Welcome to this week’s edition of top stock market highlights.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, and IOI Properties Group Berhad (KLSE: 5249) announced a share sale agreement for their joint venture South Beach mixed-use development.
Under this agreement, IOI will acquire CDL’s 50.1% stake in South Beach based on an agreed property value of S$2.75 billion.
This value is a 3% premium over South Beach’s latest valuation of S$2.67 billion as of 31 December 2024.
Based on CDL’s share, the sales consideration amounts to S$834.2 million.
Both CDL and IOI have been joint venture partners in South Beach since 2011.
The property comprises Grade A office space, a 634-room hotel, restaurants, cafes, and South Beach Residences, which consist of 190 luxury apartments and penthouses.
CDL expects that the disposal will result in a gain of approximately S$465 million when the transaction is completed by the third quarter of this year.
The blue-chip property group believes that this divestment represents a strategic opportunity to unlock value from South Beach and will provide it with enhanced financial flexibility to redeploy the proceeds.
The sale also allows CDL to crystallise gains in the property, and proceeds will be used to reduce borrowings to improve its net gearing ratio.
The cash can also be used for new acquisitions, investing in new development projects, or to optimise its capital management.
Such divestments remain a key pillar of CDL’s strategy and involve capital recycling activities that promise to unlock value for its shareholders.
GlobalFoundries Inc (NASDAQ: GFS)
GlobalFoundries is the latest company to announce plans to spend money to bolster its US production.
The Malta-based company manufactures essential chips for semiconductors and electronics makers that handle vital but mundane tasks such as controlling power and managing the flow of data inside devices.
The artificial intelligence (AI) boom increased demand for a variety of chips, boosting the need for power-efficient chips used in data centres and communication equipment.
GlobalFoundries, which is majority-owned by the government of Abu Dhabi, will commit US$13 billion to expand its existing plants in New York and Vermont.
The company will also make a US$3 billion spending commitment to research into advanced packaging and other technologies in the US.
However, CEO Tim Breen did not give a specific timeline on when this amount will be spent, citing the company’s need to be flexible in managing the supply-demand balance.
The investment is driven by higher demand from chip customers who are seeking more local production in an attempt to reduce reliance on suppliers that are concentrated in just one location.
This diversification is a direct effect of Trump’s tariff announcement as companies seek to rejig or re-adjust their supply chains to avoid paying higher taxes.
Mapletree Investments Pte Ltd
Mapletree Investments Pte Ltd, or MIPL, reported a strong turnaround for its fiscal 2025 (FY2025) ending 31 March 2025.
The investment firm announced a net profit of S$227.2 million, reversing the net loss of S$577.2 million in FY2024, largely due to revaluation losses.
Recurring net profit, however, fell by close to 11% year on year to S$637.4 million.
MIPL’s FY2025 revenue stood at S$2.2 billion, lower than the prior year’s S$2.8 billion, because of the deconsolidation of Mapletree Logistics Trust (SGX: M44U).
Despite the lower core net profit, the investment company’s assets under management (AUM) grew from S$77.5 billion to end FY2025 at S$80.3 billion.
The increase was due to a larger number of acquisitions and development projects.
The company acquired Derby DC1 and Verda Park in the UK, marking its first foray into the country.
MIPL also purchased a portfolio of 10 logistics assets in Spain.
Meanwhile, the firm is also marketing its Mapletree Emerging Growth Asia Logistics Development Fund, which focuses on Malaysia, India, and Vietnam.
This fund, which is targeted to close this year, will comprise development assets with AUM of up to US$1.8 billion.
MIPL is also the fourth-largest student housing owner in the UK, rising from seventh place last year.
The group owns 30,000 student beds in the UK and the US.
Another area of growth is data centres, with MIPL set to complete the construction of its first data centre development in Hong Kong in the second half of this year.
It is also exploring acquisition opportunities in locations such as London, Milan, Madrid, Japan, and South Korea.
As it builds up its data centre portfolio, there is a chance that these assets could be injected into Mapletree Industrial Trust (SGX: ME8U), another REIT that MIPL sponsors.
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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust.