Developers need to find new ways to improve value

LOCALLY listed property developers keen to arrest persistent undervaluation may need to take a leaf out of CapitaLand's book and consider different formats for their listed vehicles. The current go-to means of improving value - share buybacks, recycling capital via real estate investment trusts (Reits), and even privatisations - are not living up to investor expectations.

In March, CapitaLand said it would place its development business under private ownership while consolidating its investment management platforms and lodging arm into a newly created entity to be listed on the Singapore Exchange (SGX).

CapitaLand shares rose as much as 16 per cent to S$3.85 after the announcement. They have fallen since but remain above where they were before the deal was announced, ending Friday at S$3.51 or 0.8 time book value.