Shares of Singapore developers that can deploy capital efficiently and have high exposure to the commercial property space will outperform pure residential developers next year, says RBS.

With gearing at close to a 7-year low of 31% vs the optimal 60%, the house says developers are expected to compete aggressively for commercial and residential sites.

“We see acquisitions in offices as positive, as we expect appreciation here.”

Adds, transaction values for offices are still 18% below their 2007 peak, and the acquisition climate is favorable given the low interest rates. Picks Keppel Land (K17.SG) as favorite given its 53% RNAV exposure to prime offices (rates at Buy with a $5.90 target).

Says UOL Group (U14.SG) will also benefit from its 65% RNAV exposure to commercial and hotel assets (rates at Buy with a $5.80 target).