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

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%).

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 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.

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

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