Can acquisitions save KSH from crumbling?

At the very least its strategically purchased joint venture stakes will help offset a weaker private construction outlook, says OCBC.

With sales flat and the market with a tendency to turn even sourer, KSH faces an uphill climb, which is helped along somewhat by its accretive acquisitions of Hong Leong Garden Shopping Centre and other similar redevelopments.

Here's more from OCBC:

Limited sales at residential projects. Sales at KSH’s residential projects remain subdued over the last quarter, with sales at the Boutiq and Lincoln suites at 73% and 79% sold respectively as of Apr 12 – little changed from 72% and 78% as of Dec 11. In addition, the number of units sold at Cityscape also remained flat over the period at 22% sold. We continue to expect headwinds in the residential segment given potential property curbs ahead and macro-economic uncertainties.

Opportunistic acquisitions to offset weaker private construction outlook. We take a favorable view on KSH having taken JV stakes in the likely accretive en-bloc redevelopments of Hong Leong Garden Shopping Centre, Seletar Garden and 11 King Albert Park. In our view, an opportunistic and active stance from management for accretive acquisitions could offset, to an extent, a weaker outlook for the construction segment ahead. We continue to expect a weaker outlook YoY in terms of domestic private construction demand, with the BCA forecast unchanged at S$8-12b for CY12 versus S$16.8b (p2011).