UOL’s management said its focus is on “Total Portfolio Management” where the Group will divest non-core assets and reinvest in higher-yielding ones, demonstrating the Group’s ability to deploy capital effectively. “As part of the Group’s overall strategy, different options to create, improve and unlock shareholder value are evaluated. The Group is open to exploring a REIT structure, however this is dependent on market conditions,” it added.
During the AGM, an investor, Sasono Adhiguna, noted that UOL seemed to be the only major property developer in Singapore that did not own a REIT. Group CEO Liam Wee Sin replied that UOL may consider establishing a REIT under the right market conditions.
Sasono further questioned if the group establishes a REIT, which market segment would it consider and what would be the right market conditions. Liam replied that the company had a good pipeline and matured real estate assets and would evaluate all possibilities. Key factors would include interest rate and property yields. Group Chairman Wee Ee Lim pointed out that market sentiment and having the right timing for such an exercise were also important considerations.
According to the CLSA report a REIT is one of UOL's “two major catalysts on the horizon", the other being the redevelopment of Marina Square. "These could help to narrow the and a potential REIT spinoff as two catalysts in the near to medium term that could narrow the current 58% discount to RNAV.”
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CLSA points out that 86% of the group’s total assets worth $22.8bn are in Singapore, namely from the residential, office, retail and hotel segments. As of Jun 30, the group has $12.7 billion worth of investment properties mainly from its office portfolio in Singapore, CLSA points out. In 1H2025, UOL announced a $9.9 million fair value loss on the back of lower valuations in Australia and UK, offset by gains in Singapore.
“Comparing to peers’ portfolios, we note that UOL’s portfolio is on aggregate valued at $2,373 psf which is 14-17% below the portfolios of CICT, Suntec Reit and Keppel Reit. Arguably, UOL’s portfolio may be more dated than the peers; hence, the uplift to book value might not be significant under current market conditions, in our view,” the CLSA report says.
Nonetheless, both Suntec REIT and Keppel REIT are trading at discounts to NAV. CLSA observes that Suntec REIT traded above book in 2017 and Keppel REIT traded a lot closer to book at the same time.
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“With the office market improving on the back of both easing supply and interest rates, we believe office REITs could trade closer to book, implying around 30% upside potential from current levels if both macro conditions are conducive over the next three years.”
During a results briefing, Liam said UOL had been given provisional permission to redevelop Marina Square under the Strategic Development Initiative (SDI). DBS estimates this would lift the site’s valuation by three times.
On the residential front, CLSA says the sellout in ParkTown Residences earlier this year has propelled UOL to a leading market share of 23% by 1H2025. Skye @ Holland is expected to launch in 3Q2025. Its location in district 10 is likely to be popular with buyers, market watchers reckon. Analysts have estimated that UOL is set to sell at least 1,500 units this year.
CLSA has initiated coverage on UOL with an Outperform rating and a $10.50 target price. UOL closed at $7.30 at mid-day on Sept 5, up 41% this year, but still lower than the NAV of $13.59.
