During a briefing on Aug 12, City Developments’ (CDL) management pointed out that its book NAV based on historical cost accounting stood at $9.22 as at June 30, 2021. If NAV were to include fair value gains on investment properties, it would be $14.22. If NAV were to include fair value gains on investment property and revaluation surplus on the hotel portfolio, it would rise to $17.

Hence based on current prices of $7, CDL is trading at 0.25 times book NAV, 0.49 times P/NAV including fair value gains, and 59% discount to revalued NAV (RNAV).

Now what if the freehold Fuji Xerox Towers, built in 1987, - which can be assumed to be held at cost of say below $100 million - were to be redeveloped with a GFA uplift, and in the ratio announced on Aug 12?

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