Share
9th – 15th Aug: Developers expect price hike in 2H10
· Another listless week
The property sector had a listless week which was inline with the broad market. KL Property Index was 0.5% lower while all property stocks under coverage posted losses for the week with the exception of Sunrise.
On notable major shareholding changes among stocks under coverage, Employees Provident Fund has sold 0.4m shares in Sunrise, Dato' Dr. Yu Kuan Chon has added 0.2m shares in YNH Property and Dato' Fateh Iskandar has also added 0.2m shares in Glomac.
· Notable property news
According to a survey undertaken by Real Estate and Housing Developers’ Association (Rehda) in July, a majority of developers expect property prices to increase by up to 20% in 2H10. The survey found 41% of the 133 respondents expected an up to 10% hike in prices in 2H10, while another 40% predicted a 10%-20% rise. Some 4% of the respondents predict prices to rise by over 20%. This is not surprising judging from recent price appreciation.
According to CBRE, prices of landed residential properties in the Klang Valley have appreciated in an unprecedented manner. Certain projects monitored by the property consultant have shown up to 17% y-o-y price hike up to 2Q10.
On land acquisition news flow, Bolton acquired a 22.98-acre leasehold land in Ulu Kelang/Ampang for RM72m cash or RM72 psf. It plans to develop a gated and guarded residential project with a GDV of RM220m. Kumpulan Hartanah Selangor acquired 9.6-acre of leasehold commercial land located in Petaling Jaya for RM61.7m or RM148 psf. It plans to develop service apartments, shop offices and shopping complexes.
On REIT news flow, the Malaysian REIT Managers Association has proposed zero tax for individual local and foreign investors and 10% flat withholding tax for all other investors to enhance the existing tax concessions for REITs. The current tax concessions of 10% for individual local and foreign investors, and 25% for all other investors will expire in
2011.
· Maintain OVERWEIGHT
While we maintain our overweight stance on the property sector, we only like the residential sub-segment due to strong sales momentum amid still low interest rate and positive sentiments. We hold the view that the recent 25 bps OPR hike is unlikely to dampen interest in property as interest rate levels remain accommodative.
We see little upside in big cap property stocks and as such prefer laggard mid-cap property stocks such as Sunway City and Sunrise. Among non-rated property stocks, we also like Mah Sing. For exposure to commercial property development, we prefer Glomac due to its undemanding valuations and knack for securing en bloc deals with local institutional funds.
· Another listless week
The property sector had a listless week which was inline with the broad market. KL Property Index was 0.5% lower while all property stocks under coverage posted losses for the week with the exception of Sunrise.
On notable major shareholding changes among stocks under coverage, Employees Provident Fund has sold 0.4m shares in Sunrise, Dato' Dr. Yu Kuan Chon has added 0.2m shares in YNH Property and Dato' Fateh Iskandar has also added 0.2m shares in Glomac.
· Notable property news
According to a survey undertaken by Real Estate and Housing Developers’ Association (Rehda) in July, a majority of developers expect property prices to increase by up to 20% in 2H10. The survey found 41% of the 133 respondents expected an up to 10% hike in prices in 2H10, while another 40% predicted a 10%-20% rise. Some 4% of the respondents predict prices to rise by over 20%. This is not surprising judging from recent price appreciation.
According to CBRE, prices of landed residential properties in the Klang Valley have appreciated in an unprecedented manner. Certain projects monitored by the property consultant have shown up to 17% y-o-y price hike up to 2Q10.
On land acquisition news flow, Bolton acquired a 22.98-acre leasehold land in Ulu Kelang/Ampang for RM72m cash or RM72 psf. It plans to develop a gated and guarded residential project with a GDV of RM220m. Kumpulan Hartanah Selangor acquired 9.6-acre of leasehold commercial land located in Petaling Jaya for RM61.7m or RM148 psf. It plans to develop service apartments, shop offices and shopping complexes.
On REIT news flow, the Malaysian REIT Managers Association has proposed zero tax for individual local and foreign investors and 10% flat withholding tax for all other investors to enhance the existing tax concessions for REITs. The current tax concessions of 10% for individual local and foreign investors, and 25% for all other investors will expire in
2011.
· Maintain OVERWEIGHT
While we maintain our overweight stance on the property sector, we only like the residential sub-segment due to strong sales momentum amid still low interest rate and positive sentiments. We hold the view that the recent 25 bps OPR hike is unlikely to dampen interest in property as interest rate levels remain accommodative.
We see little upside in big cap property stocks and as such prefer laggard mid-cap property stocks such as Sunway City and Sunrise. Among non-rated property stocks, we also like Mah Sing. For exposure to commercial property development, we prefer Glomac due to its undemanding valuations and knack for securing en bloc deals with local institutional funds.
SHARE
SPONSORED CONTENT
