Published April 16, 2007

Hiap Hoe expects to stay profitable in next few years

NICHE property developer Hiap Hoe Ltd expects to sustain profitability in the next few years on the back of the robust housing demand in Singapore, managing director Teo Ho Beng told XFN-Asia in a recent interview.

'We are very confident . . . We will remain profitable,' Mr Teo said, adding that he expects private residential property prices to rise by another 10-15 per cent this year.

In the first quarter, preliminary government data showed average private residential prices rose 4.6 per cent compared to the fourth quarter, and analysts expect prices could rise as much as 20 per cent for the rest of the year.

Mr Teo declined to say how much earnings growth Hiap Hoe would deliver in the years ahead but he believes the group's land bank, which could yield some 272,000 sq ft in gross floor area, will boost earnings in the next few years.

Hiap Hoe has come a long way since it took over loss-making construction company Chew Eu Hock about four years ago. It returned to profit last year with a net profit of $12.59 million, after posting a $2.6 million net loss in 2005.

The group's 2006 earnings were boosted by sales from the 49-unit Proximo on Robin Road and the 49-unit City Edge on Moulmein Rise. The two projects jointly contributed $45.1 million to the group's $50.6 million revenue in 2006 and will continue to sustain the group's earnings through 2008, Hiap Hoe executive director Cindy Lim said.

Following the success of its two projects, Hiap Hoe is accelerating its residential project launches.

This year, it has already launched two projects - the 46-unit Cuscaden Royale on Cuscaden Walk and the 60-unit Oxford Suites on Oxford Road.

Hiap Hoe has sold more than 50 per cent of Oxford Suites following its launch during the weekend, and close to 80 per cent of Cuscaden Royale, which was launched in late February.

Hiap Hoe will only start recognising profits from these projects in 2008, Ms Lim said.

In the next 12 months, the group is targeting to launch another two to three projects in prime residential districts such as Cavenagh Road, Bukit Timah Road and St Thomas Walk.