Singapore’s residential property developers are now exploring overseas opportunities, on the back of slowing demand and increasing land prices, according to a UOB Kay Hian report in the media.
In recent months, a number of the country’s biggest developers have ventured into overseas properties, noted the report.
For instance, OUE has entered into a joint venture with Caesars Entertainment to develop an integrated resort and casino at Incheon in South Korea, CDL invested £152 million (S$322 million) in five freehold sites in the UK, while Ho Bee Land acquired an office development in London (pictured) for £171 million (S$362 million).
“Developers are deep in value but lack near-term catalysts. An analysis of the peak/trough P/B multiples in past cycles suggests that developers offer an attractive upside potential of 152 percent vs a downside risk of 39 percent. However, near-term newsflow from the residential segment is likely to be negative. The slowing residential demand and elevated land prices in Singapore are prompting developers to explore overseas land acquisition opportunities,” explained UOB Kay Hian.
Recent bids in government land tenders also indicate a cautiously optimistic stance among developers. Notably, developers’ participation rate moderated within the four to 12 range.
“Recent developer bids have been pricing in flattish to a 10 percent fall in property prices. Sites with overall quantum below S$200 million and with proximity to MRT stations have been heavily contested. Our channel checks with developers suggest a cautiously optimistic outlook for the property sector,” it added.
Muneerah Bee, Senior Journalist at PropertyGuru, edited this story. To contact her about this or other stories email muneerah@propertyguru.com.sg
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