Property recovery boosts CityDev's profits

Singapore
February 28, 2007, 6.17 pm (Singapore time)

Property recovery boosts CityDev's profits


SINGAPORE - Real estate developer City Developments Ltd said on Wednesday its net profit for 2006 rose 75.5 per cent from the previous year as the property sector recovered amid strong economic growth.

The company posted a net profit of $351.66 million (US$229.84 million), up from $200.40 million in 2005. Revenue was at $2.55 billion, up 7.3 per cent from a year ago, it said.

'The property market has performed well during the year following its slow recovery which began at the end of 2004,' the company said in a statement, adding it expects the market momentum to continue this year.

'Whilst the recovery of the market was propelled by the high-end luxury segment, the improvement is mainly due to an improving economy, renewed confidence and pent-up demand from limited high-end supply when the property market was suffering for almost 10 challenging years.' -- AFP

Singapore Companies
Published March 1, 2007

CityDev full-year net rises 76% to $351.7m

By UMA SHANKARI


PROPERTY developer City Developments yesterday said that net profit for the year ended December 31, 2006, rose 75.5 per cent as it sold apartments at higher prices and divested four hotels to a property trust.

Net profit climbed to $351.7 million, from $200.4 million in 2005. The earnings are the highest the company has reported since 2000, and comes in above the median forecast of $335 million from five analysts surveyed by Bloomberg News.

Earnings were boosted by a $150.9 million profit recognised from the sale of four hotels in Singapore to the company's first real estate investment trust (Reit), CDL Hospitality Trusts. The Reit was listed in 2006.

CityDev's revenue in 2006 grew by 7.3 per cent to $2.5 billion, from $2.4 billion the previous year, on the back of better contributions from its property development business. The group sold 1,337 homes for $2.8 billion in all last year. This compares to 2,071 homes sold for $1.7 billion in 2005. Earnings per share rose to 37.0 cents, from 20.8 cents in 2005, while net asset value per share climbed to $5.21, from $5.12 at end-2005. CityDev declared a special dividend of 10 cents a share and a final dividend of 7.5 cents a share. Together with an interim dividend of 7.5 cents a share paid out in December, the payout for 2006 comes to 25.0 cents a share.

CityDev chairman Kwek Leng Beng yesterday also raised the possibility of selling the group's retail assets to a Reit, or injecting them into a Reit set up by the company itself.

The group's 700,000 sq ft City Square Mall, expected to open for business in 2009, has already seen interest from retail Reits listed here as well as parties looking to set up Reits, Mr Kwek said. Said CityDev: 'The group is keeping its options open and may even consider its own retail Reit at the right time.'

Similarly, for the group's office assets, Mr Kwek said he could decide to either sell them, or set up a Reit with them. 'We are looking into it (setting up an office Reit),' he said. 'Time is not against us.'

For 2007, CityDev is confident that the Singapore property market will continue to perform well. 'We have focused our priority and resources on the domestic market and are now well positioned to maximise and reap the benefits in a market that we know best, and one that is on an upswing momentum,' said the company.

CityDev will offer around 360 apartments in four projects for sale over the next four months, the company said.

It intends to launch its 59-unit luxury development at Balmoral Park/Stevens Road known as The Solitaire soon. The group will also offer around 50 units in its 110-unit luxury project on the former Kim Lin Mansion site on Grange Road, 100 apartments in the 223-unit The Quayside Isle at Sentosa Cove and 150 units in the 493-unit mid-market development on the former Parkview site - all in the first half of 2007. Together with the 341-unit One Shenton launched in January, the developer will be putting out around 700 homes in the first six months of the year.