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Real Estate India
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Indian Realty Cos Will Lead Others in Asia
| August 13, 2007 |  (1 votes, average: 5 out of 5) Loading ... |
There is no harm to existing large real estate stocks from the rush of initial public offerings (IPOs) in the sector, say industry experts.
As opposed to this, large property developers in India are bullish on to push their financial growth than their counterparts in the Asia Pacific region for the next few years.
Stocks of realty majors such as DLF, Parsvnath Developers Ltd, Anant Raj Industries Ltd, Ansal Properties Ltd, Sobha Developers, Unitech Ltd, and others are likely to perform better than those in other prime Asian markets like China, Hong Kong, Singapore, and Malaysia, says top property developers in the Asia Pacific region report compiled by JP Morgan, one of the world’s leading investment banks.
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Growth Report of Real Estate Cos
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Developers
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Market Capitalization
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Return on equity (in %)
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2007
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2008
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India
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DLF
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25,115
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53
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39
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Unitech
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10,627
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22
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39
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Parsvnath
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1,602
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34
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42
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Sobha Developers
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1,538
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25
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27
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Anant Raj
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1,036
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22
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24
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Ansal
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784
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34
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46
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Sector weighted avg.
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42
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39
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China
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China Vanke
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23,222
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20
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23
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China Overseas Land
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15,192
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19
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22
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China Resources Land
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6,940
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7
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11
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Sector weighted avg.
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18
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22
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Malaysia
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SPSetia
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1,676
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13
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14
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EOPD
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802
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16
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11
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MK Land
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381
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1
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3
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Sector weighted avg.
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10
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10
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HangLung Properties
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15,593
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5
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8
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Henderson Land
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14,151
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6
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5
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Cheung Kong Hdg
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33,006
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12
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6
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Sector weighted avg.
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7
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7
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The average return on equity (RoE) of the top six Indian realty companies stands at 42% in the current year. However, it is considerably higher than the 18% RoE which was estimated for the Top 3 real estate stocks in China. And, the average RoE of the top 3 realty majors in Malaysia and Singapore stand at 10% and 7% respectively.
The Top 3 real estate developers in India are capitalized at $37.3 billion whereas top 3 developers in China have a combined capitalization of $45.3 billion on the Shanghai Stock Exchange.
According to a CLSA report, dated 6 August, 23 realty companies have raised over $4.4 billion through public equity offerings in the Indian real estate and an additional $2.6 billion from overseas share market.
Considering the Ebit margin (a measure the investors use to evaluate a company’s financial status), the average growth of large Indian realty companies hovers around 64% in 2007, whereas their net sales is likely to mark the growth by more than 246% during the same time period.
Hang Lung Properties Ltd., Henderson Land Development Co. Ltd and Cheung Kong Hdg are the top 3 real estate companies in Hong Kong. They are likely to mark the average growth of 43% in Ebit margin and 112% in sales growth.
News Published Under: Real Estate Developers |
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