Kaeden Ong

CapitaLand’s earnings up on higher home sales

Posted by Kaeden Ong on 29th November 2016 in Blog

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Stronger home sales in Singapore and China and contributions from serviced residences and commercial properties lifted CapitaLand’s third-quarter earnings.

Net profit for the three months to Sept 30 rose 28.4 per cent to $247.5 million from $192.7 million a year earlier.

Revenue was up 27.7 per cent to $1.37 billion, thanks to increased contributions from development projects here and in China.

The developer said yesterday that higher rental income from its commercial properties here and its serviced residences business also boosted turnover.

China and Singapore remained CapitaLand’s core markets, accounting for about 83 per cent of its revenue.

“CapitaLand’s operating performance has remained robust thanks to our optimal asset mix that provides us with stability and a strong recurring income stream despite a volatile market,” said president and group chief executive Lim Ming Yan.

Its development projects The Nassim and Cairnhill Nine in Singapore, Riverfront in Hangzhou, New Horizon in Shanghai and Vermont Hills in Beijing all contributed to higher revenue in the quarter.

CapitaLand sold 206 homes here between July and September, bringing the total units sold in the first nine months of the year to 510, with a total sales value of $1.24 billion.

Sales hit 2,903 units in China in the quarter, taking the nine-month total to 9,176, with a value of 14.8 billion yuan (S$3.04 billion).

CapitaLand gave an update of the extension fees payable in this half of the year for unsold units at The Interlace and d’Leedon as at the “sell-by date” in its third-quarter earnings report.

These fees relate to Qualifying Certificate (QC) rules applying to foreign developers – including Singapore developers listed here but with foreign shareholders.

It estimated an extension fee of $2.36 million for The Interlace, which had 56 unsold units as at Sept 13, and $2.72 million for d’Leedon, assuming the 87 units still available at the end of September remained unsold by the Oct 21 deadline. The developer noted that these fees will have limited financial impact.

Quarterly earnings per share was 5.8 cents, up from 4.5 cents in the third quarter a year ago. Net asset value per share came in at $4.01 as at Sept 30, lower than the $4.21 at Dec 31, 2015.

Net profit for the nine months to Sept 30 dipped 7.1 per cent to $759.8 million, largely due to lower fair value gains from revaluation of properties and portfolio gains. Revenue was up by 12.5 per cent from the previous year to $3.4 billion.

CapitaLand expects property cooling measures to continue to weigh on the residential market here while the outlook for office occupancy and rents remains muted. Its portfolio of malls here is expected to continue to offer stable recurring income.

The counter closed three cents lower to $3.03 yesterday, after the earnings were announced.

Credits: St Property

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Property developer UOL Group is planning to launch two new residential projects in Clementi and Potong Pasir over the next two years, reported Singapore Business Review, citing a report from OCBC Investment Research.

The Clement Canopy, a 505-unit condominium in Clementi in which UOL owns a 50 percent stake, is expected to launch in the first quarter of 2017.

Raintree Gardens in Potong Pasir, which was acquired by the group via an en bloc sale with UIC Ltd, will be redeveloped into a 750-unit project that will hit the market in 2018.

UOL has seen healthy sales at its previously launched Singapore projects. The 797-unit Botanique at Bartley recorded a take-up rate of 96 percent, while Principal Garden and Riverbank @ Fernvale are 43 percent and 78 percent sold, respectively.

The three projects obtained their Temporary Occupation Permit (TOP) in September 2015 and May 2016, respectively.

With this, the group’s revenue for the quarter climbed 11 percent year-on-year to $393 million, on the back of higher topline contributions across its hotel, property development and property investment segments.

Property development revenue, for instance, jumped 19 percent year-on-year to $207 million due to higher progressive recognition from Botanique at Bartley, Riverbank @ Fernvale and Principal Garden, said OCBC.

Credits: Propertyguru

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Kaeden Ong

Developers report mixed results in Q3

Posted by Kaeden Ong on 18th November 2016 in Blog

Singapore developers posted mixed results in the third quarter of 2016, with City Developments Limited (CDL) reporting a profit increase and UOL Group registering a decline.

CDL saw its net profit for Q3 soar 60.1 percent to $170.3 million, from $106.4 million over the same period last year.

The group attributed the increase to robust sales in the property development segment, as well as gains from the divestment of its entire 52.52 percent stake in Hong Kong-listed City e-Solutions Limited.

Revenue climbed 14 percent to $922.8 million, driven by the property development segment, including maiden contributions from the Gramercy Park project in Singapore and Hanover House in the UK, as well as contributions from Coco PalmsD’Nest and The Venue Residences and Shoppes projects in Singapore.

As at 30 September 2016, CDL’s net gearing stood at 27 percent, excluding any fair value surpluses on investment properties, with $3 billion of cash and cash equivalents.

To enhance shareholder returns, CDL Executive Chairman Kwek Leng Beng revealed that the company is reviewing its asset portfolio and business model.

“We are accelerating our diversification initiatives and will continue to focus on improving the group’s performance wherever possible, across all segments – property development, hotel operations, investment properties and funds management,” he said.

“We have an exceptionally robust balance sheet and are building our war chest to capture attractive opportunities during this period of market dislocation.”

Meanwhile, UOL posted a 14 percent drop in net attributable profit to $87.1 million in Q3, due mainly to lower gross profit margin and contributions from joint venture companies.

The share of profit from associated and joint venture companies declined 35 percent to $29.1 million on the back of lower contribution from Archipelago and Thomson Three, which were completed in September 2015 and May 2016, respectively.

Group revenue, however, rose 11 percent to $393.4 million with the property development segment witnessing an increase of 19 percent to $206.6 million due to higher progressive revenue recognition from Botanique at Bartley, Principal Garden and Riverbank@Fernvale.

“Although new loans were secured to fund the group’s acquisition of 110 High Holborn in London and for advances to a joint venture company to fund The Clement Canopy at Clementi Avenue 1, these were largely offset by repayments with funds from operations,” the company said in an SGX filing.

Credits: Propertyguru

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Kaeden Ong

CapitaLand Q3 net profit up 28% to $247.5 million

Posted by Kaeden Ong on 11th November 2016 in Blog

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Property developer CapitaLand posted a total net profit of $247.5 million in the third quarter of 2016, up 28.4 percent from $192.7 million in the previous year, on the back of better operating performance.

Group revenue during the period also jumped 27.7 percent to $1.374 billion.

In an SGX filing, the group attributed the increase to higher contributions from CapitaLand’s residential business in China and Singapore, shopping malls in Malaysia and China, its commercial portfolio in Singapore, and newly acquired serviced residences.

The residential projects which contributed to higher revenue in Q3 included The Nassim and Cairnhill Nine in Singapore, New Horizon in Shanghai, Vermont Hills in Beijing and Riverfront in Hangzhou.

Earnings before interest and tax (EBIT) also rose 7.7 percent year-on-year to $494.4 million in Q3, with Singapore and China remaining as key contributors.

Looking ahead, Lim said the group will continue to grow its assets under management through capital recycling, portfolio optimisation, fund management and management contracts.

Credits: Propertyguru

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Condo sales start for Queens Peak, Parc Riviera

Posted by Kaeden Ong on 8th November 2016 in Blog

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Queens Peak, Hao Yuan Investment’s 736-unit condominium project at Dundee Road, has been warmly received by buyers, with 242 units sold during its launch on Saturday (5 November).

One- and two-bedroom units accounted for 90 percent of all the units sold, while the project’s average price stands at $1,632 psf. The lowest transacted price was $1,406 psf.

The developer attributed the encouraging sales to the project’s good connectivity to the nearby Queenstown MRT station, as well as the fact that all units are at least eight storeys above ground.

“We have received feedback from buyers that Queens Peak is an attractively priced city fringe project made affordable for mass condominium buyers,” said Tan Zhiyong, Managing Director of MCC Land, the project manager for Queens Peak.

Meanwhile, the 752-unit Parc Riviera at West Coast Vale sold more than 100 units on Saturday, offering a “one-tier pricing scheme” for units found on the lowest floor to the 15th floor, reported The Business Times.

With the average price at $1,150 psf, more than 95 percent of units sold are those that come under the one-tier pricing scheme. Around 80 percent of buyers opted for the one- or two-bedroom units.

The scheme, which was originally planned to be offered only on Saturday, did not generate further interest when it was extended to Sunday, with only a few more units sold.

While location may have played a role in the project’s sales performance, EL Development Managing Director Lim Yew Soon noted that the manner by which smaller units were distributed in the project may have also been a factor.

The smaller units at Queens Peak are concentrated on the lower floors to keep the quantums low for investors, while Parc Riviera has similar unit types from the lowest to the highest floors. The developer kept the unit-type composition consistent on each floor due to the use of prefabricated prefinished volumetric construction (PPVC).

Lim explained that it would be challenging for a project using PPVC to have different unit types stacked on top of another as this would require transfer beams and columns to be erected on each floor.

He also revealed that the project will revert to its original price list.

“We took quite a steep discount for the units on the higher floors so we can’t keep doing it all the time,” he said. “We are not planning for further discounts now. Based on the original pricing, it’s still attractive.”

Credits: Propertyguru

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Kaeden Ong

Parc Riviera rolls out one-tier prices for early buyers

Posted by Kaeden Ong on 4th November 2016 in Blog

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Property developer EL Development will offer a one-tier pricing scheme for its Parc Riviera condominium during the project’s soft launch this Saturday (5 November), reported The Straits Times.

The scheme will see units of the same type from the second floor to the 15th floor carrying the same prices.

A 603 sq ft two-bedroom unit, for instance, will be priced at $725,000, regardless of whether it is located on the second floor, the 15th floor, or anywhere in between. Units located higher up in the two 36-storey towers will have higher prices.

EL Development Managing Director Lim Yew Soon revealed that he came up with the novel strategy to give early buyers ‘maximum benefits’.

Typical early bird promotions that advertise units going for ‘$5xx,000’ usually leave buyers guessing a unit’s price as well as its level. He describes this approach as clichéd and ‘a bit old-fashioned’.

“We are telling people that the price starts from $550,000 for the one-bedroom (unit). We feel that $550,000 is an attractive price, even at the lower levels. But now that we have extended the price to 15 floors, it will be even more attractive,” he said.

Located near Pandan Reservoir, Parc Riviera comprises two 36-storey towers and a four-storey carpark. Sizes for the units range between 463 sq ft for a one-bedder and 1,711 sq ft for the biggest four-bedder. Around 64 percent of the development contains one- and two-bedroom units, said EL Development.

Lim noted that the price difference for units on the 15th and 16th levels will be ‘substantial’, by around five percent.

Meanwhile, property experts are optimistic about the scheme. In fact, PropNex Realty CEO Mohamed Ismail expects the strategy to be effective.

“This is one of the first times when a developer has dangled this type of carrot. This strategy will likely get greater interest from consumers as they have an incentive to come early to make up their minds, to get discounted prices for higher floors. There are real savings for the buyer,” he said.

Ong Kah Seng, Director of R’ST Research, on the other hand, said the strategy’s main purpose is to encourage buyers to ‘snap up’ units on the higher floors.

He added that units located on the higher floors of a 20-storey condominium are typically more expensive by up to 15 percent, compared to those located within the middle levels.

Although the scheme could mean that lower floor units may remain unsold for a while, this is immaterial since “the project would already have achieved a fairly good sales rate, resulting in the project achieving good break-even sales or even marginal profits”, said Ong.

Credits: Propertyguru

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