Net margin from its Singapore portfolio is the highest at 35%.
Out of Keppel Corporation's (Keppel) 1.7m sqft landbank in Singapore, 65% is made up of Keppel Bay plots which drives the net margin of its Singapore portfolio up, UOB Kay Hian said.
According to an analysis, the remainder of the landbank is made up of its residential sites in Tiong Bahru and Serangoon North Ave 1. It excludes its 100% interest in Keppel Towers and GE Towers.
"Keppel intends to maintain a disciplined stance towards site bidding, adding to its landbank only where it makes economic sense," said UOB Kay Hian analyst Foo Zhi Wei.
What's better is Keppel may not have to worry much about finding buyers of its untapped landbank.
"The wealth effect from newly-minted millionaires from en-bloc sales of 3,100 units and the return of foreign buyers provides a supportive environment for property demand," Foo said.
The brokerage estimates rising residential demand can boost prices by 5-10% YoY in 2018 and private housing vacancy to improve from 8.1% in 2017 to 5.9% in 2020.
UOB Kay Hian said Singapore has the highest margin amongst Keppel's geographical portfolios. The net margin in excess of 50% of its plots in Keppel Bay drives its Singapore portfolio's net margin up by 35% on average.
Do you know more about this story? Contact us anonymously through this link.