What is the news?    Cogent Holdings Ltd (Cogent) has been awarded a three-year lease (extendable by anotherthree-years) by the Singapore Land Authority to operate a student hostel at 362HollandRoad. The property comprises two blocks of one-storey buildings with a gross floor area ofabout 583.4sqm. The land area is about 2,318sqm. The property is able to house up to 60students. The property will be managed by Cogent's wholly-owned subsidiary, CogentRealty Capital Pte Ltd.    How do we view this?    § Builds upon existing property management capability into burgeoning studentaccommodation market    Cogent's property management arm currently operates a family lifestyle destination,The Grandstand, at Bukit Timah. This student hostel lease is an opportunity for Cogentto build upon its existing property management capability. The prospects for studentaccommodation is less sensitive to economic cycles, as compared to the rest ofCogent's business segments.    § Catchment of educational institutions nearby    Nexus International School, Tanglin Trust School, Singapore Polytechnic, INSEAD, theNational University of Singapore and the Singapore Institute of Technology are withinthe vicinity of the student hostel.    § Not a material contribution to Cogent's earnings    Owing to the size of the property, the operations would be small relative to the rest ofCogent's operations. We also note here that Cogent had put in the highest bid of thelease and there were four other bidders. Cogent had a winning bid of $32,362/monthand piped the second-highest bid by S$862/month for the site.    Maintain Buy; unchanged target price of S$1.    12    The property is currently vacant and no details have been disclosed on start-up capitalexpenditures or other operational details such as when it will commence operations. Wedo not make any changes to our forecast for now.    Our target price represents an implied 16.5x FY17e P/E multiple, compared to the StraitsTimes Index forward 12-months P/E multiple of 14.7x.

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