Greater Southern Waterfront a boost to likes of KepCorp, MCT
Analysts say other likely beneficiaries are Frasers Comm Trust, Genting Singapore, which own properties nearby
Nisha Ramchandani
Singapore
MAPLETREE Commercial Trust (MCT) and Keppel Corp are well-positioned to benefit from the development of the Greater Southern Waterfront (GSW), analysts said, while also singling out Frasers Commercial Trust and Genting Singapore as potential beneficiaries.
In his National Day Rally speech, Prime Minister Lee Hsien Loong shared more details of plans for the 2,000-hectare GSW, which will stretch 30 km along Singapore's southern coastline from Pasir Panjang to Gardens by the Bay East, and will be developed over the next five to 10 years.
Resort island Sentosa is set to undergo a refresh, while new attractions will be built on Pulau Brani once Brani Terminal is relocated to Tuas.
A Downtown South resort - similar to the Downtown East resort in Pasir Ris - could also be constructed on Pulau Brani, which analysts believe would bolster the number of visitors to both Sentosa and VivoCity mall.
DBS analysts Derek Tan and Ho Pei Hwa wrote in a research note: "This offers significant opportunities for developers as the government looks to reshape GSW as a new live, work and play precinct starting with up to potentially 9,000 new residential development homes (public and private) at the site currently occupied by Keppel Club, on which there is a remaining two-year land lease."
The DBS analysts noted that Keppel Corp has two plots at Keppel Bay with a potential total gross floor area of 332,000 square feet, while its Corals and Reflections residential projects have unsold units totalling 412,000 sq ft.
"We estimated these represent 8 per cent of Keppel Land's RNAV and 5 per cent of Keppel Group's RNAV. Keppel certainly stands to benefit from the growth plan of GSW with potential uplift of Keppel Bay Tower's valuation as well as future residential launches in Keppel Bay area," they said.
MCT, which has office properties in Alexandra and HarbourFront as well as VivoCity, is also seen as a prime candidate to benefit in the long-run from the expected increase in residents, working population, as well as the fresh tourism elements.
RHB Research analyst Vijay Natarajan said: "VivoCity is likely to see increased footfall as a result of the build-up of residential space. Meanwhile, the development of housing should also be positive for office space along there."
While new office supply will come up in the future, it could be done in a planned manner, Mr Natarajan added. As a result, the expected increase in the working population in the area is likely to be positive for MCT.
UOB Kay Hian's director of research Jonathan Koh also expects VivoCity to benefit from the upcoming tourism attractions on Pulau Brani as well as Sentosa's rejuvenation, pointing out that as much as 91 per cent of MCT's portfolio valuation is located within the HarbourFront area, a key part of GSW.
Mr Koh added: "We expect hospitality Reits, such as CDL Hospitality Trusts and Far East Hospitality Trust, to benefit from the development of new tourism attractions and growth in visitor arrivals over the longer term."
The two DBS analysts also singled out others that would benefit from the revitalisation of the area, such as Frasers Commercial Trust - which owns Alexandra Technopark - as well as Genting Singapore, which owns integrated resort Resorts World Sentosa.
Meanwhile, Mr Natarajan suggested that the government could opt to appoint a master developer via tender for the development of GSW. "If so, bigger developers CapitaLand, City Developments Limited, UOL, Frasers Property, Far East Organization and Keppel Corp would be potential candidates," he added.
Generally, a master developer would be tasked with overseeing the master planning and development of a precinct, which could include public spaces, roads and precinct-level infrastructure systems.
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