Roxy-Pacific Holdings (ROXY SP) - DBS Research 2017-12-14: Loading Up For The Future

ROXY-PACIFIC HOLDINGS LIMITED E8Z.SI

Roxy-Pacific Holdings (ROXY SP) - Loading Up For The Future

Roxy-Pacific won freehold site at Novena, Derby Court for S$74m (S$1,426psf ppr).
Estimated breakeven at c.S$1.9k psf vs recent transactions nearby at close to S$2k psf.
Roxy continues to acquire landbank as it targets to launch all its existing landbank in 2018.

Roxy-Pacific just closed another collective sale (conditional agreement) for a freehold site at Novena, Derby Court for S$74m (S$1,426 psf ppr). The price is 19% above the reserve price, implying the tender was rather competitive.
This is a small development (fits well with Roxy’s appetite), to be redeveloped into potentially 70 residential units. The site is located nine minutes (walking on foot) away from Novena MRT station and five minutes from United Square.
The estimated breakeven price is c.S$1.9k psf vs recent transactions nearby at close to S$2k psf. 6 Derbyshire, located opposite Derby Court which was completed this year were transacted at an average of S$2.3k psf.
As we already know, land prices no longer come cheap but Roxy continues to landbank for the future as it targets to launch all its existing landbank in 2018. So far, it has been selective with its land sites, typically freehold and smallish developments – apt for its appetite that gives Roxy the needed flexibility to adapt to potential changes.
We remain positive on Roxy as a small-to-mid cap gem, a niche proxy to the Singapore property market. Maintain BUY rating, TP of S$0.69. (Initiation report: Roxy-Pacific Holdings: Sexy Roxy).

Rachel TAN DBS Vickers | Derek TAN DBS Vickers | http://www.dbsvickers.com/ 2017-12-14

DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 0.690 Same 0.690