CGS-CIMB Research analyst Lock Mun Yee has maintained “add” on UOL Group with a higher target price of $8 from $7.91 previously, which factors in faster residential sales as well as new contributions from the group’s Ang Mo Kio site, which was recently awarded to the group and its joint venture (JV) partners.


See: UOL-led JV wins tender for Ang Mo Kio Ave 1 residential site from Urban Redevelopment Authority


The new target price is still based on a 40% discount to the group’s revised net asset value (RNAV).

On June 2, UOL Group, as well as Singapore Land Group and Kheng Leong, won the tender for a private housing site at Ang Mo Kio Avenue 1 from the Urban Redevelopment Authority (URA) for $381.4 million.

The site is said to be able to house over 370 condominiums spread over the total gross floor area (GFA) of 415,415 sq ft.

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In a report on June 4, Lock estimates that the breakeven cost could be around $1,600 to $1,650 psf, based on the land price of $1,118 psf of floor area.

Meanwhile, sales at UOL Group’s at its ongoing projects “continue to be brisk”. The group has sold 159 units year-to-date in June, according to data from URA on June 4.

The group’s 448-unit The WaterGardens at Canberra Drive is on track to be rolled out in early 3QFY2021.

“Given the present robust residential market, we expect this launch to be well-received when marketed. This will continue to extend the group’s development income visibility,” writes Lock.


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UOL’s active asset enhancement initiative (AEI) with its office properties is also another positive for the counter.

Its subsidiary, Singapore Land Group, secured $100 million of green loans in March for a major upgrading of Singapore Land Tower as part of the group’s AEIs.

UOL has also received in-principle approval from the authorities to expand the 333 North Bridge Road site with a new standalone seven-storey extension.

The upgrade for Singapore Land Tower will be completed by end-2023. The building will feature more green features including landscaped public spaces, energy efficient lifts and lighting, as well as priority parking for electric and hybrid cars.

While the group’s retail portfolio may see challenges during Singapore’s Phase 2 Heightened Alert measures from May 16 to June 13 due to dining-in restrictions and smaller social gathering sizes, Lock believes the group’s active portfolio management will improve its operational performance.

Its hospitality portfolio, on the other hand, is likely to continue to pose a drag in the near term due to the ongoing international travel restrictions.

On this, Lock says she continues to “like” UOL for its “diversified business model with a high proportion of recurring income”.

A faster-than-projected recovery of its hotel operations may be a re-rating catalyst for the group’s share price, while a slower-than-expected pace of residential sales or new property cooling measures may pose downside risks.

As at 12.13pm, shares in UOL Group are trading 3 cents lower or 0.4% down at $7.38.