CITY DEVELOPMENTS

CITY DEVELOPMENTS | BUY

TARGET PRICE: $15.00

MARCH 20 CLOSE: $13.45

RHB Research, March 20

As one of the largest residential landbank owners in Singapore, City Developments (CDL) remains the best proxy for investors looking to tap into the residential segment's recovery.

Its listed subsidiary Millennium & Copthorne's hotel operations are also poised to benefit from strong global economic growth aiding the hospitality sector.

CDL has a current unsold inventory of about 3,859 units, making it one of the developers with the highest unsold units.

While it has been fairly aggressive in recent land bids, we believe its strong brand positioning and established track record should aid in its projects commanding premium prices. Our channel checks revealed that its recent preview of The Tapestry condominium drew a strong response, with more than 5,000 people visiting the show units during the launch on March 10.

We understand launch prices are expected to be around $1,300 psf, which translates into a healthy margin of more than 20 per cent.

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