Property markets have their ups and downs, but there is something to be said for being able to receive cash flow every month. Especially from commercial property which in general, has higher returns and occupancy rates than residential real estate. Singapore property has a certain kind of stability which is hard to find elsewhere in Asia.
Singapore, the smallest country in the ASEAN region, had a rough time in 2015 with property values sliding downhill. However, the lack of space on the island along with its business-friendly policies, wealth (one in six households in Singapore are millionaires), and strategic location bode well over the long term.
Singapore Property Prices Down, Long Term Fundamentals Remain
With the global population hitting 9 billion in just 20 years, more than a 25% increase from the current population, there is little uncertainty real estate prices will go up in small, wealthy city-states such as Singapore, Monaco, and Hong Kong.
For Singapore specifically, it’s just a matter of when. The nation is now facing a decrease in property prices. But demand is on an upward trend with sales surging to a two year high in 2015. A lack of land supply in the city-state means that demand will inevitably drive prices upwards.
The current fall in real estate values have led share prices of many property investment and development companies in Singapore to drop. InvestAsian believes some of them to be undervalued.
Sinarmas Stock: A Global Real Estate Firm
Sinarmas Land (SGX:A26), originating in Singapore, is engaged in the property business through operations in Indonesia, China, Malaysia, and Singapore. The firm has long-term investments in major commercial buildings, hotels and resorts.
The firm aims to become Southeast Asia’s leading property developer. With over 40 years of experience in the field, Sinarmas Land Ltd has the knowledge and ambition to capture growth in ASEAN.
A Top Performer in the Singapore Property Sector
Sinarmas Land boasts a secure structure on its balance sheet. The firm has a current ratio of 3, well above the industry average, and an approximately equal proportion of liabilities and equity. The company is in no danger of going into default and in a great place for further growth.
Financial performance is also well above the industry norm. A gross margin of 71.29% and net profit margin of 52% means the company has done well – and it’s rewarding shareholders accordingly. Sinarmas stock has a P/E of just over 6 and superb cash flow.
Currently being sold at 0.38 SGD per share, a shadow of its former self which peaked at more than 0.8 SGD just 8 months back, Sinarmas stock is a buy. InvestAsian believes it will gain back its loss and more.
Want to buy physical property in the city-state? InvestAsian has the Ultimate Guide to Buying Property in Singapore.
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