Introduction

The Singapore property development and investment sector continues to be a focal point for investors seeking resilient returns. In this detailed analysis, CGS International delves into UOL Group and its peers, examining their strategies, financial performance, and market positioning. The report offers valuable insights into future trends and provides actionable recommendations for investors.

UOL Group: Building Value Through Strategic Initiatives

UOL Group stands out with its diversified business model and strong focus on recurring income. Management reiterated its commitment to enhancing shareholder value through effective capital management and improving asset performance. Key strategies include active asset management, divestment of low-yielding assets, and capital redeployment into higher-yielding properties.

Residential Launches in 2025

UOL plans to launch several residential projects in 2025, including the 1,195-unit Parktown Residences in 1Q25, a site at Orchard Boulevard in 1H25, and a development at Holland Drive in 2H25. The Meyer Blue project, launched in October 2024, achieved a 60% take-up rate by December 2024, signaling strong market demand.

Capital Management and ROE Enhancement

With a robust balance sheet and a net debt-to-equity ratio of 0.27x as of 1H24, UOL is well-positioned for accretive acquisitions. The potential establishment of a Singapore REIT, leveraging its S\$12 billion investment property portfolio, could further enhance returns. UOL targets a mid-single-digit ROE, supported by asset enhancement initiatives and strategic landbank replenishment.

Recommendation

CGS International maintains an “Add” rating for UOL Group with a target price of S\$8.20, reflecting a 61.3% upside from the current price of S\$5.08. The company’s strong balance sheet, diversified portfolio, and strategic focus on value unlocking are key drivers for this recommendation.

APAC Realty: Positive Momentum Ahead

APAC Realty operates as a leading real estate agency in Singapore. The company demonstrates resilience with a strong market presence and a focus on operational efficiencies.

Financial Performance

APAC Realty is projected to achieve a core P/E of 12.1x in FY24F and 9.8x in FY25F, indicating attractive valuation metrics. Its dividend yield is forecasted at 6.3%, reflecting a commitment to rewarding shareholders.

Recommendation

CGS International gives an “Add” rating for APAC Realty with a target price of S\$0.45, signaling strong growth potential.

Capitaland Investment: Diversified and Resilient

Capitaland Investment (CLI) boasts a robust business model with diversified asset classes and geographies. The company continues to optimize its portfolio for higher returns.

Financial Highlights

CLI trades at a core P/E of 13.1x for FY24F, with a dividend yield of 4.9%. The stock currently trades at a 49% discount to its RNAV of S\$4.78, offering significant upside potential.

Recommendation

CGS International reiterates an “Add” rating for CLI with a target price of S\$4.30.

City Developments: Unlocking Value Through Strategic Moves

City Developments (CDL) is a key player in the Singapore property market, with a focus on residential and commercial developments.

Valuation and Performance

CDL trades at a core P/E of 10.9x for FY24F and offers a dividend yield of 2.4%. Its current price reflects a 69% discount to its RNAV of S\$16.30, highlighting potential value unlocking opportunities.

Recommendation

CGS International assigns an “Add” rating to CDL with a target price of S\$8.97.

Frasers Property Limited: A Balanced Growth Strategy

Frasers Property is recognized for its diversified portfolio spanning residential, commercial, and hospitality assets.

Key Metrics

The company anticipates core P/E ratios of 18.5x and 18.4x in FY24F and FY25F, respectively. Despite trading at a 64% discount to its RNAV of S\$2.57, Frasers Property offers a stable dividend yield of 4.8%.

Recommendation

CGS International maintains an “Add” rating for Frasers Property with a target price of S\$1.41.

Propnex: Steady Growth in Agency Services

Propnex continues to gain traction as a major player in the real estate agency business in Singapore.

Performance and Outlook

The company is forecasted to achieve a core P/E of 14.3x for FY24F and 13.6x for FY25F. Propnex maintains a dividend yield of 6.3%, appealing to income-focused investors.

Recommendation

CGS International assigns an “Add” rating to Propnex with a target price of S\$0.94.

Hongkong Land: A Regional Real Estate Giant

Hongkong Land Holdings operates a diversified portfolio of commercial and residential properties across Asia.

Valuation and Metrics

The company trades at a core P/E of 12.2x for FY24F, with a dividend yield of 5.4%. Its price-to-book ratio remains low at 0.28x, reflecting a deep value proposition.

Recommendation

CGS International rates Hongkong Land as “Hold” with a target price of S\$4.95.