CDL announced yesterday that it acquired a mixed site in Chongqing for RMB 540m (or RMB 4,968 psm GFA). We believe this acquisition would accrete 6 S-cents to RNAV and 4 S-cents to our fair value estimate. Last afternoon, we also visited the newly launched EC project in CCK – The Rainforest. The 466-unit project is made up of mainly 3 bedroom units, with indicative ASPs from S$720 – S$730 psf. The show-flat appeared crowded with interested buyers. ASP levels are marginally above expectations, though the project’s quality would likely translate to higher construction costs. We expect the market to be neutral/slightly positive on these events. We update our model and maintain HOLD on CDL with a higher fair value estimate of S$8.35 versus S$8.33 previously (35% discount RNAV).
Won tender for mixed site at Chongqing. CDL announced yesterday that it acquired, through a government tender on 4 Jan, a 80:20 residential:commercial mixed site in Chongqing for RMB 540m (or RMB 4,968 psm GFA). The site has a GFA of 108,686 sqm and is located in Yuzhong, the central district of Chongqing, at Huang Hua Yuan with views of the Jialing River. It is also beside a major light rail station - one stop away from the Jiefangbei CBD. We assume total development costs of RMB 14k psm and RMB 17k psm for the residential and commercial components, respectively, and ASPs of RMB 18k psm for the residential component and capital values of RMB 19.5k psm for the commercial part with a cap rate of 6.5%. Given this, the acquisition would accrete six S-cents to RNAV and four S-cents to our fair value estimate.
New EC launched at Choa Chu Kang – The Rainforest. Last afternoon, we visited the newly launched EC project in Choa Chu Kang – The Rainforest. The 466-unit project is made up of mainly 3 bedroom units, with indicative ASPs from S$720 – S$730 psf. During our visit, the show-flat appeared crowded with interested buyers. ASP levels are marginally above expectations, though the project’s high quality design and finish would also translate to higher construction costs than expected. We like that CDL has moved to launch this development expediently as further residential uncertainty encroaches and before the typically quiet Chinese New Year period ahead.
Maintain HOLD at S$8.35. We expect the market to be neutral/slightly positive on these events. In our view, management continues to execute optimally given unfavorable conditions but we see few positive catalysts ahead. We update our model and maintain HOLD on CDL with a higher fair value estimate of S$8.35 versus S$8.33 previously (35% discount RNAV).
New EC launched at Choa Chu Kang – The Rainforest. Last afternoon, we visited the newly launched EC project in Choa Chu Kang – The Rainforest. The 466-unit project is made up of mainly 3 bedroom units, with indicative ASPs from S$720 – S$730 psf. During our visit, the show-flat appeared crowded with interested buyers. ASP levels are marginally above expectations, though the project’s high quality design and finish would also translate to higher construction costs than expected. We like that CDL has moved to launch this development expediently as further residential uncertainty encroaches and before the typically quiet Chinese New Year period ahead.
Maintain HOLD at S$8.35. We expect the market to be neutral/slightly positive on these events. In our view, management continues to execute optimally given unfavorable conditions but we see few positive catalysts ahead. We update our model and maintain HOLD on CDL with a higher fair value estimate of S$8.35 versus S$8.33 previously (35% discount RNAV).
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