UOL: JV with UIC won enbloc tender for Potong Pasir property and commented
- Won enbloc tender for residential development in Potong Pasir for $334.2m, or $593 psf ppr.
- Based on an estimated cost breakeven of $1,000 psf (including demolition/dumping costs), the new development is expected to be launched at a sale price of $1,200 psf.
- Recent land banking activities reflect intense competition among developers, which could lead to a margin squeeze.
- House stays cautious on property developers. Top pick in the sector is CapitaLand (Buy, TP $3.93), with Hold ratings for CityDev (TP: $8.92), Ho Bee (TP: $2.28) and Wing Tai (TP: $1.71).