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The government’s plan to revitalise the CBD is set to benefit UOL even further.
With three hotels and a retail mall within the Marina Bay area, UOL could benefit from revamp and redevelopment potential, on the back of the government’s rejuvenation plan for the CBD, reported Singapore Business Review citing DBS Equity Research.
The firm has built a strong presence in the area following its acquisition of a 50 percent stake in UIC and a minority stake in Marina Centre Holdings (MCH).
“UOL now has control over a prime integrated development comprising a retail mall and three hotels fronting the Marina Bay area,” said Rachel Tan and Derek Tan, analysts at DBS Equity Research.
The redevelopment of Marina Square provides UOL with the opportunity to become a hotel operator, with the possible change of operator at Marina Mandarin, in which UOL may compete with Pan Pacific.
The firm could also bank on another potential redevelopment of Marina Square with plot ratio enhancement, land banking opportunity and potential uplift of land tenure.
“According to the government incentive scheme, a residential component will have to be included in the redevelopment plans. Management sees this as a land banking opportunity in the medium-term,” noted the report.
However, UOL’s management is mindful of potential costs involved, which include development charges and construction costs.
In Q1 2019, UOL saw its profit dip five percent year-on-year to $72.4 million from $76 million over the same period last year. The firm attributed the drop to a higher proportion of overseas profits which come with higher taxes as well as profits from non-controlling assets.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg
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