Launch crowd at The Tapestry showflat. (Photo: CDL)
City Developments Limited (CDL) is expected to be negatively affected by the government’s latest property cooling measures given its market position, according to RHBInvest analyst Vijay Natarajan.
For instance, the Singapore-listed property developer has among the biggest unsold residential inventory in the city-state of about 3,300 units and this is estimated to account for 25 percent of its revalued net asset value (RNAV). Singapore also contributed to 51 percent of the company’s assets and 62 percent of its revenue as of Q1 2018.
“We expect the latest round of property cooling measures to adversely impact margins at its developments, and have trimmed our selling price assumptions by 5.0 to 10 percent,” said Natarajan.
Its upcoming developments that are likely to feel the brunt of the new property curbs are the Amber Park en bloc site, Handy Road and West Coast Vale sites as well as the Sumang Walk executive condominium (EC) plot, as these were acquired at higher prices relative to nearby sites in anticipation of a recovery.
Meanwhile, the UK accounted for 12 percent of CDL’s assets as of the first quarter, while China and the US made up 10 percent and 8.0 percent respectively.
However, the near-term outlook for the company’s UK projects remains subdued due to the slow progress in the country’s negotiations to exit from the European Union.