Property

Property: DB has sector outlook from its Access Asia Conference 2011. Maintain positive office outlook on increasing cost-competitive option for global financial institutions given availability of Grade A office space. Expect grade A supply to rise from current 3m sf to 9.3m by 2013, and Rents +7% in 1Q11 to $15psf by 2014, while capital values tip to rise to $2,800psf from current $2,500psf……

Tip Residential undersupplied until 2013, where more measures in the HDB market are expected coupled with the provision of more land supply. Industrial demand well supported; although retail outlook mixed.

Property: CS believes privatisation of Allgreen by Brookvale could trigger a re-rating for the property stocks, which have been underperforming recently due to policy overhang and interest rate concerns. Expect stocks trading at significant discounts to book values and RNAVs to potentially narrow the valuation gaps…..
Continue to prefer the office and hospitality sector, like OUE and CDL, which are trading at 0.95x and 1.54x P/Bs due to accounting treatments, but are trading at attractive 37% and 30% discount to RNAVs, respectively.