RBS upgrades City Developments (C09.SG) to Hold vs Sell and lifts its RNAV-based target price to $11.90 vs $10.93 to reflect the higher valuations of the developer’s commercial properties and its Millennium & Copthorne (MLC.LN) unit.

“We expect the capital value of CDL’s commercial portfolio to appreciate next year on the back of higher transaction volume and rents.”

Says the hotel arm M&C should continue to do well as global economic conditions improve.

But expects housing-market curbs in Singapore to continue to weigh; “due to continued high liquidity in Asia, we consider it highly probable that the government will introduce harsher regulations to deflate the property bubble.”

The shares +1.2% at $12.98.