CDL, Ho Bee Land, CLI, HKLand: Property Stocks That Could Deliver a Satisfying Return
Physical property is a popular asset class for investors as it involves real, tangible assets.
However, if you are not comfortable taking on debt to purchase a property for investment, the alternative is to park some money in real estate companies.
The property sector has remained resilient through the pandemic and has held its value well.
Well-located, high-quality investment properties continue to generate consistent rental income, while demand continues to be strong for newly-development residential properties.
And as economies reopen, both blue-chip property developers and smaller real estate companies are poised to see a sharp business rebound.
We feature four property stocks that are well-positioned to deliver solid returns for your investment portfolio.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a global real estate company with a property network spanning 104 locations in 29 countries and regions.
The group’s diverse portfolio comprises residences, offices, hotels, retail malls, and integrated developments with total assets of S$23.9 billion as of 31 December 2021.
CDL reported a sharp turnaround for its fiscal 2021 (FY2021).
Revenue jumped 24.5% year on year to S$2.6 billion and the group turned in a net profit of S$97.7 million, reversing a S$1.9 billion loss a year ago.
CDL also achieved its highest-ever annual property sales of 2,185 residential units worth S$4.3 billion.
Its hotel operations division returned to profitability in the second half of FY2021, and the group expects a rebound this year.
A cash dividend of S$0.12 per share was declared and CDL also announced distribution in specie of CDL Hospitality Trust (SGX: J85) units valued at S$0.191 per share.
The group also plans to undertake redevelopment and rejuvenation projects for 80 Anson Road and Central Mall cum Central Square to unlock value for its shareholders.
Ho Bee Land Ltd (SGX: H13)
Ho Bee has property developments and investments in Singapore, Australia, China, the UK and Germany.
In Singapore, the group is a developer of luxury homes in Sentosa Cove and also has a portfolio of investment properties in Singapore and London.
Ho Bee reported a 61.2% year on year surge in revenue for FY2021 to S$347.7 million while operating profit soared 78.3% year on year to S$281.8 million.
Net profit more than doubled year on year to S$330.5 million, and the group declared a final dividend of S$0.10 per share.
The better performance was due to a 4.1% improvement in rental income due to positive rental reversion from its London properties.
Development profit was boosted by contributions from properties in Sentosa Cove, while the share of profits from jointly-controlled entities and associates jumped from S$55.4 million to S$115.5 million.
Ho Bee has been busy building up its residential land bank.
Last October, the group acquired three residential development sites in Australia for A$115 million.
A month later, Ho Bee snapped up a residential site in Melbourne for A$142 million.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a real estate investment manager with around S$122.9 billion of property assets under management as of 31 December 2021.
The group also has S$86.2 billion of property funds under management across six listed REITs and business trusts and 29 private funds.
CLI reported a strong set of earnings for FY2021, with revenue rising 15.6% year on year to S$2.3 billion.
The group chalked up a net profit of S$1.3 billion, reversing its S$559 million the year before.
CLI is seeing broad-based recovery across its portfolio, resulting in S$233 million of unrealised fair value gains booked in FY2021.
Last month, it announced the divestment of 79 Robinson Road, a Grade A office building in Singapore, to CapitaLand Integrated Commercial Trust (SGX: A38U) and CapitaLand Open End Real Estate Fund (COREF), for S$1.26 billion.
Upon completion of this deal, CLI will receive cash of around S$391 million and book an estimated gain of S$72 million.
HongKong Land Holdings Limited (SGX: H78)
Hongkong Land, or HKL, is a property investment, development and management group that owns and operates more than 850,000 square metres of office and luxury retail properties in Hong Kong, Singapore, Beijing and Jakarta.
The group reported a stable set of earnings for FY2021, with revenue rising 13.9% year on year to US$2.38 billion.
Underlying net profit remained flat at US$966 million, and HKL announced its FY2021 dividend at US$0.22 per share, unchanged from FY2020.
HKL has undertaken business development efforts to grow its land bank.
It secured a 50% interest in a mixed-use site in the CDB area of Chongqing, China, with an attributable developable area of 131,000 square metres.
This project will be completed by 2025.
Back in February, HKL also acquired a 49% interest in a residential site in Tanjong Katong with a developable area of 590,000 square feet.
In the same month, the group partnered with Astra International (IDX: ASII) and LOGOS to manage and develop modern logistics warehouses in Indonesia.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
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