Property
Post budget property launches

Last weekend, YTL Land saw a more subdued crowd at the launch of Block B Fennel@Sentul East condos (vs Block A & D launch in July). This marks one of the first few launches post-Budget 2014. Nevertheless, take-up was still a respectable 80% with selling price between RM700-850psf vs RM650-700psf previously, partly due to better view (KLCC-facing for some units). Absolute prices were from RM750k/unit onwards for 1081sf-1544sf built-up.

YTL Land continued to offer 54 months-DIBS (approval was obtained for the entire development previously) and early bird discount of 3-5%. There was no VIP preview this round (usually held a day earlier for staff and repeat buyers). YTL Land also increased its marketing efforts prior to launch with full-page print advertisements and e-mail blasts.

Selling points for the project include strategic location (<10km from KLCC), good connectivity (potential 2 MRT stations to be integrated with existing 2 LRT + 1 KTM stops), iconic building design & YTL’s strong execution track record. YTL Land still has 1 remaining block to launch for Fennel.

Meanwhile, Sunway also recently saw 85% take-up for Tower A & B Sunway Geo Residences launch in Bandar Sunway two weeks ago. Selling price after discount/rebates was RM760-860psf (10% early bird discount + 6% discount for non-DIBS). Built-up ranged between 829-1496sf with absolute price from RM766k/unit onwards. The project is a JV between Sunway and Mitsui Fudosan (Japan’s largest property developer by revenue).

We have expected property demand to soften post-Budget 2014 as sentiments are affected (at least in the short-term) by increased restrictions to curb speculation (15-30% RPGT from 10-15%, higher minimum price for foreigners, DIBS ban, more transparent pricing) and tighter bank lending. Demand for prime location, affordable housing and landed properties nevertheless should remain resilient. Our sector top picks are Pavilion REIT (Buy/ TP: RM1.60), Wing Tai Malaysia (Buy/ TP: RM2.90) and E&O (Buy/ TP:RM3.10). 

Source: HwangDBS Research - 19 Nov 2013