Clavon is set to launch in Q4 2020. Photo: UOL Group.
UOL Group reported a net attributable loss of $82.1 million in the first half of 2020 mainly due to fair value losses on investment properties, including serviced suites and retail malls which were significantly affected by COVID-19.
This contrasted with the $267.7 million net attributable profit registered over the same period last year.
Excluding fair value losses, the group’s operations remained in the black, with pre-tax profit at $196.8 million, albeit lower by 30% from the $282.8 million registered in 1H 2019.
As at 30 June 2020, the investment properties of the group were independently valued at a combined $11.3 billion, which works out to a 2% or $263.8 million decline from the value as at 31 December 2019.
The decline in value was seen across all the commercial properties and serviced suites of the group, reflecting the pandemic’s impact on the performance of such properties.
In the first six months of 2020, group revenue declined 28% to $908.2 million, due to lower contributions from all segments except management services and technologies which increased 32% to $122.9 million.
Hotel operations recorded the biggest decline in revenue at 57% to $136.8 million.
UOL attributed this to lockdowns and travel restrictions enforced by governments across the world, with hotels in Australia and Singapore posting the largest decline.
“The closure of PARKROYAL COLLECTION Marina Bay and PARKROYAL Kuala Lumpur for major refurbishments, and the absence of revenue from Pan Pacific Suzhou, which was sold in December 2019, also affected hotel revenue,” it said in a release.
Revenue from property development declined 29% to $379.7 million during the period under review, due to lower revenue from Park Eleven, Shanghai.
“The decline was partially offset by higher progressive revenue recognition from ongoing projects in Singapore, namely Avenue South Residence and The Tre Ver,” it said.
Revenue from property investments fell 14% to $238.8 million mainly due to the $26.3 million rental rebates extended to tenants.
Meanwhile, the group revealed plans to launch residential project Clavon in the fourth quarter of 2020.
A joint venture between UOL and UIC, the 640-unit project will sit on the Clementi Avenue 1 Government Land Sales (GLS) site acquired for $491.3 million in July 2019.
The project is located near Clement MRT station and is adjacent to The Clement Canopy, which is a fully-sold project launched in 2017.
UOL Group Chief Executive Liam Wee Sin believes there is a need to further extend the Additional Buyer’s Stamp Duty (ABSD) deadlines given that Covid-19’s full impact is yet to be felt.
“On the residential front, resumption of construction activities have been carefully paced. This, together with safe management measures, has however delayed progress of work on main construction sites and marketing suites. On top of that, social distancing requirements have limited the number of visitors in showflats and thereby affecting pace of sales. As such, a further extension of ABSD deadlines may need to be considered as the impact of the crisis has not been fully felt yet,” he said.
Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com