Bukit Sembawang Estates is a ‘potential dividend powerhouse’: DBS

[SINGAPORE] Bukit Sembawang Estates has been identified as a “potential dividend powerhouse” by DBS Group Research, which sees the possibility of a special dividend of up to S$1 per share on the horizon.

On Nov 28, DBS said the property developer’s “fortress balance sheet” is a standout among Singapore developers.

With record cash reserves of S$2.25 per share and zero debt, DBS noted that the group has “exceptional financial flexibility and scope to deliver materially higher payouts”.

This prospective “bonanza” special dividend of up to S$1 – which DBS said is “well within reach” – would come on top of Bukit Sembawang’s regular annual dividend, which has historically ranged between S$0.16 and S$0.20 per share.

The potential for outsized capital returns serves as the primary near-term catalyst for the counter. DBS has a fair value target of S$5.88 on the stock, pegged to a 45 per cent discount to its revalued net asset value.

Beyond its cash pile, the developer’s valuation is anchored by a substantial land bank of more than 1.5 million square feet, DBS said.

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The developer’s track record covers over 4,600 landed homes and 1,800 private residences across prime districts and landed enclaves.

DBS estimated the gross development value of these assets at S$2.5 billion, or about S$9.54 per share, providing “multi-year income visibility” as it is progressively redeveloped.

“Given Singapore’s acute land scarcity and tightly regulated supply, the structurally tight supply-demand backdrop continues to underpin price resilience of landed properties across cycles – making Bukit Sembawang’s land bank all the more valuable,” the bank said.