At the same time, the lower interest rate environment and resilient underlying demand for private new homes are also fuelling the strong pre-sales figures in Singapore’s residential projects, which in turn offer robust income visibility for developers in the years to come.
The share prices of Singapore’s various real estate developers are in positive territory year-to-date. The positive gains are attributable to the ongoing capital market reforms and various initiatives done by developers to unlock value and boost returns for shareholders.
In its Oct 7 note, DBS Group Research flags that despite the run-up thus far this year, developers continue to trade at just half their book value, or a 60% discount to their revalued net asset value. “The recent divestment of MCL Land, a household name, to Sunway Group by Hongkong Land at book value serves as another data point indicating that current sector discounts are unwarranted,” state analysts Derek Tan and Tabitha Foo.
