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Singapore Property Market Summary

Core Content

The Singapore property market is undergoing significant transformation as the government plans for future urban development and infrastructure expansion to meet the needs of a growing population and evolving economic activities. These changes are expected to create opportunities for various developers and REITs, with benefits varying across short, medium, and long-term initiatives.

Main Points

1. Government Initiatives and Land Use Plans

• The government has announced several land-related initiatives to ensure land resources remain sufficient for future growth.
• The Master Plan 2013 is expected to be unveiled later this year and will guide development over the next 10-15 years.
• The Population White Paper and Land Use Plan suggest that Singapore will accommodate an additional 1.6 million people by 2030, with a population of up to 6.9 million.

2. Short-term Developments (Next 5-10 years)

• Railway Corridor Redevelopment: The former railway land is being repurposed for greenery and heritage, with Keppel Land potentially benefiting from the redevelopment of Keppel and GE Towers.
• Project Jewel at Changi Airport: A 1.3 million sq ft mixed development is planned for Changi Airport Terminal 1, with CMA being a potential partner. This project is expected to be completed by 2019.
• Changi Airport Expansion: New Terminal 4 will be completed by 2017, increasing capacity by 16 million passengers. Terminal 5 is planned for completion by the mid-2020s.
• OUE's Crown Plaza Changi Airport: OUE owns the only 5-star hotel in the Changi Airport complex and is building a 200-room extension.

3. Medium-term Developments (Master Plan 2013 – Next 10-15 years)

• Woodlands Regional Centre: A 100-ha live-work-play environment with commercial and residential components. This will provide opportunities for CMA, SPH, and CAPL.
• New Towns Development: Areas like Tengah, Bidadari, and Tampines North will see the development of over 80,000 new homes, enhancing the Jurong Lake District catchment area.
• Punggol Expansion: Punggol is expected to triple in size with 96,000 dwelling units, including seven waterfront housing districts. This will create opportunities for CMA and SPH.

4. Long-term Developments (Beyond MP13 – Next 20-30 years)

• Paya Lebar Air Base Relocation: The site will be redeveloped into a new town larger than Bishan and Toa Payoh. Mapletree Commercial Trust may benefit from this, especially with its properties in the new growth corridor.
• PSA Container Port Relocation: The container ports will be moved from Tanjong Pagar to Tuas by 2027, freeing up 1,000 ha of land for the development of the Southern Waterfront City.

Key Beneficiaries

Key Financial Insights

• CMA is highlighted as a top pick with a target price of SGD2.51, offering an upside of nearly 40%.
• CapitaLand and Keppel Land are recommended as BUY, with target prices of SGD4.10 and SGD4.80 respectively.
• OUE is also recommended as BUY with a target price of SGD3.40.
• SPH and CMT are expected to benefit from the medium-term plans, especially in the Jurong Lake District.
• Mapletree Commercial Trust could benefit from the Southern Waterfront City development in the long-term.

Conclusion

The Singapore property market is poised for significant transformation over the next 20-30 years, with a mix of short, medium, and long-term initiatives. Developers and REITs with exposure to key growth areas like Changi Airport, Woodlands Regional Centre, and the Southern Waterfront City are likely to benefit from these changes. The government's proactive approach to land use planning and infrastructure development is expected to drive demand for commercial and residential properties, creating opportunities for diversified players such as CMA, CAPL, and OUE.

Valuation Summary