Singapore Property - DBS Research 2016-09-16: Resale transactions lift August sales

Singapore Property - DBS Vickers 2016-09-16: Resale transactions lift August sales CAPITALAND LIMITED C31.SI  CITY DEVELOPMENTS LIMITED C09.SI  UOL GROUP LIMITED U14.SI 

Singapore Property - Resale transactions lift August sales

  • Weak primary sales due to lack of major launches.
  • Resale transactions bucked the trend as total units moved in August 2016 grew by 30% y-o-y.
  • Take up of upcoming new launches will be a key barometer of buyer sentiment.
  • Picks are CDL, CapitaLand and UOL Group.


Weak primary sales due to lack of major launches.

  • The lack of new launches meant that primary sales came in 58% lower m-o-m, 17% lower y-o-y to 805 units.
  • Excluding ECs, only 473 private residential units were transacted, a 8% drop compared to a year ago. The top selling projects in the month were mainly previously launched Executive Condominiums (EC) located in the Outside Central region (OCR) with Sim Lian’s Treasure Chest (56 units), MCL Land’s Sol Acres (46 units) and Qingjian’s Bellewoods (37 units) taking the top 3 spots.
  • The top performing private residential development was The Trilinq (37 units) by developer IOI.
  • Total transactions, however, paint a different picture as the resale transactions push on. However, according to URA lodged caveats, we note that total property transactions (including resale and subsale) were one of the best since 2013. 
  • There was a total of 1,621 property transactions in August 2016, led by a 30% y-oy rise in resale transactions to 787 units. This mainly came from selected major re-launches in the Central region – namely The Interlace (34 units), D’Leedon (41 units) and OUE Twin Peaks (31 units).


Take up for upcoming new launches will be a key barometer of buyer sentiment. 

  • In the pipeline are a number of residential projects primed for launch in the coming months. These are namely – ALPs residences (MCC Land), Forest Woods (CDL), The Clement Canopy (UOL) and Queens Park (MCC land) and healthy take-up rates during the launches will be seen by the market as sign of a further stabilisation of the property sector.


Developer picks. 

  • We believe that City Developments (CDL) will continue to perform well as data-points indicate a further stabilisation of the Singapore property market. 
  • In addition, we see value in landlords like CapitaLand and UOL Group that have 
    1. diversified earnings streams which offer strong earnings visibility, 
    2. strong balance sheets implying ample capital to deploy opportunistically, and 
    3. catalysts from asset recycling activities.



Property Developer Stocks - DBS Research 2016-09-16




Derek Tan DBS Vickers | Mervin SONG CFA DBS Vickers | Singapore Research Team DBS Vickers | http://www.dbsvickers.com/ 2016-09-16
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 3.70 Same 3.70
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