Broker: Lim & Tan Securities
Date of Report: 5 August 2025

APAC Realty: Robust Growth Prospects, Generous Dividends, and Regional Expansion Drive Investment Case

APAC Realty Overview: Strong Market Position and Attractive Valuation

APAC Realty, the parent company of ERA Realty, commands a significant presence in Singapore’s real estate market. As the second largest real estate agency in Singapore, ERA has over 8,800 salespersons, capturing approximately 40% of total home sales islandwide. The company’s main revenue streams are property brokerage services across primary and secondary home sales, as well as residential, commercial, and industrial rentals. APAC Realty also operates training programs for professional real estate certification, further deepening its industry roots.
The company’s shares are currently trading at S$0.575, with a target price of S$0.66, representing an upside of +14.8%. The valuation is pegged to a 15.8x blended FY25F/26F P/E, which is a 10% discount to industry peers. Backed by a scalable business model and master franchise rights across 17 countries and territories, APAC Realty is poised for >90% profit growth in FY25F. With a 79% payout ratio, the prospective dividend yield stands at an attractive 6.3%.

Key Financial Highlights

Established Market Position and Revenue Drivers

– ERA Singapore has a track record dating back to 1982, with a current agent base of 8,844, representing 24% of total headcount in Singapore. – APAC Realty’s main business is real estate brokerage services, with private secondary resale transactions contributing 44% of brokerage value. – Private primary residential (new home sales) accounts for 15% of transaction value but delivers the highest margins, as its gross margins are about triple that of the resale segment. – The company also derives royalty fees from sub-franchisees in Australia, Cambodia, China, Japan, Korea, Laos, Philippines, and Taiwan, and provides training and valuation services through its subsidiary Realty International Associates.

Strong Rebound in New Home Sales Drives Earnings Growth

After a lacklustre 9M24, the Singapore property market saw a strong rebound in 4Q24 as interest rates eased, igniting pent-up demand. Notable project launches such as Emerald of Katong and Chuan Park achieved near sell-outs within days. In 4Q24 alone, 3,420 units were sold, accounting for more than half of the year’s total. This momentum continued into 1Q25, with 3,375 units sold—a 190% year-on-year jump—driven by sought-after projects like Parktown Residences and The Orie.
New home sales in 1Q25 and 4Q24 combined have already surpassed the full-year 2024 total sales volume. The market forecasts new home sales to reach 8,500–9,500 units in 2025, the highest since 2021 and a 40% increase year-on-year. These high-margin primary sales are expected to deliver a substantial earnings rebound in FY25F, especially in the first half, due to a 3–6 month revenue recognition lag.

Robust Pipeline of Upcoming Projects and Market Outlook

– The second half of 2025 is expected to see an estimated 7,300 new units launched, bringing total launches for the year to over 13,000 units (70% increase year-on-year). – ERA Singapore has secured 29 new residential projects for the year across all major regions. – Buyer confidence is buoyed by lower mortgage rates and genuine owner-occupier demand, even after July’s increase in Seller’s Stamp Duty (SSD). – Government Land Sales (GLS) remain high, with a confirmed supply of 9,755 units in 2025, 50% above the 2021–2023 annual average, ensuring a healthy supply pipeline for developers.

Expansion Across Asia Pacific: Scalable, Capital-Light Model

APAC Realty operates in 13 out of its 17 master franchise territories, spanning five of ASEAN’s six largest economies: Indonesia, Thailand, Singapore, Malaysia, and Vietnam. The company is accelerating expansion into Indonesia and the Philippines via acquisitions and franchise agreements. In 2024, ERA Indonesia acquired a 51% stake in ERA Fiesta, strengthening its presence in West Jakarta. The company also signed a 15-year franchise agreement with Upper Room Realty in Metro Manila, Philippines.
APAC Realty’s capital-light franchise network, powered by proprietary technology like the SALES+ super app and structured agent training, enables rapid, cost-effective expansion into high-growth markets. The ERA franchise network now covers nearly 24,700 advisors across 590 offices.

Generous Dividend Payouts Supported by Strong Cash Flows

– APAC Realty’s S\$40.1 million debt is matched by a cash position of S\$40.0 million, underlining its financial strength. – The company has maintained a payout ratio of 75–80% since its 2017 IPO, with a projected 79% payout over the next two years. – Investors have received 32.35 cents in dividends since IPO, with forward yields of 6.3% (FY25F) and 7.0% (FY26F). – Share buybacks—used to fulfil annual vesting under the Performance Share Plan—provide additional share price support.

Valuation and Peer Comparison

– APAC Realty trades at 14.7x forward P/E and 1.3x P/B, at a discount to industry averages of 17.5x P/E and 3.2x P/B. – Its 6.3% dividend yield outpaces the peer group median of 5.4%. – Major listed peers include PropNex, CBRE, Jones Lang LaSalle, Colliers, Cushman & Wakefield, Savills, and Sinyi Realty. – PropNex, the largest Singapore peer, trades at a higher P/B and boasts a superior 48% ROE but does not own sizable fixed assets like APAC Realty’s ERA headquarters.

Financial Health and Capital Structure

– APAC Realty’s S\$40.0 million cash pile nearly matches its S\$40.1 million in total debt, resulting in negligible net gearing. – The company has maintained strong operating cash flows since its IPO, supporting its dividend policy and share buybacks. – Interest coverage stands at a healthy 7.6x, while capital expenditure remains low, with the ERA APAC Centre headquarters as its only sizable fixed asset (acquired for S\$72.8 million in 2018).

Business Model, Technology, and Regional Mix

– The group’s business spans brokerage, rentals, capital markets and investment sales, and professional training and valuation services. – Singapore is the core market, contributing 98.3% of total revenue. Vietnam and Indonesia are the next largest at 0.9% and 0.7%, respectively. – ERA Singapore’s proprietary SALES+ super app leverages AI-powered insights and property calculators, enhancing agent productivity and client engagement.

Major Shareholders and Share Price Dynamics

– Morgan Stanley Private Equity Asia holds a 64.11% stake, with Executive Chairman Chua Khee Hak owning 8.34%. – Morgan Stanley acquired its controlling stake at S\$0.61/share in 2022 (effective S\$0.57/share post-dividend). Share price performance has been muted in recent years, partly due to weaker transaction volumes, but has rebounded to S\$0.575. – If Morgan Stanley exits upon fund expiry, its entry price of S\$0.57/share is seen as a support level, with the fund also having received 10.85 cents in dividends over three years. – Share buybacks under the Performance Share Plan amounted to 4 million shares in 2025 at an average price of S\$0.44/share, providing price support and cost savings versus issuing new shares.

Key Management

– Executive Chairman: Mr. Chua Khee Hak, industry veteran since 1990. – Non-Executive Directors: Mr. Michael Yeh (Morgan Stanley), Ms. Tan Poh Hong, Mr. Siew Peng Yim, Mr. Wong Hin Sun, Eugene. – CEO: Marcus Chu, a transformative leader focused on digitalisation. – Deputy CEO: Doris Ong, project marketing specialist with over 60,000 new homes sold across 450 projects. – Chief Agency Officer: Kevin Lim, founder of Preeminent Group (nearly 4,000 agents). – Key Executive Officer: Eugene Lim, compliance and legal expert. – CFO: Poh Chee Yong, Chartered Accountant. – CTO: Raymond Leong, technology transformation lead.

Risks and Competitive Landscape

– The Singapore real estate brokerage industry is fiercely competitive, with high agent turnover and rivalry for top performers. – PropNex leads with a 36% market share by agent count, ahead of ERA Singapore (25%). – APAC Realty’s heavy reliance on Singapore’s residential market makes it sensitive to macroeconomic cycles and government policy changes (e.g., cooling measures, interest rates). – Brand value is anchored by long-term ERA franchise rights (expiring 2050, with renewal options), but a material brand deterioration could trigger impairment of S\$110 million in intangible assets. – Technology disruption and the rise of digital/DIY platforms (e.g., Ohmyhome, Mogul.sg, HDB Flat Portal) pose ongoing challenges, although APAC Realty stresses its value-added advisory and relationship-based service.

Conclusion: Growth, Dividends, and Regional Upside

APAC Realty presents a compelling investment case anchored by: – An established and expanding market position in Singapore and Southeast Asia. – Exposure to robust, higher-margin new home sales and a healthy pipeline of upcoming projects. – Strong financials, with generous dividend payouts and share buybacks. – Attractive valuation relative to peers, with further upside potential. – A scalable, technology-enabled business model well positioned for future growth.
The company’s focus on operational excellence, strategic expansion, and shareholder returns positions it as a leading player in the region’s real estate sector, offering investors both growth and income in the years ahead.