We filtered 15 Singapore Exchange (SGX)-listed real estate companies above $400 million in market cap for valuation. Table 1 summarises these 15 companies through market valuation ratios, balance sheet strength indicators and analysts’ sentiment.
Developers usually trade at significant discounts to their net asset values. This is often attributed to the illiquidity of their balance sheets. The top 15 developers by market capitalisation (see Table 1) have a net debt position with two exceptions. Listed companies trade at their book values based on how easily they can turn assets into cash.
In July this year, UOL Group announced the proposed sale of its Parkroyal Kitchener Hotel for $525 million. “The excess of the proceeds over the book value … is approximately $449,073,000,” the UOL announcement says. This may be why UOL’s share price this year has fallen the least, compared with GuocoLand (–4.4%), Frasers Property (–15%) and Hongkong Land (–23.7%). These three stocks appear to be undervalued compared to developers based on TES’s valuation approach.
