Keppel Land

Keppel Land: Deutsche hosted investor’s meeting with mgt post 2Q results. Key Pts as follows: 1) Key question raised during meeting revolved around capital allocation. Co. stated that they will remain selective in their land bank acquisitions, with a focus on mixed development sites. In China, twill focus on mixed-use development sites given their already sizeable residential land bank. Believes that in SG, residential prices are likely to remain stable; hence, they did appear to be compelled to build up their domestic landbank. 2) Company add that they will resist residential unit prices cutting given their strong balance sheet position. With construction starting for the showflat at Keppel Bay Plot 3, mgt stated that the site is close to launch-ready, but will depend on market conditions, and unlikely to launch in 2H12. Grp has further decreased its planned launches from 3,041 to 5,171 units as it believes that there is firm untapped pent up demand. 3) Approximately 70% of MBFC is now leased, with demand primarily from the financial sector. However, mgt shared that while demand has waned from the financial sector; they have seen a rise in interest from trade industries looking to expand in Asia, most notably from the commodities, legal and services businesses.