Developers expected to be cautious in bidding activities

Investors’ risk appetite in the near term will remain low due to external volatility, says DBS.

Here's more from DBS:

Bottom-up stock picking. From the developers’ perspective, we think they are likely to be relatively more cautious in their land selection and bidding activities to replenish their much-depleted landholdings. With the ongoing global uncertainties, property stocks have retreated from their year high and are trading at a 37% discount to RNAV or at –1SD to mean level.

While we think much of the valuations have factored in the cautious outlook, investors’ risk appetite in the near term will remain low due to external volatility. Our strategy in the developer space would be to prefer those with a diversified property segment exposure such Capitaland and UOL as well as those with lower residential activities and are market players in their niche such as CMA and GLP.