• Preliminary Feb ’22 private home sales -27.2% MoM and -24.0% YoY primarily due to lack of major new launches, CNY and declining inventory of unsold new homes. Full February month data to be released in the middle of March.
   
• Commentary from Singapore developers during recently concluded earnings season pointed to positive home sales in 2021, with some moderation in residential sales post cooling measures in Dec ’21.
   
• The trio of City Dev, UOL Group and Frasers Property averaged 4.7% declines (vs. -7.2% for the STI) since the start of the geopolitical situation. Sector P/B is at -1 S.D. below the historical mean.

Preliminary February private home sales declined. Developers interest continue for suburbs land sites

According to caveats lodged with Urban Redevelopment Authority (URA), preliminary new private home sales sold by developers in February was at 490 units (excl. executive condominiums/EC), declining 27.2% MoM and 24.0% YoY. Analysts suggested the lack of major new launches, CNY, and declining inventory of unsold new homes were main reasons for the decline. Full data from URA will be released in the middle of March.

Separately, URA also announced the close of tender for two leasehold residential sites – Dairy Farm Walk and Bukit Batok West Avenue 8. Dairy Farm Walk saw 7 bids from developers with Sim Lian Group submitting the highest bid of S$347 million (or S$980 per plot ratio). Separately, the EC site at Bukit Batok West Avenue 8 saw 9 bids with the top bid coming from Qingjian Realty and Santarli Construction at S$266 million (or. S$662 per plot ratio), a record for an EC site. According to analysts, the tenders reflect developers’ interest for suburbs land sites.

Earnings update commentaries on Singapore residential market from largest listed developers

City Developments (C09)

• Singapore property sales momentum resilient in 2021 driven by sustained pent-up demand from seek for better homes and low interest rate environment
• Group and JV associates achieved highest annual property sales in history (2,185 units at S$4.3 billion total sales value)
• Construction activities in most project sites gradually improved thanks to more migrant workers being brought in
• Still sees healthy sales post implementation of property cooling measures but some homebuyers may take longer to assess situation before commitment of purchase
• With limited supply of new units in the market, expects buying interest to remain

UOL Group (U14)

• Property development saw the biggest revenue increase of 67% to S$1.6 billion on higher progressive revenue recognition from Venue South Residence, The Tre Ver, Clavon and The Watergardens at Canberra in Singapore and revenue recognition from sales of units at The Sky Residences in London
• Achieved healthy residential sales with 799 units booked in Singapore with value of c. S$1.53 billion (+30.8% YoY)
• Set of property cooling measures announced in December had a dampening effect on the residential market but do not expect a sharp price correction
• Sales of new private homes may moderate on back of cooling measures and limited pipeline of launches
   

Frasers Property (TQ5)

• Steady progress for current residential projects in Singapore with over 600 cumulative total units sold at 1Q FY22 (Dec quarter)
• Property cooling measures imposed may result in knee-jerk reaction and some easing of residential transactions
• Planning in progress for Bedok Point as provisional permission granted by URA for proposed redevelopment into a residential development with commercial units on the ground floor
   

Sector P/B valuation below -1 S.D. below historical mean

As articulated in SG Real Estate Sector Valuation Below Historical Mean Amidst Resilient Private Home Sales, Singapore real estate sector P/B is currently at -1 S.D. below the historical mean (see chart below).

Note: Hongkong Land (H78) is the largest weighted stock in the index. Singapore office and retail represented c. 18.9% of the group's completed investment properties (by land area) as of end December 2021