Singapore Residential Property

Jefferies strategist Chris Wood made an interesting comment in his 4Q21 Asia Maxima report. He expressed a bullish view on Singaporean residential property developers, quoting a 40% discount to book and rapidly improving fundamentals. Here is a short report on the sector to figure out whether his bullishness is warranted or not.

• Supply & demand for residential property is not necessarily out of sync. The 2009-2013 period was a bubble and should not be seen as a baseline.

• The retail, office and hospitality segments have suffered over the past two years due to cross-border travel restrictions, working from home during the pandemic and the threat from e-commerce. But several of these factors are one-off in nature.

• I see value in City Developments, given high-quality assets, excellent execution and an upside of almost +60% using reasonable assumptions.

• I’m also bullish on small-cap Bukit Sembawang, which sit on a valuable land bank and has won awards as one of the best property developers in Singapore.