April 26, 2007

Keppel Land earnings soar 72% to $62.5m

Developer benefits from roaring home sales and uptrend in S'pore office market

By Joyce Teo, Property Correspondent

BOOMING home sales in Singapore have largely sent first-quarter net profits at Keppel Land (KepLand) rocketing up 72 per cent to $62.5 million, the company reported yesterday.

Singapore's contribution to the net amount for the three months ended March 31 was $45.2 million, up 162.8 per cent from $17.2 million a year ago.

This was largely the result of recent sell-out launches at the 428-unit Marina Bay Residences and the 175-unit Sixth Avenue Residences.

KepLand also recognised profit from two other projects, Park Infinia at Wee Nam and Urbana, which still have unsold units.

Sales hit $295.4 million, up 148.3 per cent from $119 million a year ago.

Earlier this month, the firm launched the 1,129-unit, 99-year leasehold Reflections at Keppel Bay. It has released only 350 units and sold about 90 per cent at prices averaging around $1,900 per sq ft (psf). The highest price achieved was $2,550 psf, it said yesterday.

The developer is also benefiting from the uptrend in Singapore's office market, where occupancies of grade A buildings are near full capacity.

Grade A office rentals rose to $10.60 psf at the end of March, up from $8.71 psf in the final quarter of last year.

'Robust demand and limited new supply of office space will continue to push up rentals and occupancies over the next few years,' said KepLand in its results announcement yesterday.

The firm last week signed up its first major tenant for phase one of its Marina Bay Financial Centre (MBFC), which has 1.62 million sq ft of net lettable area of office space.

It is developing MBFC together with Cheung Kong Holdings and Hongkong Land.

The consortium will also develop phase two of MBFC, which could add about 1.5 million sq ft of office space to the market, market sources said.

In addition, KepLand is expanding into the growing property markets of China, Thailand, Vietnam, Indonesia and India.

It said Asia's housing demand continues to grow steadily, underpinned by healthy economic growth and demographic trends.

Its residential launches in China and India saw good take-up rates in the first quarter.

Earnings per share rose to 8.7 cents from 5.1 cents a year ago. Net asset value per share was $2.31, up from $2.21 at the end of last year.

KepLand expects to launch another 189 units of Reflections at Keppel Bay and a further 102 units of Park Infinia at Wee Nam. It will also launch 15 units at The Crest @ Cairnhill and 34 units at The Tresor on Duchess Road.

More projects in China, India, Vietnam and Indonesia will also be launched.

KepLand shares closed at five cents lower at $8.50 yesterday. The results were released after the market closed.

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