UOL properties to get more revamps amidst Draft Master Plan's CBD agenda

It has a retail mall and three hotels in the Marina Bay area.

UOL could gain from revamp and redevelopment potential riding on the government’s plan to rejuvenate the CBD, according to DBS Equity Research analysts Rachel Tan and Derek Tan.

The firm has a stronghold in the area following its 50% stake acquisition in UIC and its purchase of 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,” the analysts said in a report.

Also read: UOL Group's profit fell 5% to $72.4m in Q1

Moreover, UOL might be in for some opportunity as a hotel operator with the redevelopment of Marina Square with the potential change of operator at Marina Mandarin where UOL might go head-to-head against Pan Pacific.

The analysts also believe that UOL could bank on another possible potential redevelopment of Marina Square with land banking opportunity, plot ratio enhancement, and potential uplift of the 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 landbanking opportunity in the medium-term,” the report said, noting that UOL’s management, however, is mindful of potential costs involved including construction costs and development charges.

In Q1, UOL’s profits slipped 5% YoY to $72.4m in Q1 from $76m in 2018, which it attributes to a higher proportion of overseas profits with higher taxes and profits from non-controlling assets.