The most notable difference is their accounting policies. UOL, Ho Bee, most developers, and Singapore REITs (S-REIT) report fair value changes annually. CDL uses historical cost accounting, where assets are held at cost and then depreciated. Nonetheless, the high-interest rate environment has taken a slice off their valuations and earnings.
Local property companies are a diverse bunch. Some are not developers in the conventional sense. CapitaLand Investment’s (CLI) management, for instance, has plans to shrink its balance sheet to make it more liquid and raise ROE. The upside will likely be a large measure of sustained cash earnings through fee income.
The traditional developers UOL Group, City Developments Ltd (CDL) and Ho Bee Land (SGX:H13
) have varied strengths and weaknesses and these are now showing up even more so when their overseas assets have to be written down.
