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CapitaLand Q1 profit rises 41% on gains in home sales

Posted on 27 Apr 2013 | Comments Off

CapitaLand, Southeast Asia’s biggest developer, said first-quarter profit rose 41% on higher home sales in Singapore and China.

Net income climbed to $188.2 million in the three months ended March 31, from $133.2 million a year earlier, the Singapore-based developer said in a stock exchange statement today. Sales rose 3.2% to $661.9 million.

CapitaLand is reorganizing into four main units to help focus on its key markets and has said it may exit some projects in the U.K., India and the Middle East. The developer in January said it will focus on China and Singapore, its two biggest markets by assets.

“We will sharpen our focus on the two key markets of Singapore and China for sustainable growth,” Lim Ming Yan, president and group chief executive officer at CapitaLand said in the statement. “The group’s recent streamlining in January allows us to be more nimble and able to respond more quickly to market opportunities.”

CapitaLand said it sold 544 residential units in the island state valued at $1.3 billion in the quarter, matching the sales value for all of last year. Its China business sold 955 units for about $400 million, a threefold increase over the same period a year ago.

Singapore’s March home sales rose to a record as more developers started marketing new residential projects, raising concerns the government will introduce more cooling measures to tame property prices.

Prices climbed to a record in the first quarter, according to government data on April 1. The latest measures in January, the seventh round of curbs in about four years, included an increase in the stamp duties for home buyers by 5%age points to 7%age points.

CapitaLand’s two core markets of Singapore and China accounted for 81.2% of the group’s profit before interest and tax as of March 31, the company said today.

The shares gained 2% to $3.65 at the close in Singapore, before the results were announced.

Source : TheEdge – 26 Apr 2013

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Posted in Developers, Property Market / Real Estate

Tagged Capitaland, Cooling measures, Singapore Residential Property

Foreigners adjust budgets to buy Singapore properties

Posted on 13 Apr 2013 | Comments Off

Foreign buyers of Singapore properties have not totally fled the market, despite the higher taxes that they have to pay following tough cooling measures.

More are finding it worthwhile to adjust their budgets, just to get their hands on their dream homes.

A market flushed with cash and low borrowing rates has made investors all over the world to seek safe havens in Singapore properties in the last few years.

This has propped property prices faster than economic growth can catch up.

It has also led the government to come up with a series of cooling measures.

Among them is the introduction of Additional Buyer’s Stamp Duty (ABSD).

When an ABSD of 10 per cent was first imposed on foreigners buying Singapore property in December 2011, the number of foreign buyers dipped 73.3 per cent on-quarter in the first quarter of 2012.

But when the ABSD was raised to 15 per cent in the seventh round of cooling measures introduced in January, the number of foreign buyers decreased at a slower rate of 15.9 per cent.

DWG’s senior research manager, Lee Sze Teck, said: “For the previous cooling measures, when the government came out with that, foreigners were shocked they had to pay ABSD – Additional Buyers’ Stamp Duty – on their first property purchase.

“This time round, when the revised ABSD came out, it is only an increase in the tax rates. So in a way it is more acceptable to them. So the dip in foreigners is less pronounced than the dip in Singaporeans and permanent residents.”

From January 12, Singaporeans must pay ABSD of 10 per cent on their second property and permanent residents 5 per cent on their first property.

Still, foreigners who are exempted from paying ABSD – mainly those from countries which have Free Trade Agreements with Singapore – could be a potential market for developers.

DTZ’s associate research director, Lee Lay Keng, said: “For foreign buyers, I think they (the developers) can look at the groups of foreign buyers that are not affected by ABSD measures, the ones that have the same tax treatment…US citizens, nationals from Iceland, Switzerland, Norway and Lichtenstein.”

Most analysts Channel NewsAsia spoke to said it would take some months for a clearer direction of where the property market is heading after the seventh round of property measures was imposed in January.

Demand could still come from a large pool of first-time Singaporean buyers who are unaffected by any cooling measures, which are fast becoming a norm in Singapore and Hong Kong.

Source : Channel NewsAsia – 13 Apr 2013