Lum Chang unveils plan for One Tree Hill; FY17 profit falls

August 23, 2017

Kalpana Rashiwala

PROPERTY and construction group Lum Chang Holdings, which posted a 37 per cent drop in group net profit for the year ended June 30 to S$18.7 million, plans to redevelop the One Tree Hill Garden site into 12 freehold conventional semi-detached houses and two bungalows that will be launched for sale next year. "Hopefully construction can start in the second half of next year," Lum Chang executive director Tony Fong said.

The company's property director Peter Ow said: "Given the site's sloping terrain, we plan to develop two-storey houses with a basement for most of the units."

The Strata Titles Board approved the S$65 million collective sale of One Tree Hill Garden last Friday.

Lum Chang also expects to soon begin redeveloping the property in Little India formerly known as The Verge into a mixed development that will have 320 serviced apartments and 114,000 sq ft gross floor area of retail space (the chunk of it for food and beverage outlets).

The existing main building will be torn down while the annex block will undergo a major refurbishment.

Lum Chang has tied up with a closed-end fund of LaSalle Investment Management Asia in an equal partnership for the project, the development cost for which is estimated at nearly S$400 million.

The yet-unnamed project is targeted for completion in the second half of 2019 and the partners plan to retain the asset for recurring income.

In the UK, the group has begun on the detailed design of its student accommodation and serviced residences project at the Kelaty House site in Wembley. Construction is likely to begin next year and is likely to take three years to complete.

In Malaysia, the group is in a joint venture for a proposed mixed development project with some 250 serviced apartments and 30,000 sq ft of retail space - to be retained for recurring income - as well as about 500 apartments for sale.

Lum Chang's revenue slipped 13 per cent to S$369.02 million in FY2017 due largely to lower revenues of S$53.9 million recognised from two of the group's Malaysian developments as well as lower revenues from completed construction projects amounting to S$173.6 million. That said, the lower revenue was partly offset by higher revenue recognition of S$171.1 million for three ongoing construction projects.

The share of profits of associated companies shrank to S$1 million from S$14.56 million; in the preceding year, an associated company had completed the construction of the Twin Fountains executive condo project in Woodlands,

Earnings per share fell to 4.91 Singapore cents in FY2017 from 7.73 cents in FY2016. Net asset value per share rose to 57.91 cents as at June 30, 2017, from 55.75 cents as at June 30, 2016.

Lum Chang is proposing a final dividend per share of 1.2 Singapore cents, which together with the 0.3-cent interim dividend results in a full-year payout of 1.5 cents for FY2017. In FY2016, the payout was 2 cents comprising a 0.75-cent interim dividend and a final dividend of 1.25 cents.

The counter ended 0.5 cent higher at 35.5 Singapore cents on Tuesday.