SINGAPORE (Nov 17): DBS Group Research is maintaining its view that the Singapore property market remains on a “modest correction path” while highlighting that developers trading at 0.75x P/NAV still remain attractive.

The research house’s top “buy” picks are City Developments Limited (CDL), CapitaLand and UOL Group at target prices of S$9.90, S$7.20 and S$3.60 respectively.

In a Wednesday note, analyst Derek Tan underscores these stocks for their diversified earnings streams with strong earnings visibility; strong balance sheets which imply “ample capital to deploy opportunistically”; as well as catalysts from asset-recycling activities.

October’s sales volume data for the sector has turned out to be one of the strongest for the current year, he adds.

To recap, the property sector’s Oct 2016 sales volume was up 87% y-o-y with more than half attributed to the new launches of Forest Woods and The Alps Residences, while executive condo (EC) sales grew 5% y-o-y.

“Among the EC sales, Sol Acres and The Terrace continue to be among the Top 5 selling projects, while The Trilinq was the other private project in the list, implying some clearance of the residential supply,” notes the analyst.

Although resale volume slowed down in the month of October, Tan points out that year-to-date (YTD) resale volume remains strong at 13%, with OUE Twin Peaks recording the highest sales at 21 units.

“We maintain our view that the Singapore property market remains on a modest correction path, mainly from the suburbs (homes in the Outside Central Region), while prices in the core central region (CCR) is slowly bottoming out,” he concludes.  

Shares of CDL, CapitaLand and UOL were trading at $8.34, $2.99 and $5.66 respectively at mid-morning trades today. —

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