Singapore Property - DBS Research 2016-02-16: A Quiet Start to 2016

Singapore Property - DBS Research 2016-02-16: A Quiet Start to 2016 CITY DEVELOPMENTS LIMITED C09.SI  FRASERS CENTREPOINT LIMITED TQ5.SI  CAPITALAND LIMITED C31.SI 

Singapore Property - A Quiet Start to 2016 

  • Jan-16 remains quiet; developers clearing existing inventory 
  • EC sales pick-up; take up rates improved marginally to 64%
  • Sales in OCR remains resilient ( -12%y-o-y vs -26%y-o-y) in core region 
  • Volume to remain lacklustre in 2016 



Jan-16 remains quiet; developers clearing existing inventory. 

  • January remained a quiet month with 322 private residential transactions (478 units, including executive condominiums). 
  • Developers focused on clearing existing inventory while launching only c.146 units. 
  • Major re-launches at The Glades (80 units launched, 12 units sold), The Poiz Residences (20 units launched, 26 units sold) and Vue 8 Residence (20 units launched, 6 units sold). 
  • POIZ Residences recorded highest sales for the 3rd consecutive month since its launch in Nov-15 and achieved take-up rates of 94% vs 95% in Dec-15. 
  • The lower take-up rate in Jan 2016 is due to new launches in the month. 
  • Apart from POIZ, developments that recorded top sales in the month include The Amore (24 units; take-up rate of 53%), Kingsford Hillview Peak (21 units; 51%), Sims Urban Oasis (21 units; 92%) and The Brownstone (21 units; 54%). 

EC sales pick-up; take-up rates improved marginally to 64%. 

  • Sales in existing EC projects picked up (+26% m-o-m to 156 units) after five months of downward sales trend since peaking in July 2015. 
  • Take-up rates improved marginally to 64% from 63% in Dec. 
  • Top 3 EC sales in the month were The Amore (24 units; take up rate of 53%), The Brownstone (21 units; 54%) and The Vales (16 units; 33%). 
  • Total EC units yet to be launched are 1.8k from Qingjian Realty’s The Visionaire (35% of total units yet to launched), MCL’s Sol Acres (35%), and Sim Lian’s Wandervale (30%; expected to be launched in Mar-16). 

Sales in OCR remains resilient. 

  • Sales in OCR region remains more resilient with sales falling less than the core region (-12% y-o-y vs - 26% y-o-y in core region). On m-o-m basis, both CCR and OCR recorded marginal improvements in sales at 26 units (+44%) and 372 units (+10%) respectively, while sales in RCR fell 48% to 80 units. 

Volume to remain lacklustrein 2016. 

  • We believe that the residential volume is likely to remain lacklustre in 2016 and expect developers to clear existing inventories. 
  • Potential positive catalyst that could re-rate the sector is the potential relaxation of property policies. 
  • Picks: CAPL, City Dev, FCL. 




Derek Tan DBS Vickers | http://www.dbsvickers.com/ 2016-02-16
DBS Vickers SGX Stock Analyst Report BUY Maintain BUY 3.73 Same 3.73
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BUY Maintain BUY 2.05 Same 2.05


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