CityDev    Last:4.95    -0.04

CDL Hospitality REIT

Good buying opportunity has turn up. Accumulate if you have not done so. City Dev has a global brand name. 

 

* Q1 net profit: S$126.1 mln vs S$41.2 million * Outlook: Company to remain profitable in next 12 months SINGAPORE, May 14 (Reuters) - City Developments Ltd. , headed by Singapore tycoon Kwek Leng Beng, is Southeast Asia's second-largest developer after CapitaLand .

 

Hi, any idea if City D result is out ??

 

i am still queuing 13.10 for you!

 

City Developments Ltd said it has settled its dispute

with Suntec REIT over the latter's failure to complete its acquisition from the

company of some 788 mln sgd worth of commercial properties under a 2005

agreement.

Suntec REIT agreed in June 2005 to buy the properties from City Developments

but the deal fell through after Suntec failed to obtain a clearance from the

Monetary Authority of Singapore in time for its presentation to Suntec REIT

shareholders for approval at a meeting in Sept of that year.

City Developments said without prejudice to either party, it has returned the

5.0 mln sgd deposit paid by Suntec REIT for the proposed acquistion.

"The terms of the said settlement agreement constitute full and final

settlement of this matter, without admission of any liability whatsoever by any

of the parties," City Developments said.

 

Merrill Lynch has lifted its target price to $13.60 from $12.45 previously on expectations that the company will inject its Singapore office assets into a REIT next year.



The company said it will revisit the possibility of launching an office REIT given soaring office rents, with monthly rents at its Republic Plaza office tower having topped $10 per square foot recently.



"We believe it (REIT) is likely, given the strength of both the property and REIT markets. We also assume that such an initiative would be value accretive to shareholders," Merrill Lynch said in a note to clients.



The brokerage estimates that City Developments has almost $3 bln worth of office buildings and a further $1 bln worth of retail and industrial properties.

 

Executive chairman Kwek Leng Beng had indicated his intention to put office properties worth up to $3 bln into a new REIT as soon as next year.



DBSV raised its target price to $13.40 from $10.50, because of the outlook for the company. OCBC said it had raised its fair value for to $12.80 from $10.10. But Citigroup said it was keeping its "hold" rating, and CIMB-GK said it was keeping its "neutral" rating until the company confirmed its plans for an office REIT.

 

It said yesterday that monthly rents at its Republic Plaza office tower have already exceeded $10 per square foot, and that rents will reach the previous peak of $12 psf anytime soon given the current tight supply of prime office space.

 

City Dev seems to be able to target foreign property buyers, who are purchasing with their cash, and are  not affected by the new CPF ceiling limit, etc. This counter is worth buying on dips below $10.60 - $10.80 range.

 

Trend a little uncertain... but could be on a short term uptrend now?

 

CIMB-GK says it has lowered its rating to "neutral" from "outperform" because the company's shares are trading close to the brokerage's revised target price of $12.00.



"While City Developments remains a key property proxy, we believe the latest Futura [redevelopment site] acquisition suggests a lack of attractive investment opportunities for the group at the moment."



City Developments is is paying $287.3m or $1,179 per square foot for Futura, a freehold site here with an area of 87,034 square feet and a plot ratio of 2.8 to one. City Developments can build 150 apartments on this site, which can accommodate a building with a maximum height of 36 storeys.



CIMB-GK believes that the company can put apartments in the development up for sale at $1,800 per square foot, but that this means pretax margins for the project work out to an unattractive 8%.

 

Citigroup says it has raised its target price to $11.70 from $9.45 in view of the state of the market here for offices and residences. Citigroup has also raised its revised NAV to $9.71 from $9.36 to reflect higher office capital values, higher selling prices for its residential developments and the higher share price of Millennium & Copthorne Hotels PLC.



But the brokerage is keeping its "hold" rating for the stock, saying that when the company has put properties its has developed on the market, the response has been "patchy". Citigroup said the lukewarm response to the company's Ferraria Park residential development, which is intended for the mass market, suggested continuing caution in this market.

 

DMG & Partners said it has lifted its target price to $12.10 from $10.80 previously as the stock is its preferred company among property developers in Singapore.



"City Developments remains our preferred pick amongst the big caps as it is a prime beneficiary of the domestic asset reflation cycle with minimal exposure to the uncertainties in the China property market," DMG said. Among local developers, CapitaLand and Keppel Land have a significant exposure to the Chinese property market, it noted.



Apart from robust sales of its residential projects in Singapore, City Developments is also well positioned to benefit from the upswing in the office and hotel sectors, DMG said.

 

Merrill Lynch said it has upgraded its rating to "buy" from "neutral" with a target price of $12.45 on its positive earnings outlook going forward amid Singapore's robust residential and office sectors.



"Key short-term potential catalysts include stronger reported earnings in the second half and a ramp-up in residential property launches," the brokerage said in a note to clients.



"We forecast 14 new residential and mixed development projects will be launched over the next 24 months, which represents the strongest launch program for the company in a decade. These projects are skewed toward the prime property segment, which we see as having the strongest outlook for demand," it said.



Merrill Lynch said prices of prime residential properties have risen by as much as 20% this year and will likely rise by another 7-10% per year in the next three years.



City Developments is also benefiting from the robust demand for office space, as it has some $2b worth of office buildings, it said.



"Market rentals for prime office space have already lifted 100% over the past two years, driven by strong demand and a historic lack of new supply, " it said.

 

Hi Nostradamus,

It's a wrong move by me. I thought Creative might pick up faster than City Dev since the later has been stalling at $9.20 - $9.50 for quite a long time.

However, I am still grateful for your advise. Hope u continue to hang on to your lot.

Cheers.

 

Hi tabbykat,

What a pity! It reached $10.30, within my $10.20-$10.40 range. Have patience, my friend. This is a good blue chip stock.

 

Hi Nostradamus,

Have sold the entire holding at $9.80 and switched to Creative at $10.50.

Hope we can continue to share your view on Creative at its tread.

Thank you and Cheers

 

Hi tabbykat,

Having broken $9.75, next resistance is between $10.20 and $10.40.

 

Thank you both Singaporegal and Nostradamus.

Your comments are both useful and valuable. I will continue to monitor this counter and try to take profit today.

Cheers

 

Hi tabbykat,

I think it peaked at $9.75 for this leg. May go down from here. But I can't rule out a year-end rally later this year.