Singapore Property - Maybank Kim Eng 2016-06-08: 2H16 Government Land Sales ~ Little Surprise

Singapore Property - Maybank Kim Eng Research 2016-06-08: 2H16 GLS ~ Little Surprise Singapore Property WING TAI HLDGS LTD W05.SI  HO BEE LAND LIMITED H13.SI  CAPITALAND LIMITED C31.SI  CITY DEVELOPMENTS LIMITED C09.SI 

Singapore Property: 2H16 GLS - Little Surprise

Little surprise from 2H16 GLS programme

  • We see no major stock implications from the 2H16 GLS announcement
  • Residential land supply remains fairly tight and there is no direct competition to projects under development for the companies under our coverage. 
  • It appears that the government is cognizant of the supply glut across all property segments and is keeping land sales on the confirmed list tight. This should keep demand-supply in check in the medium term. Various sites on the reserve list are made available for developers to trigger if they deem there is sufficient demand. 
  • Maintain POSITIVE view on property developers. Top pick is sector laggard CapitaLand.

Slight increase in residential supply

  • The government announced the 2H16 Government Land Sales (GLS) programme. There is a slight increase in the number of residential units on the confirmed list, but we opine that overall supply of residential land remains fairly limited. 
  • Under the 2H16 confirmed list, 2,170 private homes will be sold. No EC site is on it. This compares with the 925 private homes and 635 ECs on the 1H16 confirmed list and a 570-unit private home site that was triggered by Chip Eng Seng (Not Rated) from the reserve list.
  • The four land parcels on the confirmed list are located in the Outside Central Region and Rest of Central Region. This implies that prime residential supply will remain limited. Two land parcels (Fernvale Road and West Coast Vale) were shifted to the confirmed list from the 1H16 reserve list and two new land parcels (Perumal Road and Upper Serangoon Road) were introduced to the confirmed list. Another two new residential sites (Serangoon North and Toh Tuck Road) were added to the five remaining sites on the reserve list.

Commercial sites remain available on reserve list; No hotel sites introduced

  • The 15,500 sm of commercial space available on the confirmed list is mainly from the Upper Serangoon Road residential site. 
  • Three land parcels for large commercial developments — Beach Road, Woodlands Square and Central Boulevard (white site) — remain on the reserve list. The residential and commercial site at Holland Road is still available on the reserve list. Unless developers trigger any of these sites, office and retail supply will remain limited beyond 2018. 
  • No hotel sites were introduced.

Derrick Heng CFA Maybank Kim Eng | http://www.maybank-ke.com.sg/ 2016-06-08
Maybank Kim Eng SGX Stock Analyst Report HOLD Maintain HOLD 1.93 Same 1.93
BUY Maintain BUY 2.47 Same 2.47
BUY Maintain BUY 3.95 Same 3.95
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