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Singapore Property - DBS Research 2016-11-16: New launches boost sales

Singapore Property - DBS Vickers 2016-11-16: New launches boost sales CAPITALAND LIMITED C31.SI UOL GROUP LIMITED U14.SI CITY DEVELOPMENTS LIMITED C09.SI

Singapore Property - New launches boost sales

  • October 2016 sales higher by 87% y-o-y mainly from robust sales seen at newly launched Forest Woods and The Alps residences.
  • YTD sales performance imply that 2016 is turning out to be a stronger year than 2015.
  • Unemployment and interest rate outlook could dictate price appreciation potential.
  • Picks City Dev, UOL and Capitaland.


October 2016 sales volume up 87% y-o-y led by new launches; transaction volumes in 2016 firming up to be stronger. 

  • As expected, primary sales rose 87% y-o-y led by private homes (+128%), of which more than half of the sales were from the new launches of Forest Woods (364 units) and The Alps Residences (334 units). EC sales increased 5% y-o-y.
  • Apart from the new launches, the sales volume for existing projects remains moderate, with 24 to 57 units sold among each of the top 10 sales by project. 
  • Among the EC sales, Sol Acres and The Terrace continue to be among the top 5 selling projects while The Trilinq was the other private project in the list, implying some clearance of the residential supply. 
  • YTD October 2016, primary sales volume is tracking ahead of 2015, +20% y-o-y led by EC sales (+56%) and private sales (+8%).


October 2016 resale transactions fell 7% y-o-y. 

  • Resale volume slowed down this month but YTD resale volume remains strong (+13%). 
  • OUE Twin Peaks recorded the highest sales at 21 units while sales at The Interlace (5 units) and D’Leedon (5 units) moderated. Total sales (primary+resale) grew 17% y-o-y (private +11%; EC +48%).


Unemployment rate and interest rate uncertainty to cast a pall on price appreciation potential. 

  • We maintain our view that the Singapore property market remains on a modest correction path, mainly from the suburbs (homes in the Outside Central Region), while prices in the core central region (CCR) is slowly bottoming out. 
  • Key uncertainties come from a 
    1. sharper-than-projected rise in Singapore citizens’ unemployment rate in 2017, and 
    2. shaper-than-expected rise in interest rates impacting affordability.


Developer picks. 

  • Developers that are trading at 0.75x P/NAV are still attractive. 
  • Our top picks are City Developments (CDL), CapitaLand and UOL Group, given their 
    1. diversified earnings streams that offer strong earnings visibility, 
    2. strong balance sheets which imply ample capital to deploy opportunistically, and 
    3. catalysts from asset-recycling activities.





Derek TAN DBS Vickers | Rachel TAN DBS Vickers | http://www.dbsvickers.com/ 2016-11-16
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 3.60 Same 3.60
BUY Maintain BUY 9.90 Same 9.90
BUY Maintain BUY 7.20 Same 7.20



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