Singapore Property Sector - DBS Research 2016-06-16: Volumes basing out

Singapore Property - DBS Research 2016-06-16: Volumes basing out CAPITALAND LIMITED C31.SI  CITY DEVELOPMENTS LIMITED C09.SI  UOL GROUP LIMITED U14.SI 

Singapore Property Sector - Volumes basing out

  • New launches (Gem & Stars of Kovan) boosted May sales
  • YTD launches and sales were flat
  • Interesting datapoint on upcoming Lake Grande
  • Expect property price to decline at a slower pace due to stable sales and low supply of land

New launches boosted May 2016 sales. 

  • May16 residential sales increased 8% y-o-y to 1,388 units. Once again, new property launches (Gem Residences & Stars of Kovan) boosted May 2016 sales of private homes by 64% y- o-y to 1,056 units. 
  • Gem Residences launched all 578 units and sold half during the month. 
  • Stars of Kovan launched 180 units out of total of 395 units and sold half. 
  • Excluding these projects, sales and launches rose 4% y-o-y and 17% y- o-y respectively. 
  • Sales for existing projects remain strong, i.e. Poiz continues to record top 5 sales in the month, selling 47 units (recorded take-up rates of 85%). 
  • There were no new executive condominiums (ECs) launched this month but sales volume remained strong, +58% y-o-y. YTD residential sales rose 27% y-o-y to 4,915 units led by sales in ECs (+147%). 
  • Private residential sales were flat y-o-y at 3,267 units.

RCR still showing strong sales volume. 

  • RCR continues to record strong sales volume (6x higher than sales in May 2015) during the month, mainly due to the two new launches. Sales volume in OCR increased 37% y-o-y while CCR fell 14%. YTD sales were mostly driven by properties sold in CCR and RCR.

Interesting datapoint on upcoming Lake Grande.

  • Upcoming launches – Lake Grande in the Jurong Lake district would be another key project to gauge the buyer’s sentiment in OCR.

Sales volume seems to have stabilised. 

  • YTD sales volume appears to have stabilised. With the government keeping land supply low, we believe the property prices will decline at a slower pace. A potential positive catalyst that could re- rate the sector is the relaxation of property policies.
  • We expect Singapore developers to continue diversifying their earnings base by expanding their geographic reach and focus on growing their commercial portfolios in order to build a recurring income base. 
  • We like developers with diversified and multiple income streams that will enable them to remain resilient in the current down-cycle. Picks are CAPL, City Dev, UOL Group.

Property Developer Stocks - DBS 2016-06-16

*CCR: Core Central Region
*RCR: Rest of Central Region
*OCR: Outside Central Region

Rachel Lih Rui TAN DBS Vickers | Derek TAN DBS Vickers | http://www.dbsvickers.com/ 2016-06-16
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