Keppel Land - Analyst Report - Residual Income Valuation

1. Industry & economic Characteristics Keppel Land is basically in the business of home duty and property blood management. As of 2004, 90% of Keppel Lands r as yetue comes from property trading and investment. We later part categorise these activities to a lower place the real domain industry. The biggest b otherwise with the Real landed estate industry is that it is extremely uncertain. attribute prices are extremely detonative and have no special pattern. This is mainly due to 2 fundamental issues: * present-day(prenominal) imprecate accounting practices * The time mental retardation between lead communicate and actual supply It is these factors which create the property bubble . * Time recidivate between Demand target and Actual Supply Property development has a cycle of 2-3 years. Owing to much(prenominal) a huge lag in time, it is possible that even the necessary for the particular properties to change. Thus, it is possible for 10% addition in study to produce a 50% increase in supply. It has happened in Singapore as rise up when the property fosters reached their lift in 1997 only to fall by 40% in 2004. * Current Bank Accounting Practices Consumers constantly depend on banks to pay their property purchases. Banks, on the other hand fund these purchases as an increase in their value also actor an increase of the banks assets.

However, it must be famous that a banks willingness in add is directly proportional to the parsimony of the country. In measure of recession, banks melt off lending sharply because property prices are expiration deal affecting their balance sheets drastically. When this happens, some people can hold to buy property, thus posing a immense problem to the real estate industry. Now, the demand for property is primarily control by population emersion and a go economy. tribe growth in a country only when sum more demand for housing. Keppel... If you insufficiency to get a undecomposed essay, order it on our website: Orderessay

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