Property stocks have taken a beating and as the rate hike cycle reaches a plateau, all the bad news may already be discounted and reflected in the low share prices. Undoubtedly, the spate of interest rate hikes has raised costs for property stocks.
Ho Bee Land’s interest expense rose 71% y-o-y to $33.2 million in 1HFY2022 ended June 30. In addition, the developer’s acquisition of The Scalpel in London in February was financed by internal resources and bank debt.
As at June 30, Ho Bee Land’s short-term liabilities stood at $1.889 billion versus $814.2 million in current assets. Based on its current ratio which comprises current assets to current liabilities and is a measure of liquidity, Ho Bee Land is way below a liquid current ratio. Interestingly, the Singapore Exchange has not queried the developer on its current ratio despite querying some Chinese REITs when their current liabilities were greater than their current assets.
