- Given the spike in interest rates in 2023, it was not surprising that City Developments announced in late Dec that it expects to record a significant decline in its attributable profit for FY23.
Likelihood of further asset impairments for upcoming FY23 results
- - Read this at SGinvestors.io -
- As such, City Developments highlighted that its overall business performance and core operating earnings have not been significantly impacted by the macroeconomic environment in FY23 as compared to FY22, and it expects to remain profitable for FY23.
- - Read this at SGinvestors.io -
Singapore private residential property prices rose 6.8% in 2023 but transaction volumes were subdued
- Based on data from the Urban Redevelopment Authority (URA), Singapore’s private residential property prices grew 2.8% q-o-q in 4Q23, and this culminated in an overall price appreciation of 6.8% for 2023, a slight moderation as compared to 2022’s 8.6% increase but surpassing market expectations.
- Given the firmness in home prices which affected affordability and the significant 60% Additional Buyer’s Stamp Duty (ABSD) imposed on foreigners, transaction volumes took a hit. Total homes sold in the primary market by developers amounted to 6.4k in 2023, which was a decline of 9.6% versus 2022.
- City Developments’s project launches in 2023 drew mixed responses. For example, its Tembusu Grand project sold 340 of its 638 units (53%) during its launch weekend, but its The Myst new launch project only sold 27% of its units on the launch weekend.
- Over the weekend of 27 Jan 2024, City Developments launched its 512-unit Lumina Grand Executive Condominium (EC) project located at Bukit Batok West Avenue 5. According to The Business Times, 269 units, or 53% of units were sold at an average price of S$1,464 per square foot, as of noon on 28 Jan.
Low valuations a buffer to asset impairments
- Read more at SGinvestors.io.
Above is the excerpt from report by OCBC Investment Research.
Clients of OCBC Securities may be the first to access the full report in PDF @ https://www.iocbc.com/.
OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-02-01
Read also OCBC's most recent report:
2024-03-01 City Developments - Targeting Divestments As Gearing Rises.
Price targets by 4 other brokers at City Developments Target Prices.
Listing of research reports at City Developments Analyst Reports.
Relevant links:
City Developments Share Price History,
City Developments Announcements,
City Developments Dividends & Corporate Actions,
City Developments News Articles
