When it comes to investing in condos in Singapore, one must also take into account the government’s property cooling measures. Over the years, the Singaporean government has implemented various measures to control speculative buying and maintain a steady real estate market. These measures include the Additional Buyer’s Stamp Duty (ABSD), which imposes higher taxes on foreign buyers and those purchasing multiple properties. While these measures may affect the short-term profitability of condo investments, they also contribute to the long-term stability of the market, making it a more secure investment environment.
CDL, a leading real estate developer, is making a move to acquire all outstanding shares of New Zealand-listed Millennium & Copthorne Hotels New Zealand Limited (MCK) through its subsidiary, CDL Hotels Holdings New Zealand Limited (CDLHH NZ). The offer, at NZ$2.25 ($1.72) per share, aims to delist and privatise MCK, simplifying the ownership structure of CDL’s New Zealand entities. MCK currently owns, leases, or franchises 18 hotels in New Zealand and has investments in Australian properties through its Kingsgate Group subsidiaries.
At the end of trading on Jan 17, CDLHH NZ holds 80.02 million shares in MCK, representing a 75.86% stake. In the event that CDLHH NZ reaches the compulsory acquisition threshold, it plans to acquire all outstanding shares and may redeem non-voting redeemable preference shares issued by MCK. However, as these preference shares are not included in the current offer, CDLHH NZ has stated its willingness to acquire them at NZ$1.70 ($1.30) per share. The purchase will be facilitated through its broker, Craigs Investment Partners, on the Main Board of the New Zealand Stock Exchange (NZX). As of now, CDLHH NZ already holds 91.34% of these non-voting redeemable preference shares.
If the offer is fully accepted, CDLHH NZ will pay a total consideration of NZ$57.29 million, with an additional NZ$7.77 million expected for the remaining redeemable preference shares. The offer price takes into account the current and historical market price, as well as the industry and business environment in which MCK operates. For the first half of fiscal year 2024, which ended on June 30, 2024, MCK recorded a net asset value (NAV) and net tangible asset value (NTA) of NZ$532.02 million. The NAV and NTA attributable to MCK shares subject to the offer amount to around NZ$85.62 million each as of June 30, 2024.
The offer is conditional upon CDLHH NZ receiving 90% or more of voting rights in MCK by 5 pm on May 2, as well as obtaining consent under the Overseas Investment Act 2005 and Overseas Investment Regulations 2005 of New Zealand to own and control all shares in MCK. The implementation and payment of the offer are not expected to have a significant impact on CDL’s earnings per share or net tangible assets for fiscal year 2025.