Grant L. Kelley, CDL’s Chief Executive Officer. (Photo: CDL)
According to City Developments Limited (CDL), prices of prime land in Singapore are too expensive, especially those close to Orchard Road, which are expected to become pricier in the coming years, reported Bloomberg.
In its latest earnings report, the developer said it’s increasingly difficult to secure large land sites, such as the 170,000 sq ft site acquired in Grange Road for its soon-to-be launched Gramercy Park project, a 174-unit freehold condominium near Orchard Road. Even if such coveted land parcels become available, the selling price will be extremely high.
“The group was fortunate to have secured this site in the earlier years, which affords it the ability to market this product at current market rates,” said CDL. In 2006, it submitted the highest bid of $383 million for the plot, and prices of prime land in the area are expected to rise further.
According to The Wealth Report 2016 by Knight Frank, Singapore is the second most expensive place to buy an upscale home in Asia, after Hong Kong, despite the series of property cooling measures here which have brought down home prices since their implementation in 2009.
Meanwhile, CDL’s revenue declined by 11.2 percent to $723.31 million in Q1 2016 from $814.94 million during the same period a year ago, while net profit dropped 14.4 percent to $105.3 million from $123 million previously.
The decline was attributed to the lacklustre performance of its local property development business and hotel operations.
“There was reduced contribution from the group’s completed residential projects and absence of profit from The Rainforest executive condominium (EC) which was recognised in its entirety upon obtaining its TOP in Q1 2015. Hotel operations were also impacted in key gateway cities by the competitive hospitality environment, leading to lower room rates and occupancy,” noted CDL.
“Moving forward, CDL will focus on acquiring assets that can immediately contribute to our recurring income, and we will continue to seek attractive overseas investment opportunities,” added its CEO Grant L. Kelley.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
