Company Name: CAPITALAND LIMITED
| Research House: Deutsche Bank | Price Call: BUY | Target Price: 3.31 |
Stock Name: Wing Tai
Company Name: WING TAI HLDGS LTD
| Research House: Deutsche Bank | Price Call: BUY | Target Price: 1.77 |
Stock Name: CapMallsAsia
Company Name: CAPITAMALLS ASIA LIMITED
| Research House: Deutsche Bank | Price Call: HOLD | Target Price: 1.86 |
Stock Name: CITYDEV
Company Name: CITY DEVELOPMENTS LIMITED
| Research House: Deutsche Bank | Price Call: HOLD | Target Price: 11.59 |
Deutsche Bank has shifted its preference among Singapore’s property stocks from real estate investment trusts to developers, and said it prefers those with strong development pipelines and land banks or commercial assets.
The FTSE ST Real Estate Investment Trust has jumped 32% since the start of the year, compared to 38% for the FTSE ST Real Estate Index.
The brokerage upgraded developers CapitaLand and Wing Tai Holdings to ‘buy’ from ‘hold’, with a target price of $3.31 and $1.77 respectively. It also upgraded City Developments to ‘hold’ from ‘sell’ and has a $11.59 target price for the firm.
“Within residential, high-end exposure is preferred over low-to-mid-end exposure, given the narrowing gap between the segments and as this segment is less affected by recent policy moves,” said Deutsche Bank in a report.
The brokerage added that high-end residential offers better scope for long-term recovery as values are still 10-20% below peak levels.
It raised its 2013 property price assumptions by 15% on average due to firmer rents and a stronger-than-expected residential market and now expects a 1-3% decline in low-to-mid end prices with a slight 3-4% growth in mid-to-high end home values.
“We were previously more defensively positioned, favouring stronger organic growth profiles such as CapitaMalls Asia and companies with balance sheet capacity to acquire,” said Deutsche, which has downgraded CapitaMalls Asia to ‘hold’ from ‘buy’, with a target price of $1.86.
Deutsche noted that ample liquidity after QE3, together with a stronger Singapore dollar, should continue to attract capital into Singapore’s real estate.
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