Scale model of Lake Grande condominium in Singapore. (Photo Christopher Chitty)
Hongkong Land Holdings announced on Thursday (3 August) that its net profit surged 147 percent to US$3.13 billion in H1 2017 from US$1.26 billion during the same period last year.
The significant increase is attributed to a net gain of US$2.61 billion arising from the revaluation of the company’s investment properties.
“The group’s investment properties produced an increased contribution due to higher average rents achieved in Hong Kong. Of the group’s development properties, being residential and mixed-use projects developed for sale in the short to medium-term, higher sales completions led to increased profits in both mainland China and Singapore,” noted the company.
“The good performance of the group’s investment property portfolio is expected to continue in the second half of the year, although the contribution from development properties will not benefit from further sales completions in Singapore,” said Hongkong Land Chairman Ben Keswick.
In the first half of the year, its underlying profit rose 32 percent to US$517 million from US$393 million, while revenue jumped by about 66 percent to US$1.3 billion compared to US$782.8 million in the same period a year ago.
As of 30 June 2017, the company recorded US$1.42 billion in unrecognised contracted sales, versus US$1.08 billion at the end of 2016.
In China, the group entered two new markets in H1 2017. In February, it agreed to jointly develop a 494,000 sq m mixed-use site in Wuhan, where it holds a 50 percent stake. In April, it entered into a contract to jointly undertake a 217,000 sq m mixed-use project in Nanjing, where it owns a 33 percent stake. Both will be developed over multiple stages until 2021.
In Singapore, Hongkong Land recognised profits from the 699-unit Lakeville project, which was completed in the first half of the year.
Pre-sales also continued at Lake Grande and Sol Acres with strong results. Moreover, the group secured a 98,000 sq m residential site in May 2017, and this project is anticipated to be completed by 2021.
Meanwhile, its three JV residential projects in Indonesia are progressing on schedule. Similarly, construction work is on track for its 40 percent owned 182-unit luxury apartment in Manila and another 40 percent owned mixed-use project in Cebu.
In Thailand, Hongkong Land is jointly developing a 38,000 sq m residential site. Construction work on the 49 percent owned project is expected to start in early-2018, with completion targeted by 2020.