August 25, 2008, 4.39 pm (Singapore time)

Property stocks down after UBS report

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SINGAPORE - Most Singapore property shares were down on Monday, with Southeast Asia's top developer CapitaLand sinking as much as 5.2 per cent to a two-year low, as a bearish report on the office market fuelled investor concerns the industry.

UBS analysts said in a report out late on Friday that it expects office rentals and capital values to drop as much as 34 per cent in the next four years, prompting falls in stocks such as CapitaCommercial Trust, UOL Group and Keppel Land.

'The fall has also been caused by the fall in residential prices. The market is set to soften for the next few quarters due to factors such as short selling,' said a dealer.

But dealers said City Developments is bucking the trend to rise 3.8 per cent because of its recent announcement of a $1 billion (US$708 million) Islamic bond programme by the end of this year. CityDev gained 3 per cent. -- REUTERS