Singapore Property Stocks - Maybank Kim Eng 2018-03-19: Building In Latest Enbloc Deals

Singapore Property Stocks - Maybank Kim Eng 2018-03-19: Building In Latest Enbloc Deals Singapore Property Market EnBloc Deals GUOCOLAND LIMITED F17.SI BUKIT SEMBAWANG ESTATES LTD B61.SI

Singapore Property Stocks - Building In Latest Enbloc Deals


Raising RNAVs and Target Prices for BS and GUOL 

  • Bukit Sembawang and GuocoLand emerged as the winners of two recent enbloc deals. This raises their exposure to the impending pick up in Singapore’s residential market. 
  • With stronger sales volume and ASPs achieved in the high-end market, we see scope for higher prices in the prime Orchard Road locale. Consequently, we raise our RNAVs and Target Prices for Bukit Sembawang and GuocoLand by 4% and 2% respectively. 
  • Trading at 40%+ discount to RNAV, these two mid-cap developers offer compelling valuation when compared to their large cap peers.



Bukit Sembawang acquires Katong Park Towers 

  • Bukit Sembawang has successfully tendered for Katong Park Towers. 
  • The redevelopment site is located in the East Coast and will be just 200m away from the future Katong Park MRT Station due to be completed in 2023. According to Cushman & Wakefield, the sale price of SGD345m translates into a land rate of SGD1,280 psf after taking into account SGD60m for the lease upgrading premium. This compares with SGD1,515 psf for Amber Park and SGD1,427 psf for Nanak Mansions. This reflects its leasehold status compared to freehold status for the other two sites.
  • Assuming an eventual ASP of SGD2,200 psf, we estimate a development surplus of 22 SGD cts for this project.
  • More @ Bukit Sembawang (BS SP) - Maybank Kim Eng 2018-03-19: Reloading On Condo Stock


GuocoLand JV acquires Pacific Mansion 

  • Separately, GuocoLand announced that it has taken a 40% stake in the redevelopment of Pacific Mansion. 
  • The freehold redevelopment site is located in the River Valley locale and near the company’s Martin Modern project. According to CBRE, the sale price of SGD980m translates into a land rate of SGD1,806 psf, including the bonus balcony area. This is a slight premium to the SGD1,733 psf paid for the Jiak Kim site sold in a recent government land tender. 
  • Assuming an eventual ASP of SGD3,200 psf, we estimate a development surplus of 6 SGD cts.
  • More @ GuocoLand (GUOL SP) - Maybank Kim Eng 2018-03-19: Raising Prime Residential Exposure


Tracking enbloc deals 

  • These two deals bring the total value of properties sold enbloc this year to SGD5.6b from 1.9k units. Together with the 3.4k units sold last year, a total of 5.3k households will be on the hunt for replacement homes in the year ahead and will be a key driver of housing sales. 
  • We reiterate our view that this resurgent enbloc will front-load demand and push-out supply in the market.







Derrick Heng CFA Maybank Kim Eng | http://www.maybank-ke.com.sg/ 2018-03-19
Maybank Kim Eng SGX Stock Analyst Report BUY Maintain BUY 3 Up 2.95
BUY Maintain BUY 8.550 Up 8.25



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