Oxley sold homes worth S$1b; expects 12-19% net margins for new launches

Tue, Jul 10, 2018

OXLEY Holdings, one of the most highly-geared developers listed in Singapore, has sold S$1 billion worth of residential units from five project launches here so far this year.

Net profit margins from these projects range from 15 per cent to 25 per cent, the homegrown developer said in presentation slides filed with the Singapore Exchange.

Overseas, Oxley has attained S$446 million in revenue in project launches. The group has another S$3.1 billion worth of overseas projects to be launched this year.

The estimated gross development value (GDV) of all Singapore projects to be launched this year, including the stakes of its consortium partners, has been revised down to S$4.8 billion in response to the latest cooling measures, representing a drop from the previous estimate of S$5 billion.

These figures were released by Oxley on Monday in response to queries from investors on the impact of property cooling measures here.

The group has one of the largest Singapore residential landbank among developers. It is sticking to its plans to launch the entire portfolio of over 3,900 units this year. This portfolio size includes stakes of consortium partners.

Based on Oxley's effective stakes in these projects, some 1,900 remaining residential units to be launched or sold are attributable to the group. Despite the cooling measures, Oxley expects 12-19 per cent net margins for its upcoming launches here.

In a move that surprised the market, the Singapore government tightened additional buyer's stamp duties for most categories of buyers and lowered loan-to-value limits that became effective on July 6.

This dealt a heavy blow to developers' stocks last Friday, but many recovered on Monday. But Oxley shares continued to slide, shedding 4.3 per cent to a one-year low of 33 cents. With a net gearing ratio of 2.4 times as at March 31, Oxley is among most highly geared Singapore-listed developers. Its S$1 billion corporate bonds have maturity dating from November 2019 to January 2022. Its S$300 million retail bonds will mature in November 2019.

Oxley said that as of Monday, its total unbilled progressive billings from projects globally that had been launched work out to S$3 billion.

While its residential land at S$1.5 billion (based on effective stakes) makes up 43 per cent of its exposure to the Singapore market, its exposure to hotel, office, retail and industrial segments will enable the group to benefit if investment interest flows into these segments, said Oxley executive chairman and CEO Ching Chiat Kwong. The group has also acquired residential sites here at relatively lower prices than other developers, he observed.

The group's exposure to overseas markets has also outgrown that of the Singapore market. Going by effective stakes, its overseas projects' remaining GDV stands at S$10 billion, compared to S$2.6 billion of remaining GDV for Singapore projects.

Oxley said it is expecting net cashflow of S$1.77 billion from overseas projects from now till 2020, assuming these projects are fully sold.

All of its overseas land and properties are ungeared except for a residential-cum-hotel project in Cyprus and a mixed-use development in Kuala Lumpur, each of which is 50 per cent geared.