Singapore Property Sector - DBS Research 2016-04-18: The power of three

Singapore Property Sector - DBS Research 2016-04-18: The power of three CAPITALAND LIMITED C31.SI  CITY DEVELOPMENTS LIMITED C09.SI  FRASERS CENTREPOINT LIMITED TQ5.SI 

Singapore Property Sector - The power of three 

  • Wandervale, Cairnhill Nine and Wisteria boosted Mar-16 sales 
  • Sales momentum appears to be picking up 
  • Upcoming new launches in Apr likely to see good interests 
  • Picks CAPL, City Dev and FCL 

Three projects boost Mar-16 sales. 

  • While headline residential sales was a robust 843 units (1,328 units including executive condominiums), it mainly came from the strong debut of Sim Lian’s Wandervale (EC) which cleared 292 units, Capitaland’s Cairnhill Nine (177 units sold) and Northern Resi’s Wisteria (125 units sold). 
  • Apart from these projects, sales for existing projects remained fairly strong at 734 units. 
  • Existing projects like Poiz and Kingsford Hillview Peak sold 59 and 43 units (recording take-up rates of 87% and 62% respectively). 
  • The executive condominium (EC) segment saw sales almost tripling, selling 843 units in Mar-16 (vs 301 units in Feb-16), boosted by Wandervale. 

YTD sales in CCR and OCR improved. 

  • YTD sales in CCR region almost tripled while OCR grew 45% boosted by the three projects. RCR recorded -32% y-o-y to 334 units. 
  • Demand for new launches to remain strong. Upcoming launches – The Strudee Residences, Jem at Toa Payoh – are likely to steal headlines again upon their expected launches in Apr-16 to May-16. 
  • Our recent showflat visits to Sturdee Residences, Cairhill Nine seem to suggest that there is buyer demand still in the current market for well-located projects at the fringe and central region, which are attractively priced as compared to surrounding projects. 

Potential pickup in volume on attractive prices. 

  • The recent launches showed some signs of improvement in property sentiment but we remain cautious given expectations of further price decline due to the risk of higher market vacancy rates and interest rates in the medium term. 
  • Amongst developers, City Dev remains a pick if sentiment improves especially if a potential relaxation of property policies materialize in the medium term. 
  • CAPL and FCL are attractive for their valuations and strategy to de-risk and pre-sell their existing unsold inventory.

Rachel Lih Rui Tan DBS Vickers | Derek Tan DBS Vickers | http://www.dbsvickers.com/ 2016-04-18
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