Keppel Land H1 earnings up 56% on strong home sales
By Daryl Loo, Channel NewsAsia | Posted: 24 July 2007 2126 hrs
SINGAPORE : Keppel Land is seeing good earnings numbers, thanks to strong residential sales.
The developer booked a 55.6% jump in first half earnings to S$125.5 million.
Sales were up by almost 86.7% to S$654.6 million.
Keppel said it expects to continue reaping the benefits of the property boom, with strong demand keeping prices and rents on an upward trend in homes and offices.
The roaring demand for private residential properties has turned into strong sales for Keppel Land at its recently-launched projects.
The developer sold 600 units in the first half of this year, including 97% of the 493 units in Reflections at Keppel Bay that were put up for sale.
Private home prices jumped about 13% during the period.
Keppel said it expects the property bull run to continue in the near future.
Keppel Land's MD, Kevin Wong, said: "We see that the demand is still strong, while the supply is steady. We believe that both prices as well as rentals would continue to trend upwards in the near future.
"For the office market, again demand is strong and broad-based, while the supply is tight, so both capital values and rental values should continue to move upwards."
Keppel Land is part of the consortium that is building the upcoming Marina Bay Financial Centre, and is poised to benefit from the ongoing spike in office rentals.
The markets may have been caught off-guard by the recent hike in development rate charges, but Keppel Land does not expect this to dampen developers' appetite for en bloc sales.
Wong said: "There could be a bunch of people who think that prices would still increase further, and because of this development charge, land value now might be slightly lower.
"But I believe there are also another group of people who feel that this could be a wake-up call too, that there could be more things to come and therefore affecting the land value. So it's a mixed feeling, but I don't think it will slow down any en bloc sales."
Keppel intends to keep pursuing large-scale residential township projects, particularly in markets such as Vietnam and China.
It also wants to divest more of its buildings to K-REIT Asia property trust, into which it had already injected assets like the Bugis Junction and Prudential Towers. - CNA /ls