Their developers are Hiap Hoe Limited, which currently has another three high-end residential projects under construction.

Its sister company is Superbowl, which is co-developing the Balestier project. Superbowl, by the way, is better known as an owner and manager of leisure and recreational facilities.

Their hotels will likely hit media headlines as they near completion.

The hotels are a 3-star and a 4-star which flank Zhongshan Park, and are sited a stroll away from the Sun Yat Sen Nanyang Memorial Hall.

Hiap Hoe and Superbowl are hailed by some investors for their extraordinary luck in clinching the plot of land during the 2008 global financial crisis.

zhongshanpark_centre
Zhongshan Park is an oasis of greenery sited between the 2 new hotels. Across the road is the Sun Yat Sen Nanyang Memorial Hall.

Their joint venture, HH Properties Pte. Ltd., bidded just $172 psf per plot ratio, which was way below the $350 - $470 range expected by market experts (see AsiaOne story).

Some four years on, ahead of the completion of the project, shares of Hiap Hoe and Superbowl have increasingly gained recognition from the market.

In the year to date, Hiap Hoe stock is up 48%, closing at 60.5 cents last Friday compared to 41 cents at the start of 2012.

And Superbowl is up 38% with a closing price of 38.5 cents last Friday.

hiaphoe_9.12.stkchart
Hiap Hoe stock price in the past 12 months

A strong run-up in the share prices was seen last week -- on strong volume despite the stocks being usually illiquid.

This came after DMG & Partners Securities analyst, Goh Han Peng, put out a report on the company on Wednesday, as follows:

"We recently met up with Hiap Hoe’s management and came away with the following takeaways:

"The Zhongshan Park commercial development is progressing well, with the 405-room Days Hotel expected to obtain TOP this month, followed by the retail component in December, and the and the office space in early 2013.

"Pre-leasing activities has commenced with the retail space 50% taken up by tenants such as NTUC Finest, Guardian, Crystal Jade and Toast Box.

"When completed, Hiap Hoe will have a stable source of recurring income.

DaysHotel_HH
The 405-room Days Hotel Singapore at Zhongshan Park

Goh-Han-Peng
Goh Han Peng, analyst
















"We estimate a gross development value of over $600m for the development, of which Hiap Hoe’s 50% share amounted to $309m.

"We raise our RNAV/share for the stock from $1.22 to $1.36, primarily from upgrades to the hotel component of Zhongshan Park, valuing the 3-star Days Hotel at $500k per key (from $400k per key) and the 4-star Ramada Hotel at $600k per key (from $500k per key).

"On the same 50% discount to RNAV, our T.P. is raised from $0.61 to $0.68. Maintain BUY with 23% upside."

HiapHoe_crane
Hiap Hoe's name is proudly displayed on a crane operating at the top of the Ramada hotel.

Investor says:

Just a day before the report, on Tuesday, a property investor going by the nick 'Sumer', shared some findings of his own in the NextInsight forum (click here), as follows:

"One Dusun Mall, just 3 min walk from Zhongshan Park, was recently launched for sale at $5,000-$6,000+ psf for its retail shops.

Apparently the retail space is fully sold!

Even if ZP's shops are valued at a lower $3,500 psf (being 99 year), its estimated 55,000 sq ft retail space is then worth $192.5 million!

The office space of about 65,000 sq ft, if valued at $1,500 psf, is worth another $97.5 million, bringing the total retail/office component to $290 million.

Since the total cost of construction and land for the whole ZP site is only about $270 million, Hiap Hoe is virtually getting its 2 hotels for free!

Conservatively valuing the 2 hotels at an average of $500,000 per room gives a value of about $400 million. That works out to 42.5ct for Hiap Hoe's 50% share.


Recent story: @ HIAP HOE AGM: 'Please give more dividend with hotel recurring income'

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Comments  

#4 Sonya 2013-05-26 18:26
First and foremost, congratulations to Hiap Hoe in their recent launch of Zhong San Park, with the hotels - Days and Ramada.

I am very happy that Fairprice Finest is now walking distance from my house but one important issue which I hope the management will look into seriously and with immediate actions possibly. As I visit the mall in the evening, usually after dinner, I noticed that it is very dark outside Ramada Hotel, where the cars are turning in as there are no lights. I find it very dangerous especially for old folks or kids and with the curbs and stairs situated at the entrance of the drive-in, unless you know the your way very well, otherwise, I foresee there will be people falling off or getting knocked over by cars turning in.

Please see to the visual improvement.
#3 Ho Ho 2012-09-15 09:11
Maybank Kim Eng has a non-rated report on Hiap Hoe during the time when the shares spiked up in April 2012. Alison Fok gave it only 3 chillies out of 5 at that time stock price was 51.5 cents. She should have given it 5 chillies!
Now at 63.5 cents, the stock is worth 5 chillies, as the market re-rates this stock and as its 2 hotels reach completion and boost the NAV..... and recurrent income from hotel ops can start to flow in (slowly, at first) imho.

http://www.remisiers.org/cms_images/research/Apr16-Apr20_2012/200412_Sunny_Side_Up1.pdf
#2 Zhong san 2012-09-15 07:30
So far only DMG covers the stock -- because they have a dedicated and enthusiastic property analyst looking at the smaller developers. I predict that a few other houses will soon take note of Hiap Hoe --- like OCBC and UOB KH. Maybank also..
#1 Puzzled 2012-09-10 06:31
Agreed that Hiap Hoe is a well run company but the property mkt is looking toppish and does the analyst actually know that there is a gestation period of a few years for most commerical projects before they actually break even?Just ask the SHK and Capitaland guys

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