No one's buying new: Zero units sold at new Sentosa properties

Ho Bee takes a beating as its 1Q12 revenue dives 51% due to unsold units at its newly completed and existing residential projects.

In a statement, CIMB said that the developer was unable to sell any new units at Turquoise and Seascape, its latest completed projects in Sentosa. Some 60% of unsold Turquoise units, however, have been leased.

A portion of the unsold units at Seascape is being marketed for leasing, of which some leases have been secured at S$12k/mth (est. 4% yield on cost).

Ho Bee’s 1Q12 investment property revenue dived 32% yoy after divestments as the group continues to expect sluggish demand for high-end residential projects.

The analyst said the languishing Sentosa residential sales “remain an overhang despite a strong balance sheet with a low net gearing of 0.26x” and the addition of rental income from the leased Turquoise units.

The developer, however, is optimistic for a turnaround in 2Q12 as unit sales at the One Pemimpin industrial project is recognized. 

The divestment of an investment property, One Tannery, is also seen to prop up earnings with a gain of S$18m in 2Q12.