CITY Developments (CDL) has chalked up a 28 per cent jump in third-quarter net profit to $193.6 million, thanks to strong new home sales. Revenue climbed 36.7 per cent to $940.9 million.
In the period ended Sept 30, CDL sold 854 residential units, bringing to 1,391 the total for the first nine months of the year, with a sales value of $1.72 billion – a stark contrast to the 360 units for the same period last year at $340 million.
The sales in the July to September period included 119 units at Livia and 331 units at its 396-unit Hundred Trees condo in West Coast Drive.
CDL said the proliferation of favourable low interest rates on housing loans, aided by plenty of cash in the system, played a part in motivating investors to park their money in property.
This is particularly so when banks are offering very low rates on fixed deposits.
Buying interest in the next few months is expected to be ‘relatively stable’, but not at the same frenetic level of the second and third quarters as the Government had announced market-calming measures in September.
Already, the market has turned quiet. CDL executive chairman Kwek Leng Beng attributed this slowdown to ’sentiment’.
Still, before the year is out, CDL wants to launch a 177-unit project next to its The Arte at Thomson. This will feature one- to four-bedders.
The company is reviewing its South Beach project in light of the change in economic conditions to reposition it and ensure it is ‘extraordinary’.
Property market sentiment is showing signs of recovery, but the office segment remains challenging and the hotel business may take more time to recover fully, said CDL in its statement.
Its pre-tax profit for property development almost doubled to $ 174.1 million in the third quarter, while pre-tax profit from hotel operations fell from $70.5 million to $37 million.
Pre-tax profit from rental properties slipped from $74 million to $35.5 million.
Earnings per share rose to 21.3 cents from 16.6 cents, while net asset value per share was $6.39, up from $5.97 at the end of last year.
CDL shares closed 12 cents lower yesterday at $10.08.
Source : Straits Times – 13 Nov 2009
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