3 Top Singapore Property Stocks to Buy

June 23, 2023

The Singapore government will release land for building up to 8,590 homes, 98,250 square meters of commercial space, and 530 hotel rooms in the 2H2023.

This is part of the Government Land Sale (GLS) program. Of the 17 sites available, 8 are new and include potential for 270 homes in Orchard Boulevard, 1,560 homes across two sites at Zion, and another 1,535 homes across two sites in Upper Thomson Rd.

In total, the amount of land made available for private homes in the 2H2023 will be 11.3% higher than the 1H2023 and is the highest since 2014.

This gradual increase should help maintain a stable market and allow developers to build up their land stock.

While share prices of property developers have been steady this year, they are currently undervalued, trading at a 53% discount to RNAV.

This allows investors to take advantage during this slower cycle and invest in property developers with a strong lineup of residential projects and solid balance sheet.

Here are 3 top Singapore property stocks that investors can look to add into their portfolio.

1. CapitaLand Investment

CapitaLand Investment Ltd (SGX: 9CI) is one of Asia’s largest real estate investment managers.

Their business strategy focuses on expanding their funds under management, which they achieve through efficient capital deployment and improved performance of their investment and lodging properties.

These strategies are likely to strengthen their return on equity (ROE) and potentially lead to a revaluation of their share price.

At present, CLI’s stock is trading at a 33% discount to its RNAV (Revalued Net Asset Value).

This discount provides a lucrative opportunity for investors who believe in the company’s growth potential and strategy.

2. City Developments

City Developments Ltd (SGX: C09) stands out due to their land restocking activities, hinting at a potential launch pipeline of around 2,000 units for 2023.

This suggests a solid visibility of their residential earnings extending from FY23F onwards.

Another potential growth factor is the recovery of the global hospitality industry, given that it is a sector where City Developments holds considerable assets.

As of now, their stock is trading at a 58% discount to RNAV, offering a potentially profitable entry point for investors.

3. UOL Group

UOL Group Limited (SGX: U14) has a high recurring income base, which is supported by various streams, including rentals, hotel operations, and investment holdings.

The Group’s robust portfolio is complemented by its good office exposure through Singapore Land Group, positioning it well to capitalize on the rebound of office demand as businesses adapt to the post-pandemic work norms.

UOL’s diverse asset base, combined with its sound financial standing, make it a solid choice for investment.

Currently, UOL is trading at a 51% discount to its RNAV, further enhancing its attractiveness for investors seeking value and stability.

Take advantage of investment opportunities in the property sector

Singapore’s property market presents a multitude of attractive investment opportunities, particularly when focusing on top developers like CapitaLand Investment, City Developments, and UOL Group.

These companies have demonstrated consistent performance, innovative growth strategies, and resilience in navigating market dynamics.

Their current RNAV discounts provide an excellent entry point for investors, while the potential for substantial returns is clear.

Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.

By keeping these developers on your radar, you can make informed decisions that contribute to a robust and diversified investment portfolio.

Investing in Singapore’s property market, thus, could prove to be a strategic move for both short-term gains and long-term financial growth.

Downside risk however remains with risk coming from the faster-than-expected interest rate hikes, a slower economy and further property market regulations which could reduce housing demand.

Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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