Lian Beng to ride wave of housing market recovery

Keshia FaculinJanuary 19, 2018

Rio Casa Aerial

Rio Casa, a 286-unit development has been sold collectively for $575 million to Oxley-Lian Beng Venture Pte Ltd.

Singapore-listed construction company Lian Beng Group has positioned itself to take advantage of the recovering private housing market.

According to a report published by CIMB Research on Thursday (18 January), the firm has amassed 1.9 million sq ft of residential landbank here. These include a 20 percent stake each in the redevelopment of two en bloc sites, namely Rio Casa and Serangoon Ville.

Moreover, Lian Beng is expected see greater contributions from its property development arm if prices of private residential properties in the city-state rise significantly.

In FY2017, its construction division accounted for 37 percent of its $281.7 million revenue. Property development made up 31 percent, while its concrete and asphalt business comprised 20 percent.

The construction firm is also anticipated to benefit from its 10 percent stake in the Gaobeidian Township project in China, where prices have more than doubled from 4,600 yuan psm in 2014 to 9,800 yuan psm last year, based on data from online property listing portal Anjuke.

In addition, the overall value of Lian Beng’s investment properties has surged from $66 million in FY2012 to $704 million in FY2017, generating cumulative fair value gains of $156 million during the period.

To further take advantage of the improving sentiment in Singapore’s private housing market, the company is considering to spin off its property development arm and list it on the SGX-Catalist board.

This move will not only allow the market to accurately gauge the value of its property development division, but will also enable this business to raise funds independently without using Lian Beng’s finances.

 

This article was edited by Keshia Faculin.

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