Singapore Land: 3Q11 net profit came in at $56.6m, beating expectations with a 3% QoQ increase, 13% YoY growth. This was mainly underpinned by strong hotel revenue growth, and a slowdown in negative office rental reversions in 3Q11.
Nevertheless, KE Research maintains Sell with TP $4.91. Sees challenges for the office sector lie ahead in 2012. Notes office rental income still accounts for more than 60% of the Group's gross profits, and expects negative rental reversions to resume with further deterioration in the office sector in 2012.
Adds, SingLand and JV partner UOL are likely to launch their new condominium project at Bedok Reservoir Road in the coming months, but it remains to be seen if upgraders' demand in that location has reached a point of saturation, given the number of new projects sprouting out in the vicinity over the past 2 years.
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