This project, the redevelopment of Fuji Xerox Towers, was held back due to the implementation of the 60% ABSD for foreigners.
DBS notes that performance within the core central regions has been mixed, with previous launches ranging from "very well-received" to those almost "fully sold".
According to DBS, Newport Residences’ key selling points include its rarity as a freehold development, with direct access to the future Prince Edward Road MRT Station on the Circle Line.
This project is likely to attract buyers who place less emphasis on school proximity or for investment purposes.
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"In our view, a 30-40% sell-through rate at launch would be very healthy," says DBS.
Given that there is no ABSD payable, holding costs for CDL are low, which allows it the flexibility to time its sales.
"Strong sell-through rates, underpinned by CDL’s core strength in property development, enhance income visibility and have historically been a catalyst for the group’s share price.
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"Given that this is a redevelopment of a long-time asset, margins are likely to be higher than usual at more than 20%, translating into a 3–4% uplift to RNAV," says DBS, which has kept its "buy" call and $11.80 target price.
As at 11.35 am, CDL's share price changed hands at $9.05, up 0.11%, extending a gain of 77.45% in the past year.
