KepLand's growth outlook to suffer housing headwinds in China

Tapering fears could make it worse.

According to CIMB, China’s housing headwinds are building up again after the recent slew of cooling measures introduced in key cities.

China residential accounts for 33% of KepLand’s GAV. Tapering fears and KREIT’s high DPU yields are also hurdles for asset recycling upside in 2014.

Here's more from CIMB:

The tier-1 cities in China, namely Shanghai, Beijing and Guangzhou, have recently introduced further measures to cool the housing market which include increasing land supply, raising the requirement of social security proofs from one year to two years within the last five years, and increasing the second home minimum down payments from 60% to 70%.

Tier-2 cities such as Shenyang, Xiamen and Nanchang have also joined in. Among the Singapore large cap developers with exposure to China, we estimate KepLand to have the highest proportion in residential at 33% of its GAV.

We expect the building up of policy risks as a substantial headwind for the group’s earnings in 2014-15 on delayed launches and lower ASPs.

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