Benefiting from spillover interest to high-end segment. In the high- end segment, it has been reported that two units at Nassim Park Residences were sold at prices above S$3,000 psf, with one of them at S$3,813 psf and an option was issued for the sale of a fourth-level unit at S$3,081 psf last weekend. We think that this is a commendable achievement, given thatthe high-end segment has only seen marginal improvement in buying interest and UOL had managed to sell these units without reducing prices.
Fair value raised to S$3.56; Maintain HOLD. We are now raising our RNAV estimate to S$4.11 (previously S$3.57) to reflect the increase in valuation of UOL's listed investments, lower risk-free rate of 2.4% and higher selling price assumption for Meadows @ Pierce (from S$800 psf to S$900 psf). The discount rate on our valuation of UOL's development and investment properties has also been reduced from 40% to 30% as the degree of uncertainty in our valuation is lower now, with the successful launch of DBR and the stabilization of the economy and property market. While we think fundamentals do not support a sustainable recovery in Singapore property market yet, we believe that UOL is now better positioned to weather another downturn as it will be left with just one unlaunched project in Singapore - the former Spottiswoode Park site, after the launch of Meadows @ Pierce. Our fair value has now been raised to S$3.56 (previously S$2.91). We maintain our HOLD rating on UOL and will turn buyers around S$3.00- S$3.10.
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