Singapore Property | Given the market positions of City Developments Ltd. (CDL), they are estimated to be affected negatively by the new property cooling measures executed by the government. This is according to Vijay Natarajan, an analyst from RHBInvest.
Natarajan mentioned that they expect that the recent property round cooling measures will have an impact on the development and would have an effect on the price assumptions.
City Developments Limited has one of the biggest unsold residential inventories in Singapore with the numbers approaching the figures of 3,300 units. These numbers are reflecting its 25 percent revalued net asset or RNAV with Singapore contributing 51 percent of the assets of CDL. Furthermore, since Q1 2018, 63 percent of its revenue is has also been contributed by the city-state.
Amber Park, Handy Road, West Coast Vale, and Sumang Walk condominium are expected to feel the full swing of these new property curbs since these sites were picked up in higher prices as compared to its neighboring sites.
CDL’s latest project, The Tapestry at Tampines has currently retailed 315 of 450 units that was released back in its March launch for a 70 percent selling rate.
On the other hand, CDL’s assets have a 12 percent attributed to the United Kingdom as of Q1 whereas China holds 10 percent of it, and finally, the United States with 8 percent in total.
However, due to recent developments in the ‘Brexit’ move, on a short-term, the view for City Development Limited’s future is not entirely visible.
All in all, CDL will have to do everything in its power to keep itself afloat atop these new property cooling measures and one way to do that is to reduce unit prices. With that said, around 5-10 percent in unit price reduction is expected within the coming months.