One of the more exciting long-term projects announced during the recent National Day Rally is the Greater Southern Waterfront (GSW) rejuvenation project. The current Tanjong Pagar and Pulau Brani container terminals are part of the GSW, and when they shift over to the Tuas mega port which will open in phases from 2021, it will free up more than 2,000 hectares of land for potential redevelopment. This is almost six times the size of Marina Bay.
Though this is slated to be a long-term project that will only be implemented in phases and will last 5-10 years, investors can already look forward to spillover effects from this rejuvenation on companies and REITs. With the relocation of Pulau Brani Terminal, there are also plans to turn the area into one of fun and recreation to complement the current Sentosa island.
Here are four companies that could potentially benefit from the GSW project.
1. Mapletree Commercial Trust
Mapletree Commercial Trust (SGX: N21U), or MCT, is a Singapore-focused REIT that invests in properties that are used for office and/or retail purposes. Its portfolio consists of five assets with a total net lettable area of 3.9 million square feet and has a total value of S$7 billion.
MCT’s key asset is VivoCity, a large mall that is located on the fringe of Sentosa island and which is popular with both tourists and locals. As the GSW takes shape, the mall will be a direct beneficiary of higher footfall and human traffic. This will ensure the REIT can maintain high occupancy and also raise rental rates in line with higher demand, all of which will lead to an increase in distribution per unit (DPU) for investors.
2. Frasers Commercial Trust
Frasers Commercial Trust (SGX: ND8U), or FCOT, is a commercial REIT that invests in income-generating commercial properties. As of 30 June 2019, the REIT’s portfolio includes six commercial buildings located in Singapore, Australia and the United Kingdom, and are worth a combined appraisal value of around S$2.1 billion.
FCOT owns Alexandra Technopark and Alexandra Point, which are properties located in the vicinity of the GSW. These properties should also see higher demand for corporate tenants as the GSW area is rejuvenated, and that could translate to higher rental reversion rates and better occupancy levels.
3. Genting Singapore Limited
Genting Singapore Limited (SGX: G13) is engaged in the development and operation of integrated resorts, operation of casinos and the provision of services to the leisure and hospitality industries.
Genting owns the Resorts World Sentosa integrated resort, and with the revitalisation of Sentosa and plans for the redevelopment of Pulau Brani, this should see higher levels of tourists and locals visiting both places in time to come. The higher footfall will benefit both Genting’s casino business as well as its hotels business.
4. Straco Corporation Limited
Straco Corporation Limited (SGX: S85) is an owner and operator of tourism assets in both Singapore and China. The group owns two aquariums in Shanghai and Xiamen, China, as well as 90% of the Singapore Flyer. In addition, the group also owns the Lixing Cable Car attraction in Xi’An province, China, and has rights to develop a historical landmark Chao Yuan Ge.
With the GSW development, the entire region covering the Marina Bay area and Tanjong Pagar will see many new developments, including residential properties, cafes and other attractions. These would transform the area around the Singapore Flyer into a must-see destination for both tourists and locals and significant boost the utilisation rate from current levels, leading to better revenue and profits for Straco.
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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Mapletree Commercial Trust and Straco Corporation Limited. Motley Fool Singapore contributor Royston Yang owns shares in Straco Corporation Limited.