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

Singapore property outlook challenging until 2020: report

Posted by Kaeden Ong on 3rd October 2014 in Blog

What does the future hold for Singapore’s property market?

According to a recent Savills report, the outlook remains challenging for the rest of 2014, and this is expected to continue over the next six years.

The report looked at how 12 world cities would perform in 2020 and gave a tough assessment of Singapore.

Although the office sector is still robust with rents increasing by 7.3 percent in the first six months of 2014, the residential market has slowed with values and rents dropping by 4.2 percent and 3.5 percent respectively during the period.

This is due to the government’s cooling measures which are continuing to put pressure on the city-state’s prime residential market.

Savills added: “Market controls are set to be a feature of Singapore over the coming years as it battles market affordability in a bid to remain competitive on the global stage.”

One factor that puts Singapore at a disadvantage is its restricted land supply, which is at odds with the increasing wealth and growing workforce.

Lower value industries may have to relocate across the causeway, where land, property and wages are cheaper.

At the same time, Singapore risks becoming more rarefied or distant from the lives and concerns of ordinary people, with Singaporeans protected by government access to housing.

Meanwhile, employers will face more difficulty in attracting and retaining young talent from overseas due to the high real estate costs.

On a positive note, Singapore’s high-tech infrastructure and proximity to some of Asia’s key growth markets will see it progressing as a world leader in business.

In fact, the World Bank has ranked Singapore as number one for ease of doing business.

The city-state also has a strong reputation in the biotech and energy sector.

Credits: Property Guru

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