Friday, January 28, 2011

Capitaland - CapitaLand flat; tepid interest in land parcel Buy

Stock Name: Capitaland
Company Name: CAPITALAND LIMITED
Research House: DBS Vickers


CapitaLand (C31.SG) flat at $3.65 with a moderate 2.2 million shares traded, as the developer’s purchase of a enbloc site at Marine Point for $100.68 million fails to generate much interest.



CapLand says inclusive of a $12.8 million development charge, the land cost works out at $1,056 psf per plot ratio. It plans to build 150 units of 1 and 2 bedroom apartments, for launch in 1H12. 



DBS Vickers, which has a Buy rating and $4.95 target, reckons the breakeven cost of the project could come in at $1,500-S1,550 psf; “based on the current market transactions in the area of around $1,700-$1,800 psf, we believe the group could rake in a margin of 10%-15% on this project.” 

UOB KayHian expects the breakeven price to be lower, at $1,300-$1,350 psf and selling prices at above $1,550 psf (assuming a margin of 15%), “on the higher side, factoring in a 10%-15% price appreciation in the area.” 

It adds, “the overall impact on CapitaLand’s RNAV is very minimal“ (at below 1.0%). 

No comments:

Post a Comment