Friday, November 18, 2011

Liang Beng/Construction

Liang Beng/Construction: Announced that its JV Co with Centurion, Spottiswoode Development, has bought Dragon Mansion, at 14 Spottiswoode Park, for $130m. The price translates to about $1,093 psf for the freehold residential development.

The 38,618 sq ft site has a plot ratio of 2.8 and a potential GFA of up to 118,943 sqft, including a 10% bonus space for balconies. It can be developed to a maximum height of 36 storeys. The awarded price was slightly below the indicative range of $132m to $142m when the tender was relaunched last month.

Separately, OCBC note that the latest qtrly results for construction firms under house coverage saw positive yoy earnings growth. Tat Hong and Lian Beng stood out, as they recorded the strongest earnings growth and house is encouraged by latest set of qtrly results, as it shows most firms are executing their projects well and increasing profits. At the same time, data such as BCA's tender price index and the land sales by URA in the past few yrs further adds to positive outlook for the construction sector. Tip pick in sector is Lian Beng [BUY, $0.51].

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