With external volatility being a major concern, the risk appetite for investors is expected to remain low in the near term, noted DBS.
Additionally, developers are likely to exercise caution when selecting sites and making land bids.
“With the ongoing global uncertainties, property stocks have retreated from their year high and are trading at a 37 percent discount to RNAV or at –1SD to mean level,” DBS said.
Furthermore, “investors’ risk appetite in the near term will remain low due to external volatility”, even when much of the valuations have factored in the cautious outlook.
“Our strategy in the developer space would be to prefer those with a diversified property segment exposure such as CapitaLand and UOL as well as those with lower residential activities and are market players in their niche such as CMA and GLP,” added DBS.
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