Keppel Land's Singapore home sales tumbles to just over 120

Versus 1H12's 190-something units.

According to Maybank Kim Eng, in 9M12, KepLand has made SGD900m worth of new investments predominantly in China and Singapore. The firm sees Marina Bay Financial Centre Tower 3 as a possible candidate for monetisation in 2013, freeing up cash for further investments in these two key markets.

Sustained improvement in KepLand’s residential sales in China will underpin share price performance, in its view.

In the quarter, KepLand sold over 120 homes in Singapore, compared with the 190-odd units sold in 1H12. Bulk of the sales were from The Luxurie at Sengkang, where 92 units were sold in 3Q12. In China, KepLand sold ~290 units in the quarter, taking YTD sales there to around 980 units.

KepLand is still looking to launch 1,643 homes in China by the end of the year. On 16 Oct, barely eleven days after the Singapore government introduced the sixth round of cooling measures targeting the residential segment, KepLand put in the top bid of SGD434.6m, or SGD791 psf ppr for a condo site in Tanah Merah.

Here's more from Maybank Kim Eng:

We estimate the breakeven to be SGD1,250 psf - a price which projects nearby are commanding at the moment. The project's ASP is likely to be ~SGD1,400 psf for a thin pre-tax margin of 11% and RNAV accretion would be 4 cents/share.

DBS sets price benchmark for MBFC Tower 3. DBS recently announced that it is acquiring a 30% stake in Tower 3 from the JV between Hutchison Whampoa and Cheung Kong groups.

The transaction values the development at SGD2,555 psf - higher than our SGD2,400 psf estimate. We have adjusted our assumption to peg it at DBS’ benchmark price, which will add 7 cents/sh to KepLand’s RNAV for its one-third stake in the development.



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