Global Research
Singapore Residential
18 August 2014
Equities
July: Do you live in the East?
Singapore Real Estate
July home sales remained sluggish amidst fewer launches Buying activity remained muted in July, with 484 private residential units sold (excluding executive condos), flat versus June as developers continued to hold back their launch plans. Four new condo projects totalling 619-units were launched in month, with an average take-up rate of 22%. The top selling project in the month was City Gate, a 311-unit project located in the city fringe, with 89-units sold at S$1,809psf. High-end residential projects (≥ S$2,000psf) saw an improvement in buying interest, forming 16.5% of the total non-EC sales, versus an average of 7.5% since 2012.
Michael Lim Analyst
[email protected] +65-6495 5902
Robin Xie Analyst
[email protected] +65-6495 2708
Bonanza for those in proximity to the TEL Line, completion in 10 years though The Land Transport Authority (LTA) announced locations of the train stations for the 13km East Coast stretch of the Thomson-East Coast Line (TEL). The rail system will be fully underground, with 9 stations in total. Construction will commence in 2016 and complete by 2023-2024, boosting connectivity to the CBD and the Changi Business Park area, while alleviating congestion on the existing East-West Line. We estimate that asset values of mass/mid-market residential projects adjacent to train stations are typically 10-20% higher than comparable ones located >1km away. As such, over time we expect a divergence of property values around the newly announced TEL station locations (see Pages 3-5 for station maps). Upcoming condo launches by UOL Group & CapitaLand well-timed We believe the announcement of the TEL station locations could provide tailwinds for new property launches in the vicinity. In particular, UOL Group's upcoming condo launch Seventy St. Patrick's will be immediately next to Marine Terrace station (see Figure 10), and we believe this will enhance buying interest in the project. Similarly, CapitaLand's Marine Blue condo will be next to Marine Parade station (see Figure 9), which we believe could help the project fetch a higher selling price. Sector picks: Prefer diversified developers over residential pure plays We like UOL and CapitaLand for their diversified earnings and restructuring potential.
Figure 1: Private resi primary sales volumes (ex-ECs)
Figure 2: Eastern stretch of the Thomson-East Coast line
3,000 2,500 2,000 1,500 1,000 500 -
Jan Feb Mar Apr May Jun 2012
2013
Source: URA, UBS
Jul Aug Sep Oct Nov Dec 2014 Source: Land Transport Authority (reproduced with permission)
www.ubs.com/investmentresearch
This report has been prepared by UBS Securities Pte. Ltd. (Reg. No. 198500648C). ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 16. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
July private home sales flat vs June
July home sales remained sluggish amidst fewer launches. Buying activity remained muted in July, with 484 private residential units sold (excluding executive condos), flat versus June as developers continued to hold back their launch plans. Four new condo projects totalling 619-units were launched in month, with an average take-up rate of 22%.
Top selling projects. The top selling project in July was the newly launched City Gate, a mid/high-end project located in the city fringe, developed by Fragrance Group & World Class Land (a subsidiary of Aspial Corp). 29% of the project's 311-units were sold at a median price of S$1,809psf, which we think was reasonable given current market conditions. All in, the top 5 projects formed 40.3% of total non-EC sales.
Figure 3: Top selling projects in July 2014 Total units
% of total
Units sold
Median price
sold to-date
units sold
in July
(S$psf)
311
89
29%
89
1,809
Bukit Sembawang
158
158
100%
37
2,113
Marne Road
Goodland Group
54
23
43%
23
1,585
The Panorama
Ang Mo Kio Avenue 2
Wheelock Properties
698
223
32%
23
1,231
Coco Palms
Pasir Ris Grove
CDL, Hong Leong, Hong Realty
944
657
70%
23
982
Waterwoods EC
Punggol Field Walk
UE E&C Group, Sing Holdings
373
236
63%
23
807
Project Name
Location
Developer
Total units
City Gate
Beach Road
World Class Land, Fragrance Group
The Vermont on Cairnhill
Cairnhill Rise
The Citron Residences
Note: Sorted by units sold in July. Source: URA, UBS
Improvement in high-end residential sales. High-end new home sales (units ≥ S$2,000psf) saw a MoM improvement, with 80 units sold during the month of July. The top selling project in this segment was Bukit Sembawang's The Vermont on Cairnhill, where the last 37 units of the project were sold at a median price of S$2,113psf. Meanwhile, Guocoland's Clermont Residence recorded the highest selling price in July, with 1 unit sold at S$3,244psf. All in, high-end sales formed 16.5% of the total non-EC sales, higher compared to an average of 7.5% since January 2012. Figure 5: Top 5 projects as a % of total sales (ex-ECs)
Non-EC units ≥ S$2,000psf
Non-EC units < S$2,000 psf
Source: URA, UBS
Singapore Residential 18 August 2014
1,000
40%
800
30%
600
20%
400
10%
200 0
Top 5 unit sales (RHS)
Jul-14
Jun-14
Apr-14
May-14
Mar-14
Jan-14
Feb-14
0% Dec-13
Jul-14
Apr-14
Jan-14
Oct-13
Jul-13
Apr-13
Jan-13
Oct-12
Jul-12
Apr-12
Jan-12
0%
50%
Oct-13
5%
1,200
Nov-13
10%
1,400
60%
Sep-13
15%
1,600
70%
Jul-13
20%
80%
Aug-13
25%
Jun-13
Figure 4: High-end sales as a % of total sales (ex-ECs)
May-13
Top 5 % of total sales (LHS)
Source: URA, UBS
2
Thomson-East Coast station locations Construction for the 13km East Coast stretch of the Thomson-East Coast Line (TEL) will commence in 2016 and complete by 2023-2024. Capital values of mass/midmarket residential projects adjacent to train stations are typically at a 10-20% premium to those located more than 1km away. As such, over time we expect to see a divergence of property values around the newly announced TEL station locations. Figure 6: Tanjong Rhu station (TE23)
Figure 7: Katong Park station (TE24)
Source: LTA
Source: LTA
Figure 7: We think the developer of the freehold 130-unit The Line @ Tanjong Rhu is likely to remarket the project given its accessibility to the Katong Park station. To date, only 32% of the project is sold with a last transacted price of S$2,100psf in 2013.
Figure 8: Amber station (TE25)
Figure 9: Marine Parade station (TE26)
Source: LTA
Source: LTA, UBS
Figure 8: The freehold 109-unit Amber Skye by China Sonangol Land was recently launched in June. To date, 5 units have been sold at an average pricing of S$1,800psf.
Figure 9: The Marine Parade station is located near retail amenities like 112 Katong owned by Perennial Katong Retail Trust (major shareholders Alpha Partners and Breadtalk Group), and Parkway Parade owned by Parkway Parade Partnership Limited Fund (managed by Lend Lease), and would be supportive of
Singapore Residential 18 August 2014
3
retail capital values. CapitaLand intends to launch the 124-unit freehold Marine Blue in the coming months, and we believe the established retail offering and now proximity to the TEL station should fuel buyer interest in the project. Figure 10: Marine Terrace station (TE27)
Figure 11: : Siglap station (TE28)
Source: LTA, UBS
Source: LTA
Figure 10: Kudos to the management of UOL for having repeat success at securing sites at upcoming stations. In 2012, UOL secured a Bright Hill Drive site (now Thomson Three condo) just before the stations for the Thomson MRT line was announced. The 445-unit Thomson Three is now 92% sold since its September 2013 launch. Like before, we think the announcement of the Marine Terrace station will facilitate take-up for UOL's 186-unit Seventy St. Patrick's. Figure 12: Bayshore station (TE29)
Figure 13: Bedok South station (TE30)
Source: LTA
Source: LTA
Singapore Residential 18 August 2014
4
Figure 14: Sungei Bedok station (TE31 / DT37)
Source: LTA
Sector picks We prefer diversified developers over pure residential developers. Our top picks are UOL Group and CapitaLand for their diversified earnings, mid-term restructuring potential, and attractive valuations.
Singapore Residential 18 August 2014
5
Appendix Figure 15: Resale transactions (S$ psf) Project
Q213
MARINA BAY RESIDENCES
3,080
-
3,092
-
2,100
1,900
THE CLIFT
2,424
2,352
-
REFLECTIONS AT KEPPEL BAY
1,803
1,931
2,134
ONE SHENTON
Q313
Q413
Q214
QoQ
YoY
3,017
2,538
-16%
-18%
1,958
1,925
-2%
NA
2,413
1,931
-20%
-20%
1,770
1,959
11%
9%
Q114
-
2,129
-
2,114
2,044
-3%
NA
THE SAIL @ MARINA BAY
2,026
2,152
2,072
2,310
2,023
-12%
0%
HELIOS RESIDENCES
3,418
3,566
3,262
2,964
2,835
-4%
-17%
PATERSON SUITES
2,596
-
2,150
-
-
NA
NA
THE COSMOPOLITAN
2,127
2,062
2,077
1,995
-
NA
NA
ARDMORE PARK
THE TRILLIUM
3,311
3,293
3,640
-
3,016
NA
-9%
ARDMORE II
-
-
2,896
-
-
NA
NA
YONG AN PARK
-
1,858
-
-
-
NA
NA
MELROSE PARK
1,736
1,823
-
-
-
NA
NA
High-end average
2,502
2,327
2,580
2,318
2,284
-1%
-9%
SOLEIL @ SINARAN
1,776
2,074
1,967
2,047
-
NA
NA
CARIBBEAN AT KEPPEL BAY
1,648
1,637
1,654
1,563
1,618
4%
-2%
ONE-NORTH RESIDENCES
1,439
1,637
1,423
-
1,289
NA
-10%
ASPEN HEIGHTS
1,610
1,600
1,575
1,538
1,501
-2%
-7%
VALLEY PARK
1,593
1,569
1,480
1,529
1,469
-4%
-8%
1,641
-
1,678
1,731
1,831
6%
12% -8%
WATERMARK ROBERTSON QUAY RESIDENCES @ EVELYN
1,836
-
1,871
1,750
1,685
-4%
SKY@ELEVEN
1,752
1,577
-
1,685
1,615
-4%
-8%
COSTA RHU
1,285
1,246
1,408
1,474
1,255
-15%
-2%
COTE D'AZUR
1,222
1,158
1,251
1,246
1,276
2%
4%
THE SEAFRONT ON MEYER
1,751
-
1,675
1,802
1,594
-12%
-9%
Mid-end average
1,596
1,562
1,598
1,637
1,513
-8%
-5%
-
1,199
1,207
1,194
1,112
-7%
NA
1,184
-
1,074
-
1,295
NA
9%
DOUBLE BAY RESIDENCES CASPIAN
-
-
1,072
985
1,048
6%
NA
CITYLIGHTS
1,747
1,622
1,622
1,620
1,539
-5%
-12%
THE TREVOSE
1,508
1,386
1,384
-
1,298
NA
-14%
KOVAN MELODY
1,120
1,227
1,167
1,061
1,133
7%
1%
THE GARDENS AT BISHAN
1,085
1,089
1,076
-
980
NA
-10%
THE ESTUARY
SIGNATURE PARK
1,079
1,088
1,089
1,065
1,034
-3%
-4%
THE LAKESHORE
1,193
1,192
1,177
1,130
1,064
-6%
-11%
844
874
865
780
840
8%
0%
DAKOTA RESIDENCES
1,432
1,405
1,485
1,392
1,260
-9%
-12%
THE ARTE
1,249
1,324
1,517
-
1,440
NA
15%
Mass market average
1,244
1,240
1,228
1,153
1,170
-6%
0%
ROSEWOOD
Resale prices for the various private residential segments are as follows – High-end: -9% YoY Mid-range: -5% YoY Mass-market: 0% YoY
Source: URA, UBS estimates
Singapore Residential 18 August 2014
6
Figure 16: Rents (S$ psf/month) and yields (%) at Q214 Q214
Q214
Q214
QoQ
QoQ
QoQ(bps)
Rent
Price
Yield
Rent
Price
Yield
TANGLIN PARK
4.07
1,873
2.6%
-4%
9%
-35
MARINA BAY RESIDENCES
6.07
2,538
2.9%
0%
-16%
46
THE CLIFT
7.91
1,931
4.9%
0%
-20%
98
THE SAIL @ MARINA BAY
6.02
2,023
3.6%
-2%
-12%
37
VISIONCREST
6.43
2,112
3.7%
-1%
3%
-16
RIVERGATE
5.30
2,059
3.1%
2%
-2%
10
THE TRILLIUM
4.86
2,044
2.9%
-5%
-3%
-5
ST THOMAS SUITES
4.67
1,876
3.0%
0%
-1%
2
PARK INFINIA AT WEE NAM
5.13
1,837
3.3%
-1%
4%
-19
REFLECTIONS AT KEPPEL BAY
5.00
1,959
3.1%
-2%
11%
-41
PARC EMILY
4.98
1,594
3.7%
-1%
-8%
25
REGENCY PARK
3.70
1,764
2.5%
0%
0%
1
SOUTHBANK
5.38
1,655
3.9%
-4%
1%
-23
MIRAGE TOWER
4.43
1,630
3.3%
3%
1%
8
CITY SQUARE RESIDENCES
4.41
1,500
3.5%
-7%
1%
-33
SOMMERVILLE PARK
3.50
1,576
2.7%
-4%
6%
-28
CARIBBEAN AT KEPPEL BAY
5.29
1,618
3.9%
-4%
4%
-32
ASPEN HEIGHTS
3.93
1,501
3.1%
-2%
-2%
2
VALLEY PARK
3.70
1,475
3.0%
0%
-4%
11
THE TESSARINA
3.34
1,461
2.7%
-7%
1%
-25
AMARYLLIS VILLE
5.06
1,516
4.0%
-3%
-3%
1
TANGLIN REGENCY
4.20
1,345
3.7%
-3%
-2%
-3
CITYLIGHTS
5.31
1,539
4.1%
1%
-5%
26
RIDGEWOOD
3.02
1,233
2.9%
7%
3%
10
Average – prime
4.82
1,736
3.3%
-2%
-1%
1
RIVER PLACE
4.58
1,424
3.9%
-8%
10%
-73
QUEENS
4.22
1,281
3.9%
0%
5%
-19
THE ANCHORAGE
3.03
1,301
2.8%
-8%
-1%
-20
HERITAGE VIEW
3.77
1,156
3.9%
-7%
-3%
-19
DOVER PARKVIEW
3.53
1,172
3.6%
-8%
0%
-29
BLUE HORIZON
3.75
1,055
4.3%
-2%
-5%
13
NORMANTON PARK
2.83
925
3.7%
-2%
-6%
15
PARK WEST
3.00
753
4.8%
0%
-16%
77
TREVISTA
4.03
1,352
3.6%
-4%
1%
-18
THE WATERSIDE
2.81
1,368
2.5%
0%
9%
-22
WATER PLACE
3.68
1,276
3.5%
-3%
4%
-23
PEBBLE BAY
3.59
1,368
3.1%
-2%
4%
-20
THE MAKENA
2.94
1,359
2.6%
-5%
7%
-31
SANCTUARY GREEN
3.92
1,126
4.2%
0%
-16%
67
COSTA RHU
3.16
1,255
3.0%
-7%
-15%
27
COTE D'AZUR
4.01
1,276
3.8%
-1%
2%
-15
MANDARIN GARDEN CONDO
3.06
982
3.7%
-15%
-9%
-29
VILLA MARINA
3.14
961
3.9%
-2%
7%
-35
ONE AMBER
3.90
1,305
3.6%
2%
-8%
35
THE SEAFRONT ON MEYER
3.72
1,594
2.8%
1%
-12%
35
Project
Singapore Residential 18 August 2014
Rental yields for the prime, mid and mass segments are at 3.3%, 3.4% and 3.7% respectively.
7
THE ESTA
3.66
1,375
3.2%
-3%
-2%
-4
MAPLEWOODS
2.99
1,226
2.9%
-1%
-19%
53
PANDAN VALLEY
2.59
1,068
2.9%
11%
0%
29
CLEMENTI PARK
2.67
1,062
3.0%
-4%
-2%
-7
THE HILLSIDE
2.50
1,013
3.0%
-3%
-16%
38
SIGNATURE PARK
2.37
1,034
2.7%
-1%
-3%
8
SPRINGDALE CONDO
2.66
1,090
2.9%
-6%
-4%
-6
PARC PALAIS
2.36
991
2.9%
-4%
-3%
-5
THE CASCADIA
3.97
1,700
2.8%
4%
2%
7
Average – mid
3.32
1,202
3.4%
-3%
-3%
1
SIMSVILLE
2.98
953
3.7%
-4%
-1%
-12
DAKOTA RESIDENCES
3.96
1,260
3.8%
4%
-9%
49
THE SUNNY SPRING
3.07
972
3.8%
-3%
3%
-23
COSTA DEL SOL
3.63
1,311
3.3%
-4%
-5%
6
BAYSHORE PARK
3.38
1,013
4.0%
-1%
-8%
30
THE BAYSHORE
3.06
1,001
3.7%
-3%
-3%
-1
CASA MERAH
3.43
1,155
3.6%
-4%
-4%
-1
EDELWEISS PARK CONDO
2.88
904
3.8%
4%
10%
-22
ESTELLA GARDENS
2.37
1,036
2.7%
-23%
16%
-140
CARISSA PARK CONDO
2.77
928
3.6%
6%
7%
-2
BALLOTA PARK CONDO
2.14
783
3.3%
-8%
-7%
-5
EASTPOINT GREEN
3.01
970
3.7%
-3%
7%
-37
NV RESIDENCES
3.21
1,155
3.3%
4%
3%
4
MELVILLE PARK
2.78
757
4.4%
2%
-2%
20
KOVAN MELODY
3.62
1,133
3.8%
0%
7%
-26
CHUAN PARK
2.44
981
3.0%
-3%
0%
-10
COMPASS HEIGHTS
3.19
795
4.8%
-1%
-11%
48
PARC OASIS
2.77
906
3.7%
-1%
-2%
6
THE LAKESHORE
3.57
1,071
4.0%
-3%
-5%
11
PARC VISTA
2.75
938
3.5%
-3%
-3%
0
THE CENTRIS
3.68
1,128
3.9%
-5%
-13%
30
MAYSPRINGS
2.40
860
3.4%
-14%
5%
-74
GUILIN VIEW
2.78
894
3.7%
-10%
-4%
-22
REGENT HEIGHTS
2.69
866
3.7%
-4%
-5%
4
REGENT GROVE
2.37
790
3.6%
-7%
-4%
-12
NORTHVALE
2.48
827
3.6%
-2%
5%
-25
MI CASA
2.84
940
3.6%
1%
-3%
13
BULLION PARK
3.04
1,009
3.6%
-8%
-3%
-21
CASTLE GREEN
2.92
859
4.1%
-7%
0%
-30
ORCHID PARK CONDO
2.53
731
4.2%
-7%
-6%
-2
Average – mass
2.93
967
3.7%
-4%
-1%
-8
Source: URA, UBS estimates
Singapore Residential 18 August 2014
8
Residential chart book Prices Figure 17: Median launch prices (monthly update) 3,000 2,500 2,000 1,500 1,000 500
Prime
Mid
2014/01
2013/01
2012/01
2011/01
2010/01
2009/01
2008/01
2007/01
2006/01
2005/01
2004/01
2003/01
2002/01
2001/01
2000/01
1999/01
1998/01
1997/01
1996/01
1995/01
-
Mass
Source: URA, UBS estimates
Figure 18: Median resale prices (monthly update) 2,000 1,800 1,600 1,400 1,200 1,000 800 600
\
400 200
Prime
Mid
2014/02
2013/02
2012/02
2011/02
2010/02
2009/02
2008/02
2007/02
2006/02
2005/02
2004/02
2003/02
2002/02
2001/02
2000/02
1999/02
1998/02
1997/02
1996/01
1995/01
-
Mass
Source: URA, UBS estimates
Figure 19: Premium between new and resale prices (monthly update) 70% 60% 50% 40% 30% 20% 10%
Prime
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
0%
Mass
Source: URA, UBS estimates
Singapore Residential 18 August 2014
9
Singapore Residential 18 August 2014 2,000
1,500
1,000
500
Mar-07
Mar-06
Mar-05
Mar-04
Mar-03
Mar-02
Mar-01
Mar-00
Mar-99
Mar-98
Mar-97
Mar-96
Mar-95
Mar-94
Mar-93
Mar-92
Mar-14
Mar-13
Mar-12
Mar-11
Mar-10
2014/01
2,500
2014/02
Figure 22: Resale volume (monthly update) 2013/01
Source: URA, UBS estimates
2013/02
New sale 2012/01
500
2012/02
1,000
2011/01
1,500
2011/02
2,000 Mar-09
2,500
2010/01
Figure 21: New sale volume (monthly update)
2010/02
Volumes Mar-08
Source: URA, UBS estimates
2009/02
2008/01
2007/01
GDP growth
2009/01
2008/02
2007/02
2006/01
2005/01
2004/01
2003/01
2002/01
2001/01
2000/01
1999/01
1998/01
1997/01
Price change
2006/02
2005/02
2004/02
2003/02
2002/02
2001/02
2000/02
1999/02
1998/02
1997/02
1996/01
1995/01
0
1996/01
1995/01
Figure 20: YoY Residential price index vs GDP (Quarterly update) 60%
40%
20%
0%
-20%
-40%
Resale
Source: URA, UBS estimates
10
Rents and yields Figure 23: Median rents (monthly update) 5.0 S$ psf pm
4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0
Prime
Mid
2014Q2
2013Q3
2012Q4
2012Q1
2011Q2
2010Q3
2009Q4
2009Q1
2008Q2
2007Q3
2006Q4
2006Q1
2005Q2
2004Q3
2003Q4
2003Q1
2002Q2
2001Q3
2000Q4
2000Q1
0.5
Mass
Source: URA, UBS estimates
Figure 24: Gross yield (median rent/median resale price, monthly update) 6.0% 5.0% 4.0% 3.0% 2.0% 1.0%
Prime
Mid
Mass
2014Q2
2013Q3
2012Q4
2012Q1
2011Q2
2010Q3
2009Q4
2009Q1
2008Q2
2007Q3
2006Q4
2006Q1
2005Q2
2004Q3
2003Q4
2003Q1
2002Q2
2001Q3
2000Q4
2000Q1
0.0%
3-mth SIBOR
Source: URA, UBS estimates
Figure 25: Private housing rental index and vacancy rate (quarterly update) 170
12%
160
10%
150 140
8%
130
6%
120 110
4%
100
2%
90
Rental index
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
0% 1990
80
Vacancy rate (RHS)
Source: URA, UBS estimates
Singapore Residential 18 August 2014
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Figure 26: Gross rental yields in public and private housing (quarterly update) 9% 8% 7% 6% 5% 4% 3% 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14
2%
3-rm HDB
4-rm HDB
5-rm HDB
Mass condo
Source: HDB, URA, UBS estimates
Demand outlook Figure 27: Job creation and population inflows in FY-end June (yearly update) 300 250 200 150 '000
100 50 (50)
Jobs created
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
(100)
Population inflow
Source: Ministry of Manpower, Singapore Department of Statistics
Figure 28: Jobs created in thousands (quarterly update) 80 70 60 50 40 30 20 10 0 (10)
I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II
(20) (30)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 2014
(40) Source: Ministry of Manpower
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Figure 29: Net weighted percentage of firms that expects to increase employment 70 60 50 40 30 20 10 0 (10) (20) (30) (40) I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III 2006
2007
2008
Financial
2009
2010
Business Services
2011
IT
2012
2013
Wholesale/retail
2014
Manufacturing
Source: Singapore Department of Statistics
Figure 30: Nominal gross monthly wage YOY growth (quarterly update) 15% 10% 5% 0% -5% -10% I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2003
2004
2005
2006
2007
Total
2008
2009
Manufacturing
2010
2011
2012
2013
Financial
Source: Ministry of Manpower
Supply outlook Figure 31: Total housing units completion (Quarterly update) 68,500
90,000
35,000
51,200
48,200 27,000
20,200
26,100
21,200
13,500
9,500
6,500 2007
13,100
6,700
16,300 2004
10,000
2006
17,000
15,800
20,000
2003
44,800
30,000
2002
29,200
40,000
37,200
50,000
35,000
60,000
43,500
70,000
48,900
80,000
Public
2017E
2016E
2015E
2014E
2013
2012
2011
2010
2009
2008
2005
2001
2000
1999
1998
1997
1996
0
Private
Source: MND, HDB, URA, UBS estimates
Singapore Residential 18 August 2014
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Figure 32: Private housing completions in the pipeline (Quarterly update) 25,000
20,000
300
1,471
4,112
6,663
15,000
5,835
10,000
17,536
965
4,502
15,742
9,793
5,000 7,101
6,543
1,392 716
2014
2015
2016
Sold, under const
2017
Unsold, under const
2018
Not started yet
Source: URA, UBS estimates
Figure 33: Private housing supply (landbank) in the pipeline (Quarterly update) 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000
Pipeline supply w/o PreQ
Unsold supply with PreQ
2013
Q2'14
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
-
Unsold completed units
Source: URA, UBS estimates
Figure 34: Private housing supply in the pipeline (quarterly update) 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Unsold units ready for sale
Units seeking approval 3-qtr lag
Source: URA, UBS estimates
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Figure 35: Supply from confirmed list and triggered reserve list sites (bi-annual) 16,000 Units avail on Reserve List
14,000
Units avail on Confirmed List
12,000
Total units released - Confirmed list and sites triggered
10,000 8,000 6,000 4,000 2,000
H214
H114
H213
H113
H212
H112
H211
H111
H210
H110
H209
H109
H208
H108
H207
H107
H206
H106
H205
H105
H204
H104
H203
H103
H202
H102
0
Source: HDB, URA, UBS estimates
We would like to thank Ujjwal Sood, an employee of Evalueserve, for his assistance in preparing this research report. Evalueserve staff provide research support services to UBS.
Statement of Risk The risks for the Singapore residential market include the growth pace of the Singapore and global economy, mortgage rates, and policy measures which could affect demand and prices for residential units.
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Required Disclosures This report has been prepared by UBS Securities Pte. Ltd., an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are referred to herein as UBS. For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical performance information; and certain additional disclosures concerning UBS research recommendations, please visit www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance is not a reliable indicator of future results. Additional information will be made available upon request. UBS Securities Co. Limited is licensed to conduct securities investment consultancy businesses by the China Securities Regulatory Commission. Analyst Certification: Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers and were prepared in an independent manner, including with respect to UBS, and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report. UBS Investment Research: Global Equity Rating Definitions 12-Month Rating
Definition
Coverage1
IB Services2
Buy
FSR is > 6% above the MRA.
48%
33%
Neutral
FSR is between -6% and 6% of the MRA.
41%
30%
Sell
FSR is > 6% below the MRA.
11%
23%
Short-Term Rating
Definition
Coverage3
IB Services4
Buy
Stock price expected to rise within three months from the time the rating was assigned because of a specific catalyst or event.
less than 1%
less than 1%
Sell
Stock price expected to fall within three months from the time the rating was assigned because of a specific catalyst or event.
less than 1%
less than 1%
Source: UBS. Rating allocations are as of 30 June 2014. 1:Percentage of companies under coverage globally within the 12-month rating category. 2:Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided within the past 12 months. 3:Percentage of companies under coverage globally within the Short-Term rating category. 4:Percentage of companies within the Short-Term rating category for which investment banking (IB) services were provided within the past 12 months. KEY DEFINITIONS: Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12 months. Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a forecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected nearterm (up to three months) performance of the stock and do not reflect any change in the fundamental view or investment case. Equity Price Targets have an investment horizon of 12 months. EXCEPTIONS AND SPECIAL CASES: UK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure, management, performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell: Negative on factors such as structure, management, performance record, discount. Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's debt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating. When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece. Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are not registered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained in the NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by a research analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report, if any, follows. UBS Securities Pte. Ltd.: Michael Lim; Robin Xie.
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Company Disclosures Company Name
Reuters
12-month rating
Short-term rating
Price
Price date
CapitaLand Ltd.
CATL.SI
Buy
N/A
S$3.33
15 Aug 2014
UOL Group
UTOS.SI
Buy
N/A
S$6.40
15 Aug 2014
Source: UBS. All prices as of local market close. Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricing date Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report. CapitaLand Ltd. (S$) Stock Price (S$)
Price Target (S$) 6.00 5.00 4.00 3.00 2.00 1.00
01-Jan-14
01-Apr-14
01-Jul-14
01-Jan-14
01-Apr-14
01-Jul-14
01-Oct-13
01-Jul-13
01-Apr-13
01-Jan-13
01-Oct-12
01-Jul-12
01-Apr-12
01-Jan-12
01-Oct-11
01-Jul-11
01-Apr-11
01-Jan-11
01-Oct-10
01-Jul-10
01-Apr-10
01-Jan-10
01-Oct-09
01-Jul-09
0.00
Buy Source: UBS; as of 15 Aug 2014
UOL Group (S$) Price Target (S$)
Stock Price (S$)
10.0 8.0 6.0 4.0 2.0
01-Oct-13
01-Jul-13
01-Apr-13
01-Jan-13
01-Oct-12
01-Jul-12
01-Apr-12
01-Jan-12
01-Oct-11
01-Jul-11
01-Apr-11
01-Jan-11
01-Oct-10
01-Jul-10
01-Apr-10
01-Jan-10
01-Oct-09
01-Jul-09
0.0
Buy No Rating Source: UBS; as of 15 Aug 2014
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