CDL pops the champagne as sales momentum picked up

It sold 20 home units in two days.

City Developments (CDL) saw a healthy take-up of 20 residential units across its Singapore projects over the weekend, after a surprise easing of policy measures, according to RHB.

A bulk of the sales came from its mass to mid-range projects. This is in line with RHB’s view that residential volumes are to see a near-term pick-up as more marginal buyers enter the market.

“Going forward, CDL is expected to launch New Futura and South Beach Residences in the latter half of 2017,” said Vijay Natarajan, RHB analyst.

Here’s more from RHB:

CDL recently hosted an analyst social event at its newly rebranded JW Marriott hotel (634 rooms).

We understand that demand has picked up post soft opening (December 2016), with current occupancy at 50-60%. The refurbished luxury hotel caters mainly to corporate and high-end leisure travellers, with room rates starting at S$450/night.

About 55% of its customer mix is currently corporate. We expect hotel occupancy to rise to the 70% mark post official opening this week, on the back of resilient visitor demand.

CDL’s net gearing improved substantially to 16% as at FY16 (26% in FY15), giving it a healthy debt headroom of over S$3b (assuming comfortable gearing level of 50%).

In 2017, CDL has so far deployed a total of S$304m for the acquisition of a 24% equity stake in China’s co-working space operator Distrii, a UK residential site, and a commercial project in Shanghai. We expect management to continue this acquisition spree (likely in Singapore, Japan, and UK markets), capitalising on current market opportunities.