Capitaland - A Worthwhile Investment ? (3 Months Timeframe)

With falling home sales volume, prices and coupled with expected liquidity cuts and pending interest rate hikes in the next 2 years and aggravated by the high supply in the pipeline. It seems to be turbulent times ahead for Singapore developers. 

Developer's December sales tumbled as only 259 units were purchased directly. An almost 80 per cent drop from the 1,271 units in the month of November as revealed from data from the Urban Redevelopment Authority. 

Taken from http://sbr.com.sg/residential-property/news/chart-day-december-home-sales-tumbled-80

Among the various Singapore developers; Capitaland looks to be of good value compared to its' peers; trading at ~0.8 P/B and at a relatively huge discount to RNAV at ~38%. The diversified portfolio with exposure to both Singapore and China residential, retail and commercial developments will help to brace the headwind faced by Singapore developers in the near future. 


A historical dividend yield of about 2.x and Capitaand's management share buyback at an average of S$3.0037 per Share in 2013; it should provide some cushion for any adverse price movements from the closing price of S$2.89  today. Along with expectation on recognition of its' Shanghai residential sales. There will be expectation on price movements in the near future.

(Bloomberg) CAPL trading near 52 weeks low

Summary - Capitaland

(+)
1) Relative attractive valuations: ~0.8 P/B and ~38% discount RNAV
2) Diversified Portfolio in Singapore and China Market.
3) Recognition of 2013 developments in China

(-)
1) Industry sector does not look rosy in the next couple of years
2) Expected accounting loss from Australand stake sale