City Developments Reported 32 Y O Y Rise Net Profits 1Hfy2024
Singapore’s leading real estate company, City Developments Limited (CDL), has announced a significant increase of 32% year-on-year in its Profit after Tax and Minority Interest (Patmi) to $87.8 million for the first half of financial year 2024. This growth was largely supported by divestment gains as part of the group’s capital recycling efforts.
For 1H2024, the company recorded a lower revenue of $1.6 billion, compared to 1HFY2023’s revenue of $2.7 billion. The latter included a $1.0 billion contribution from Piermont Grand, a project that obtained its Temporary Occupation Permit (TOP) in January 2023 and was recognized in its entirety.
The investment properties and hotel operations segments, on the other hand, saw a 21.3% and 10.8% increase in revenue, respectively, in 1H2024. This growth in the investment properties segment was mainly driven by the acquisition of St Katharine Docks and living sector assets in 2023. The hotel operations segment also showed steady growth, with a boost in Revenue Per Available Room (RevPAR) across most regions, thanks to the addition of newly acquired properties such as Sofitel Brisbane Central and Hilton Paris Opéra.
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In terms of pre-tax profits, CDL registered $155.4 million for 1HFY2024, down from 1HFY2023’s $179.5 million. This decrease was largely due to higher financing costs and lower profits from the property development segment.
The property development segment, in particular, saw substantially lower profits year-on-year in 1HFY2024 due to the timing of profit recognition. Construction delays for certain projects resulted in a lower-than-expected profit contribution in the first half of the year. Additionally, higher financing costs were recorded for this segment, related to projects that have yet to be launched.
The investment properties segment, however, remained the largest contributor to pre-tax profits for 1HFY2024, supported by divestment gains and contributions from several acquisitions. After factoring in fair value on investment properties, the group’s net gearing ratio stood at 69%, up from 61% a year ago, following the acquisition of Hilton Paris Opéra and three Japan Private Rented Sector (PRS) properties, as well as the share buyback of CDL’s ordinary shares and preference shares, and dividend payments.
Following these results, CDL’s board announced a special interim dividend of 2 cents per share.
Moving forward, CDL’s Singapore residential sales were on par with the previous year, with 588 units worth a total of $1.2 billion sold in 1HFY2024. The launch of Lumina Grand, the group’s 512-unit executive condominium (EC) project on Bukit Batok West Avenue 5, was a major contributor to these sales, with 399 units sold to date.
The Residences at W Singapore Sentosa Cove also saw strong sales, with 54 units released for sale in April and fully taken up, followed by the sale of 84 units out of their total 203 units to date. In July, CDL launched Kassia, a 276-unit project on Upper Changi Road, which has already sold 56% of its units.
The company has two new residential projects slated to launch in the second half of 2024. The first is Union Square Residences, a 366-unit project at the former Central Mall and Central Square sites at Havelock Road. The second is Norwood Grand, a 348-unit project on Champions Way in Woodlands, just a five-minute walk from the Woodlands South MRT Station.
In addition, CDL, together with joint venture partner Mitsui Fudosan, was awarded a Government Land Sale site on Zion Road in April, which will be developed into an integrated mixed-use development including residential and commercial units. This project will also have a 35-storey block with over 300 apartments built under URA’s Serviced Apartment II (SA2) category, a new long-term rental accommodation option with a minimum lease period of three months.