Property Development & Inventory - CGS-CIMB Research 2019-09-16: Aug Sales Holding Up

Property Development & Inventory - CGS-CIMB Research | SGinvestors.io UOL GROUP LIMITED (SGX:U14) CAPITALAND LIMITED (SGX:C31) CITY DEVELOPMENTS LIMITED (SGX:C09)

Property Development & Inventory - Aug Sales Holding Up




Robust home sale activity in Aug

  • Singapore developers sold a total of 1,167 new residential units in Aug 19 (+82% y-o-y, -25% m-o-m), inclusive of 45 executive condominium units. Excluding the latter, volume sales would have been 82% higher y-o-y but down c.5% m-o-m. The lower number of transactions translates into a sell through rate of 1.15x, based on the 979 units launched.
  • Suburban home sales made up 67% of total transactions with Parc Clematis, Florence Residences and Treasure at Tampines being the most popular projects, in terms of transaction volume.


Year to Aug volumes make up 60-70% of our 2019 projection

  • Year to Aug sales total of 6,755 units was ahead of the same period last year by 4.3%. We anticipate Sep volume sales to continue to be robust given the increased new launch activity such at the Avenue South Residences, Meyer Mansion and The Antares.
  • We maintain our expectation for sales volume to reach c.9,000-10,000 units for 2019, fairly flat on a y-o-y basis.


Private home prices to remain range-bound on ample supply

  • According to the Urban Redevelopment Authority (URA) property price index, primary home prices ticked up 1.3% q-o-q in 2Q19, led by city fringe projects, and are 0.6% higher than the 4Q18 level.
  • We think private residential prices would remain range-bound in the near term given ample supply from new launches and retain our projection for a 0-3% price hike for 2019.


Maintain Overweight; top picks UOL, CapitaLand, City Developments

  • We leave our Overweight stance on Singapore developers unchanged, given the current attractive valuations of 45% discount to RNAV.
  • A near-term catalyst would be good sell-through rates for new launches while downside risks would be weaker macroeconomic outlook which would dampen appetite for big-ticket purchases.





LOCK Mun Yee CGS-CIMB Research | https://www.cgs-cimb.com 2019-09-16
SGX Stock Analyst Report ADD MAINTAIN ADD 8.480 SAME 8.480
ADD MAINTAIN ADD 4.150 SAME 4.150
ADD MAINTAIN ADD 10.660 SAME 10.660



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