SINGAPORE (July 10): Pollux Properties, the premier luxury property developer, holds several investment properties following its acquisition of Pollux Alpha Investments in Nov 2017.

See: Pollux Properties to undertake $145 mil new share issuance to acquire PAI Group

This acquisition includes The MacDonald House and 14 other residential properties, all located in Singapore’s prime district areas.

On top of the group’s existing 96 serviced apartments and two retail investment properties along Balestier Road, the group is now less prone to the volatility of property development sales.

In an unrated Tuesday report by SAC Advisors, analyst Terence Chua says, “It is poised to enjoy greater income stability from the recurring income of its serviced apartments and rentals.”

According to Chua, this acquisition represents a shift away from the uneven nature of the property development and into the stability of property investment, as the Group continues to tap on the potential of the properties’ high occupancy rates.

Furthermore, rental index for non-landed units in the core central region (CCR) of Singapore has increased by 0.58% q-o-q, the largest increase in five years.

This was attributed to the increasing number of residents seeking for temporary or permanent housing due to the en-bloc fever, coupled with the decreased pipeline supply in the prime districts of Singapore.

Colliers International also reported that strong economic fundamentals are driving an uptick in the demand for office rental in the central business district (CBD) this year.

“Hence, with the heightened leasing demand for both residential and commercial units, it ensures that the group’s investment properties are able to consistently achieve a high occupancy rate,” says Chua.

However, the Singapore government has recently announced cooling measures on the residential property market.

See: Singapore raises ABSD, tightens LTV after strong property price gains

These include an increase in Additional Buyer’s Stamp Duty (ABSD) rates (except for Singapore Citizens and PRs making their first residential purchase) and tightening the Loan-to-Value (LTV) limits for all housing loans granted by financial institutions.

The analyst believes that the group’s strength in ensuring the timely construction and the sales of its developmental properties alleviates the risk of Pollux incurring hefty penalties.

As at 11.08am, shares in Pollux are trading at 2.4 cents.