Investor sentiment towards property developers has “markedly improved”, say the DBS analysts in an Oct 7 report, and they expect this momentum to continue. “Key catalysts include regulatory support for capital market reforms, developers’ ability to unlock value through asset divestments and redevelopments, and consistently strong pre-sales in residential projects offering robust income visibility in the coming years.”
In addition, recent and prospective dividend increases by City Developments Limited (CDL), UOL Group and GuocoLand highlight a growing emphasis on delivering higher shareholder returns, note the DBS analysts.
“A wave of value-unlocking activities is currently underway, and developers’ increasing dividends, with potential for further increases, signal that the current P/B and P/RNAV multiples — which remain below historical means — are unjustified and could begin to narrow as these initiatives materialise soon,” says DBS.
The recent divestment of MCL Land to Sunway Group by Hongkong Land at book value also serves as another data point indicating that current sector discounts are “unwarranted”, they add.
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Top picks outperform STI
UOL, CDL and GuocoLand are Tan and Foo’s top picks among developers. With “buy” calls on all three, DBS has target prices of $8.80 for UOL, $9 for CDL and $2.50 for GuocoLand.
UOL remains focused on strengthening recurring income streams through asset enhancement initiatives (AEIs) at West Mall and Singapore Land Tower, refurbishments at Pan Pacific Perth and PARKROYAL Parramatta, and redevelopments at Faber House and Clifford Centre.
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Following a dividend increase in FY2024 from 15 cents to 18 cents per share, supported by higher recurring income with a payout policy of 20%-50% of operating patmi, DBS sees scope for further upside as recurring income continues to grow.
Meanwhile, CDL has announced over $1.5 billion in planned divestments slated for completion by end-2025, although some transactions may extend into early 2026.
Proceeds from these disposals could also pave the way for higher shareholder returns, says DBS, with potential upside to dividends of around 10 to 15 cents per share, following the $460 million (60 cents per share) gain from the South Beach divestment.
Over at GuocoLand, its dividend was raised from 6 cents to 7 cents per share in FY2025, supported by the stabilisation of Guoco Midtown.
“With its recurring income base expected to expand further, driven by the upcoming opening of Lentor Modern Mall in January 2026 which has already secured an 85% commitment rate, alongside sustained positive rental reversions across its CBD Grade A offices, there is potential for additional dividend hikes ahead,” says DBS.
Year to date, UOL is up nearly 50%, CDL more than 30%, GuocoLand over 40%, and Frasers Property Limited (FPL) around 15%, reflecting renewed investor confidence and interest in the developer sector.
This significantly outperformed the broader market, as measured by the Straits Times Index (STI), which has also climbed to an all-time high.
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Notably, the rally has also outpaced the recovery seen in the S-REIT sector, where recent momentum, while positive, has been more subdued amid lingering uncertainty over the pace of the US Federal Reserve’s rate cuts heading into 4Q2025, write Tan and Foo.
The analysts are also broadening their focus to the mid-cap space. In this segment, developers may shed non-core assets to return capital or even restructure to optimise returns.
Tan and Foo are monitoring updates on Hotel Properties Limited (HPL) regarding the stake sale of its Orchard Road assets, an initiative that could unlock up to SGD3.50 in cash per share. DBS has not rated HPL but the analysts have a $5 fair value estimate on the developer founded by Ong Beng Seng.
Meanwhile, unrated Ho Bee Land has deep value, with P/B of 0.4x, and its potential securitisation strategy could optimise shareholder returns, say Tan and Foo.
The unrated Bukit Sembawang, with a P/B of 0.7x, has close to $2.20/share in cash that could be returned to shareholders, according to DBS.
Robust residential sales
2025 has unfolded as a year of “meaningful volume recovery” in Singapore’s residential market, says DBS. A robust launch pipeline has fuelled strong buyer demand and new launch transactions (including executive condominiums) have surpassed 9,000 units.
For new launch transactions in 2025, more than half were within the $1.5 million to $2.5 million price range, which DBS calls a “sweet spot”. “Higher mortgage rates, tighter borrowing limits, and the dampening effect of the 60% Additional Buyer’s Stamp Duty (ABSD) on foreign buyers have narrowed overall price differentials across regions. Despite varying unit prices per sq ft, the median price quantum generally falls within this ‘sweet spot’.”
The listed developers are “strategically positioned” with “substantial” upcoming launches, say Tan and Foo. UOL, CDL and GuocoLand each have close to 2,000 units in their pipeline, representing an estimated total gross development value (GDV) of around $5 billion each.
“Given the sustained residential sales momentum, we anticipate an RNAV accretion ranging from 0.5% to 7%, ensuring strong earnings visibility for these developers,” write the DBS analysts.
Charts: DBS Group Research
