Singapore property developers and homeowners have seen the return of the proverbial “en bloc fever” this year with the number of collective sales hitting a whopping 25, worth a total of $5.2 billion, and with more transactions in the pipeline.
It seems they this fever has also spread to stock investors in the Singapore real estate sector. The FTSE ST Real Estate Index closed at 856.73 points at the end of the week, up 23% year-to-date. Investor interest and confidence that the real estate sector is turning a corner after 15 consecutive periods of decline is buoyed by a wave of private properties being put up for collective sale.
In this instalment of our 4 Stocks This Week column, we turn our attention to four companies in the real estate sector who are in the thick of the collective sales action, having recently participated in successful en bloc deals.
City Developments Limited (SGX: C09)
Last week, the record was set for Singapore’s largest freehold en bloc deal with the sale of Amber Park to City Developments Limited (CDL). The $906.7 million dollar sale was done through a joint venture between CDL’s wholly-owned subsidiary, Cityzens Development, and Hong Leong Group, which also owns 48.96% of CDL.
On Friday, CDL’s share price closed at $12.66, which is up 46.81% in the past 52 weeks.
SingHaiyi Group Ltd. (SGX: 5H0)
At the end of September, 78-unit freehold Sun Rosier condominium in Bartley was sold en bloc for $271 million to a 50:50 joint venture between SingHaiyi Properties and Huajiang International Corporation. SingHaiyi Properties is a wholly-owned subsidiary of the SingHaiyi Group Ltd.
Incorporated in 1988, the SingHaiyi Group Ltd has current market cap of $350.1 million, and closed at $0.122 this week. In the past 52-weeks, its share price has experienced a similar spike – rising 27.7%.
UOL Group Limited (SGX: U14)
Another property that closed a collective sale recently is Nanak Mansions at Meyer Road. Bought en bloc for $201.1 million by Secure Venture Development (No. 1), a 50 per cent-owned associate of UOL Group Limited.
Blue chip UOL Group also stands out as one of the biggest winners in the past 52 weeks, with its shares surging 56.5 per cent.
Oxley Holdings Limited (SGX: 5UX)
In July, former HUDC estate Serangoon Ville was sold for $499 million to a consortium led by Oxley Holdings Limited. Two months prior, Oxley Holdings was also part of the group that bought up another former HUDC estate Rio Casa in Hougang for $575 million.
Despite reporting a profit decline in the final quarter of its fiscal year in August, Oxley Holdings shares closed the week at $0.64, up 40.6% in the past 52 weeks.
These property counters, and others on SGX, will stand to benefit from the increased interest in properties. The Singapore property market has remained relatively subdued due to artificial curbs in supply and demand in the form of numerous government cooling measures. For an extended run of price gains, the property cooling measures will still have to be removed or tweaked.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.