Brokers' Take
Singapore Property Developers
DBS GROUP RESEARCH, Nov 17
WE UPGRADED our calls on SC Global (TP: $1.69), Ho Bee (TP: $1.64) and
Wheelock (TP: $1.98), developers in the high-end segment of the market.
Our positive view on the high-end segment is driven by: visibility
of a higher number of transactions in Q3 2009 of more than $2,000 per
square foot; government policies tend to focus on the mass-market and
not on the high-end, thereby curbing policy risk for the latter; the
opening of the Integrated Resorts in early 2010 is expected to be
positive as this segment attracts the most investment demand, both from
foreigners and locals; Singapore high-end now looking relatively
cheaper to Hong Kong high-end, a similar valuation gap scenario that we
saw prior to the 2007 high-end run here, with Singapore high-end being
a potential beneficiary to Chinese demand; and the segment is less
sensitive to an expected increase in interest rates (though
historically, interest rate has never borne a strong correlation to
demand).