SINGAPORE (Jan 3): Property developers offer good value at 0.8x P/NAV (-1 standard deviation) in an environment of high valuations, according to DBS Group Research.

“With the property market expected to remain resilient and developers under our coverage have been actively clearing inventories in 2019, we see dissipating risks to their exposure to Singapore (SG) residential market which we estimate to drop to less than 15% of RNAV based on unsold inventories,” said lead analyst Derek Tan in a Thursday report.

Furthermore, most developers were seen in 2019 to have gone on a mergers and acquisitions (M&A) spree, with more than $17 billion deals inked. Tan believes that these M&A deals would shore up earnings and further enhance geographical diversity, and in some cases add incremental recurring income.

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