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PROPERTY group UOL defied the gloom by posting surprisingly good third-quarter results yesterday, thanks to higher revenue from new launches.

Net profit for the third quarter rose 14 per cent to $73.5 million while revenue jumped 61 per cent to $267.9 million.

The launches of Panorama in Kuala Lumpur and Breeze by the East here earlier this year and Duchess Residences last year were the key drivers of the robust result.

They helped lift revenue from the property development segment by 229 per cent to $136.9 million - more than half of total revenue for the three months to Sept 30.

Revenue from property investments also improved 27 per cent. This was due largely to higher average rental rates at retail and office spaces in Novena Square, United Square and Odeon Towers, and the opening of the Pan Pacific Serviced Suites in April.

The share of profit of associated companies also gained 84 per cent to $15.1million for the quarter with the launches of One North Residences and Nassim Park Residences.

Earnings per share rose from 8.11 cents to 9.24 cents, while net asset value per share was $4.84 as at Sept 30, down from $4.96 as at Dec 31 last year.

For the nine months, revenue increased 24 per cent to $638.9 million but net profit fell 39 per cent to $261.4 million.

UOL’s listed subsidiary Hotel Plaza posted a modest 2 per cent revenue rise for the third quarter to $77.7 million as gains from the group’s Singapore hotels were offset by weaker performance from hotels in Malaysia and China.

Net profit for the quarter fell 4 per cent to $13.5 million. For the nine months, revenue rose 11 per cent to $243.3 million and net profit advanced 10 per cent to $44.3 million.

Despite UOL’s surprising results, the global financial crisis and a weakening external environment will likely affect the property market.

UOL said that with the tightening of credit and a weak stock market, buyer sentiment in the residential property market here would be hit.

With firms looking to scale down their activities, demand for office space will also be affected and rental rates are likely to weaken.

The slowing global economy will also hit the hotel industry here and across the Asia-Pacific region as business and leisure travellers cut down on trips.

Hotel Plaza expects its hotel revenue to decline.

Source : Straits Times - 6 Nov 2008

CAPITALAND, Singapore’s largest developer, yesterday said that net profit for its third quarter ended Sept 30, 2008 fell 25.6 per cent to $419.4 million, from $563.9 million a year ago as home sales fell.

Revenue in Q3 2008 fell to $597.2 million, down 33.3 per cent from $895.8 million in Q3 2007. Turnover was hit by lower sales revenue from development projects in core markets.

But the decline was mitigated by stronger rentals from investment properties and higher fee-based income from real estate investment trusts (Reits) and funds under management, the company said.

Earnings for Q3 2008 were also boosted by gains from the divestment of Capital Tower Beijing in China and 1 George Street in Singapore, as well as the injection of the Raffles City properties in China into the Raffles City China Fund.

The divestments also helped the company increase its cash position to $4.2 billion. But earnings were also partially offset by impairment losses for some investments in Japan and China and higher finance costs.

Earnings per share for the third quarter fell to 14.9 cents, from 20.1 in Q3 2007. CapitaLand’s assets under management stood at $24.8 billion as at Sept 30, 2008, up 18 per cent compared to the previous quarter.

For the first nine months of 2008, CapitaLand’s net profit fell 43.3 per cent to $1.2 billion, from $2.1 billion a year ago. Revenue for the first nine months similarly fell 17.0 per cent to $2.0 billion, from $2.5 billion for the first three quarters of 2007.

So far this year, CapitaLand’s Singapore residential unit has contributed the most to revenue. But buying sentiment is expected to remain cautious in Q4 2008, the developer said.

But the Singapore residential unit expects its earnings to benefit from the progressive recognition of strong sales achieved over 2006 and 2007, when the company had accelerated its launches to tap into the then-buoyant market.

Revenue recognition for The Seafront on Meyer is expected to commence in 2009. CapitaLand may progressively release units at The Wharf Residence and Latitude condominiums for sale in Q4 2008, the developer said. Its development at the former Farrer Court site is also expected to be launch-ready in 2009.

CapitaLand is well-positioned to ride out the global financial and economic uncertainties, said chairman Richard Hu.

‘It has the strong balance sheet, liquidity and diversified sources of funding necessary to act on investment opportunities that will arise in the current capital-constrained environment,’ he noted.

Chief executive Liew Mun Leong pointed out that the company divested mature properties in Singapore, China and Malaysia and increased its cash position to $4.2 billion in the third quarter. It also reduced its debt to equity ratio to 0.51, from 0.68 in H1 2008.

‘This strong balance sheet will be particularly useful in the current global financial crisis which has brought down not only Wall Street’s blue-chip financial institutions but also created in its wake a global recessionary environment,’ Mr Liew said.

‘With the situation deteriorating rapidly, we are strategically watching the distressed markets, very carefully seeking out opportunities to make the right acquisitions at the right price.’

CapitaLand will continue to seek out opportunities as before, focusing capital and human resources into its existing established sectors of residential, retail, commercial, hospitality, integrated developments and financial services in core markets, he added.

CapitaLand shares closed unchanged at $2.85 yesterday. The stock has lost 54.6 per cent so far this year.

Source : Business Times - 01 Nov 2008

PROPERTY giant CapitaLand has the resources and rainy-day cash to ride out the economic downturn as well as snap up any buying opportunities that might arise, it said yesterday.

The firm, which reported disappointing third-quarter results, said at a results briefing that it is prepared for more turbulence.

Chairman Richard Hu said: ‘CapitaLand is well positioned to ride out the global financial and economic uncertainties. It has the strong balance sheet, liquidity and diversified sources of funding necessary to act on investment opportunities that will arise in the current capital-constrained environment.

‘The group has also built up a portfolio of investment and development properties in its various private equity funds and joint ventures. At the right time, they can be monetised for good returns to our shareholders.’

Chief executive Liew Mun Leong said: ‘With the situation deteriorating rapidly, we are strategically watching the distressed markets, very carefully seeking out opportunities.’

Net profit for the three months to Sept 30 fell from $563.9 million last year to $419.4 million, a decline of 25.6 per cent.

Revenue also dived, down 33.3 per cent at $597.2 million.

Profits were hit by impairment losses on some investments in Japan and China and higher finance costs but divestment gains and higher fee-based income and rents prevented a steeper drop in earnings.

Lower sales from its projects hit turnover, particularly in China, where fewer projects were released for sale. CapitaLand China Holdings illustrated that with a 72.4 per cent plunge in revenue from last year to $83.3 million.

One landmark was that net profit for the nine months reached $1.18 billion, ‘a significant achievement in view of the difficult market conditions’, the firm said.

Earnings per share for the third quarter was 14.9 cents, down from 20.1 cents last year, while net asset value as at Sept 30 was $3.81, up from $3.54 at Dec 31.

CapitaLand shares closed unchanged at $2.85 yesterday.

Source : Straits Times - 1 Nov 2008

Southeast Asia’s largest property developer CapitaLand posted a 26 per cent drop in third quarter net earnings over a year ago.

Net profit came in at S$419.4 million due to lower sales.

Revenue in the three months ended September also fell by some 33 per cent to S$597 million.

For the year-to-date, net profit hit S$1.18 billion, down from S$2.08 billion in the same period last year.

CapitaLand said it is looking at possible acquisitions, given the current market turmoil.

Source : Channel NewsAsia - 31 Oct 2008

Next month will be a landmark one for real estate consultant and developer Surbana Corporation, for it will see the first batch of 1,000 units of its $345-million residential township in Xi’an go on sale.

Surbana and Hong Kong-based Henderson Land are joint partners for the project, which to date remains the largest single foreign investment by a Singaporean company into western China. Xi’an is the provincial capital of Shaanxi province.

Called La Botanica, the township sits on a 133-hectare plot of land close to the permanent site of the Euro- Asia Economic Forum, at the intersection of the Chanhe and Bahe Rivers.

Most of the 1,000 units in the initial phase are two-bedroom ones that go for 350,000 yuan each, and three-bedroom homes priced between 450,000 and 500,000 yuan each.

When fully developed over the next 10 years, the township will provide an estimated 30,000 apartments aimed at the mid to high-end range of the market, housing 100,000 people in total.

The 30,000 units is about 85 per cent of the number of flats in Singapore’s Toa Payoh estate.

Surbana Land (China) senior vice-president for marketing Puah Tze Shyang said yesterday that La Botanica’s first phase would be 80 per cent occupied by Xi’an residents, with the rest coming from the wider Shaanxi province.

He was speaking to BT just after Surbana gave a half-hour briefing to Singapore Prime Minister Lee Hsien Loong on the project’s development. Mr Lee was in Xi’an for a bilateral visit over the weekend.

Some of the facilities that La Botanica will have are a secondary school and two primary schools, a hospital, retail shops and a commercial hub linked to a mass rail train station.

It has been five years since Surbana first made inroads into China. Chief executive officer Tan Kiang Hwee told BT that its three other townships - in Chengdu, Wuxi and Shenyang - are all progressing well at different stages for each. These are expected to yield about 25,000 residential units.

He said that the company would not stop at just four cities and are actively looking at more opportunities. ‘We are hunting for other cities within China, perhaps a fifth and sixth location for us. Outside of China, we are pursuing places like Vietnam and India,’ he said.

Source : Business Times - 27 Oct 2008