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City Developments cut to ‘neutral’ on expected slowdown in Singapore properties and Brexit woes

PC Lee
PC Lee7/23/2018 09:59 AM GMT+08  • 2 min read
City Developments cut to ‘neutral’ on expected slowdown in Singapore properties and Brexit woes
SINGAPORE (July 23): Expected slowdown in demand for Singapore’s residential properties due to the recent cooling measures and gloomy near-term outlook for UK projects from slow progress of Brexit negotiations have forced RHB to downgrade City Developme
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SINGAPORE (July 23): Expected slowdown in demand for Singapore’s residential properties due to the recent cooling measures and gloomy near-term outlook for UK projects from slow progress of Brexit negotiations have forced RHB to downgrade City Developments to “neutral” from “buy” with $10.50 target price.

From RHB’s latest estimates, CityDev has unsold residential inventory in Singapore of around 3,300 units, with Singapore residential segment accounting for 25% of its RNAV estimate. RHB expects the latest round of property cooling measures to adversely impact margins at its developments, and have trimmed its selling price assumptions by 5-10%.

“Projects likely to see maximum impact are Amber Park en bloc, Handy Road, West Coast Vale site and Sumang Walk executive condominium (EC) – these were purchased at higher prices, compared to neighbouring sites in anticipation of a recovery,” says analyst Vijay Natarajan in a Monday report.

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