New Issue: Ho Bee Land announces a new 5Y SGD senior unsecured green note at an IPG of 3.50%.

• Ho Bee Land Limited (HBL) intends to issue new SGD-denominated 5-year senior unsecured green notes due 30 June 2031 at an initial price guidance (IPG) of 3.50% for institutional and accredited investors. Net proceeds will be used to fund, finance, or refinance, in whole or in part, new or existing eligible green projects undertaken by the group, including the refinancing of existing, green-related borrowings. The issuer is currently unrated, and the proposed notes are expected to be unrated as well.

   
• HBL is a Singapore-listed real estate developer and investor with a diversified portfolio spanning Singapore, the United Kingdom, Australia and China. The group has progressively transitioned towards a recurring-income model over the past decade through the acquisition of high-quality commercial investment properties, particularly in London and Singapore. As of 31 December 2025 (FY2025), its property portfolio stood at approximately S$6.5b, with commercial assets accounting for 79% of the portfolio and the United Kingdom and Singapore representing approximately 91% of total portfolio value. Key assets include The Scalpel, Ropemaker Place and 1 St Martin’s Le Grand in London, as well as The Metropolis and Elementum in Singapore.

• For FY2025, HBL reported revenue of S$440.1m (-17% YoY), primarily due to the partial divestment of Elementum in FY2024 and planned vacancies at 1 St Martin’s Le Grand ahead of redevelopment works.  Nevertheless, the group’s core investment portfolio continues to perform well with occupancy rates remaining above 90% across key Singapore assets and above 95% across its London portfolio. Property investment remained the group’s key earnings pillar, contributing S$206.9m of operating profit or roughly 79% of total segment operating profit. Property development revenue declined to S$200.1m, mainly due to fewer residential settlements from Australia and lower contributions from Singapore projects, particularly Turquoise, which is largely sold. Despite the softer revenue environment, the development segment remained profitable, generating S$54.5m of operating profit.

 
• Overall operating profit remained resilient at S$261.5m, despite lower revenue, supported by recurring income of S$239.9m from its Singapore and London investment properties. Excluding the one-off gain arising from Elementum divestment in FY2024, underlying net profit increased 37% YoY to S$102.4m, benefiting from lower financing costs and stabilising valuations across its London office portfolio. Operating cash flow remained positive at S$177.1m, down from S$278.9m in FY2024, due to reduced development settlements and working capital movements. Nevertheless, the group continued to generate meaningful internal cash flow to support redevelopment expenditure, debt servicing requirements and future growth initiatives.

• Looking ahead, management remains focused on strengthening its recurring income base through the redevelopment of 1 St Martin's Le Grand and asset enhancement works at 67 Lombard Street. The group expects these initiatives to improve portfolio quality and rental income over time, while benefiting from an anticipated shortage of new Grade A office supply in London around the project's targeted completion period. At the same time, Australia remains a key growth engine, supported by favourable housing demand fundamentals, a development pipeline exceeding 3,500 lots and pre-sales that management indicated are running at multiple times current development revenue. Together, the group's recurring rental income platform and Australian development pipeline provide a balanced foundation for future earnings growth.

• From a credit perspective, HBL maintains a relatively conservative balance sheet supported by a sizeable investment property portfolio and recurring rental income stream. As of 31 December 2025, total borrowings amounted to S$2.5b against cash and equivalents of S$228.7m, yielding a net debt of S$2.3b and a net gearing ratio (net debt/equity) of 0.61x, marking an improvement from 0.66x in FY2024. The improvement in leverage was supported by disciplined capital management, growth in shareholders’ equity and positive operating cash generation of S$177.1m during the year.

 
• Interest servicing (operating profit / net finance costs) capacity remains adequate at roughly 2.3x, improving from 1.9x in FY2024. Meanwhile, the group's property investment segment continues to provide a stable source of recurring earnings, generating S$239.9m of rental income during FY2025 and contributing approximately 79% of total segment operating profit. We view this recurring income stream positively as it provides a degree of resilience through property cycles and supports debt servicing requirements.

• Liquidity and refinancing risks also appear manageable. As of FY2025, approximately S$543m, or 21% of total borrowings, mature within the next twelve months, while the remaining S$2.0b, or 79% of borrowings, mature beyond one year. Together with cash balances of S$228.7m and continued operating cash flow generation, and established access to bank financing, we believe the group remains reasonably positioned to address upcoming refinancing requirements.

• We are further encouraged by management's stated commitment towards balance sheet discipline. During the roadshow, management reiterated its preference to maintain net gearing within a range of 0.3x to 0.7x, with 0.5x viewed as a neutral level and leverage approaching 1.0x considered undesirable. Management also indicated that the redevelopment of 1 St Martin's Le Grand is expected to be broadly gearing-neutral, with funding supported by a combination of debt and internally generated cash flows. The group adopts a natural hedging strategy by aligning borrowings with the currencies of its underlying assets and cash flows, while utilising interest rate hedging instruments to mitigate financing cost volatility. In addition, management highlighted its intention to gradually increase the proportion of unencumbered assets within the portfolio over time, which should enhance financial flexibility and preserve future funding options. In our view, the proposed issuance may also support this objective by allowing the group to diversify its funding sources and potentially replace a portion of secured borrowings with unsecured capital market funding.

• Looking ahead, we expect Ho Bee Land's credit profile to remain supported by its substantial asset base, recurring rental income and prudent financial management. Key areas to monitor include redevelopment expenditure at 1 St Martin's Le Grand and asset enhancement works at 67 Lombard Street, as well as the execution of its expanding Australian development pipeline. Nevertheless, we take comfort from the group's moderate leverage profile, strong asset backing and management's demonstrated commitment towards maintaining a conservative balance sheet through the cycle.

• Recommendation: Our analysis below takes the 3.50% IPG as our reference, though the final price guidance (FPG) is likely to come below the 3.50% IPG level. In Table 1 below, we compare this new issuance with HBL’s outstanding debt and similar tenor bonds issued by its peers. In general, we think this new issuance by HBL is attractively priced, given HBL’s sizeable asset base, recurring rental income stream and moderate leverage profile. At the 3.50% IPG, the new notes offer an attractive yield pickup of approximately 60–100bps over comparable Singapore property issuers, while providing a spread of over 170bps against Singapore government securities of similar tenor. Investors seeking yield enhancement within the Singapore property space may find the proposed issuance attractive.

Table 1: Bond Comparison

Disclosure: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a position in HOBEE 4.350% 11Jul2029 Corp (SGD) and the analyst who produced this report holds a NIL position in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.