However, the group saw healthy residential sales in Singapore, with total sales amounting to $2.56 billion.
City Developments Limited’s (CDL) profit after tax and minority interest (PATMI) fell 33.7% in the third quarter of 2019 to $115 million, on the back of impairment losses from two hotels and transactions costs following Millennium & Copthorne Hotels’ (M&C) privatisation.
Excluding the impairment and privatisation costs, PATMI would have dropped 11.4% for the period under review. The property developer suffered $37 million in impairment losses on two of its M&C hotels – namely, Millennium Hilton Seoul and Millennium Hilton New York One UN Plaza.
On a quarter-on-quarter comparison, revenue in Q3 2019 declined by 12.9% from $1.017 billion to $885.3 million, mainly due to the timing of revenue recognition at its property development segment. Revenue also fell by 27.7% to $2.482 billion compared to the same period last year.
CDL explained that contributions from the property development segment “tend to be lumpy as profits from some projects cannot be recognised progressively but only upon completion”.
On the other hand, CDL and its joint venture (JV) witnessed healthy residential sales. The group sold 1,130 units (including executive condominiums) in Singapore with total sales amounting to $2.56 billion. This reflects an almost 44% hike in units sold and around 64% improvement in sales value over a similar period last year.
In fact, Sengkang Grand Residences – a JV with CapitaLand – emerged as this year’s best-selling integrated project, with 232 units sold at an average selling price (ASP) of about $1,700 per sq ft (psf). The 592-unit freehold JV project, Amber Park, has sold 188 units of the 200 released to date, at an ASP of around $2,480 psf.
The 820-unit Piermont Grand executive condo (EC), Punggol’s first and only EC project launch in 2019, saw 444 units taken up at an ASP of $1,080 psf. Sales are expected to remain strong with the recent policy changes raising EC income from $14,000 to $16,000.
Meanwhile, the group revealed that its site at Sims Drive, which is being developed by JV partner Hong Leong Holdings into a 560-unit residential project, is set for launch in the first quarter of 2020.
“Although the Singapore property market continues to face challenges arising from a supply overhang, CDL’s residential launches in Singapore have achieved relatively healthy sales,” said Sherman Kwek, group chief executive officer of CDL.
“This reflects the underlying demand for homes with compelling value propositions that are anchored down by strong locations, high-quality standards and outstanding design.”
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email firstname.lastname@example.org