Property

Property: URA stats showed that developers launched 1710 private homes excluding ECs in Feb (+37%MoM and +45% from Dec10), but sold 1101 private homes excluding ECs (-8.9% MoM). Ratio of units sold to units launched in Feb fell 64%, well below the 82-113% between Jan10 and Jan11. URA figures indicate that 18,400 private homes including ECs could potentially be launched by yr end…..

Figures also show stock of private homes including ECs launched but unsold has increased steadily from 3,620 units in Sept10 to 5,399 units in Feb11. Property analysts note that if trend continues it could signal oversupply is building up. Sales were underpinned by Mas Market Projects, at the expense of high-end segment, where activity remains muted…..

Deutsche maintains cautious view on residential developers, given rising downside risk, against a backdrop of escalating medium term supply and threat of further policy action if action market fails to cool. House prefer office landlords, KepLand, CCT and Suntec, citing attractive valuations after Sell Off….

RBS believe govt could introduce more measures and this puts an overhang on developers' stock prices. Neutral on sector with Hold rating on City Dev (TP $11.70) and CapitaLand (TP $3.40). Prefer office plays with Buy calls on Keppel Land (TP $5.90) and OUE (TP $4.55).