Singapore Industry Focus Singapore Property Refer to important disclosures at the end of this report DBS Group Research . Equity 8 Jan 2015 STI : 3,281.95 Year of Reckoning Analyst Modest growth prospects for Singapore property Derek TAN +65 6682 3716 market; sectors linked to external demand to do well
[email protected] Prefer Developers to S-REITs on valuations Mervin SONG CFA +65 6682 3715
[email protected] S-REITs – focus on growth rather than rate hikes Rachael TAN +65 6682 3713 Modest growth prospects; sectors linked to external The Singapore property market
[email protected] demand to outperform. will likely see a further downshift in growth in 2015 as prices STOCKS PICKS and rentals across major real estate subsectors feel the brunt Price Mkt Cap Target Price Yield (%) P/Bk of ongoing economic restructuring (Retail sector). In addition, (S$) demand/supply imbalance due to supply completion schedules 6/1/15 US$m S$ FY15F FY15F Rating is positive for Office prospects but result in a drop in rents and Developers prices in Industrial and Residential sector respectively. We CapitaLand 3.24 10,349 3.84 2.3% 0.8 BUY believe that the Hospitality sector will post a rebound in RevPARs as accommodation demand (mainly from China) REITs 1.75 1,294 1.86 6.8% 1.1 BUY picks up faster than supply growth. CDL Hospitality Trusts From a valuation Prefer Property Developers to S-REITs. Ascendas REIT 2.40 4,276 2.49 6.3% 1.2 BUY perspective, we prefer developers to S-REITs as we expect Capitamall Trust 2.06 5,245 2.12 5.5% 1.2 BUY valuations to normalize towards historical average of 0.90x Mapletree Greater 0.95 1,932 1.04 7.0% 0.9 BUY P/Bk NAV (vs 0.83x P/Bk NAV currently) while forward yield China Trust spreads at c.