Price performance (8th May – 15th May 09)
Over the past week, property stocks outperformed the Singapore market, down 4.1% vs the STI which declined 4.4%. Developers (-2.4%) outperformed REITs (-7.5%). Best performers were Yanlord (+12%), Sing Land (+7%) and Ying Li (+5%) while worst performers were CCT (-12%), Saizen (-14%) and ai-Trust (-16%).

Mid-high end new launches and relaunches
Over the weekend, we visited two projects which were relaunched (BelleVue Residences by Wing Tai and Wharf Residence by CapitaLand) and a new project (Parc Centennial by EL Developments). There was good response to the Parc Centennial and Wharf Residence projects which were priced at S$1,100-1,300psf and 70-80% of all units were sold by Sunday afternoon. Prices at the Wharf
Residence were reduced from ~S$1,600psf previously. Wing Tai seems to be testing the market by relaunching only 19 units of its BelleVue project. Pricing of S$1,600-1,800psf has been reduced from S$2,200psf last year and >50% of the units were sold.

Strong new sales continue
Sales momentum for the primary market is holding up, with 1,207 new unit sales registered in April 2009 (vs 1,220 in Mar 09 and 275 in Apr 08). In addition to new launches like Illuminaire on Devonshire (by EL Development) and re-launched projects like Kovan Residences (by Centurion Kovan), top sellers in March 2009 continued to contribute to strong sales volumes. Majority of sales continued to
stem from the Outside Core Region (43% of total sales). However, volumes in the Core Central Region showed significant improvement, up 142% MoM to 322 units, accounting for 27% of total sales.

City Development 1Q09 results
Core NPAT was down 50% YoY and 17% QoQ to S$83mn. Results came below expectations, accounting for 19% our estimates and 18% of consensus. The decrease in earnings was largely due to lower contribution from the hotel operations through its subsidiary M&C which was also impacted by unfavourable currency loss. The property development segment also suffered a 16% QoQ and 56% YoY decline at the PBT level to S$69mn. Rental properties segment showed
an improvement 47% YoY and 197% QoQ as higher rental rates were secured from expiring leases. Net gearing remains at 47% (net debt to equity).

Residential
–> New sales holding up above 1,000 level: Sales momentum for the primary
market is holding up, with 1,207 new unit sales registered in April 2009 (vs
1,220 in Mar 09 and 275 in Apr 08). In addition to new launches like
Illuminaire on Devonshire (by EL Development) and re-launched projects like
Kovan Residences (by Centurion Kovan), top sellers in March 2009
continued to contribute to strong sales volumes.

–> Buyer of units at The Suites gets a break: Keppel Land said that it has
granted a six-month payment extension to a buyer who purchased 51
apartments in its 157-unit The Suites @ Central project. The buyer
purchased the units in an en bloc deal for an average price of $1,806 per sq
ft under the deferred payment scheme (DPS) in June 2007 - at the height of
the property market boom. Keppel Land, which jointly developed The Suites
@ Central with Chip Eng Seng, did not disclose the buyer’s identity. (Source:
Business Times)

–> Prices creep up after property’s long dive: Some developers have quietly
started raising prices a notch as they test waters after strong sales volumes
seen in the first quarter. Price adjustments are often made by reducing
discount levels. On a project average basis, the effective prices for some
developments may have gone up between 2 and 5% compared with levels
earlier this year, according to developers and property consultants. Property
giant Far East Organization’s residential projects such as the Mi Casa condo
in Choa Chu Kang, The Lakeshore in Jurong, Hillview Regency in Bukit
Batok, Floridian at Bukit Timah Road (non-premium units), and Vida at Peck
Hay Road are among those that have seen slight price gains lately. Rival City
Developments is also said to have incrementally raised prices for The Arte at
Thomson as sales progressed briskly. Bukit Sembawang is also said to have
introduced a single-digit per cent price hike for later units (apartments) at The
Verdure at Holland Road after the initial batch of units were sold. UOL Group
and Kheng Leong are also understood to have upped prices selectively - for
better-selling units - at Double Bay Residences in Simei. (Source: Business
Times)

This article was first published by Bank of America, Merrill Lynch Research.