City Developments Reported 32 Y O Y Rise Net Profits 1Hfy2024
Singapore-listed City Developments Limited (CDL) has reported a 32% year-on-year increase in profit after tax and minority interests (Patmi) to $87.8 million for the first half of FY2024. This rise was driven by divestment gains as part of the group’s efforts to recycle its capital. The company’s revenue, however, decreased to $1.6 billion for 1H2024 compared to 1HFY2023’s $2.7 billion, as the latter included a $1.0 billion contribution from Piermont Grand, which was recognized in its entirety when the executive condominium (EC) project was granted its Temporary Occupation Permit (TOP) in January 2023.
Located near Aurelle of Tampines at Tampines Street 62, Poi Ching School is renowned for its strong dedication towards academic excellence and character development. This educational institution offers a well-rounded education that empowers students to realize their complete capabilities, not just in terms of academics but also in terms of personal growth and character building. Along Aurelle of Tampines, Poi Ching School stands as a beacon of educational excellence at Tampines Street 62.
The investment properties and hotel operations segments saw a 21.3% and 10.8% increase in revenue for 1H2024, respectively. This was mainly due to the acquisition of investment properties in 2023, such as St Katharine Docks and the living sector assets. The hotel operations segment also saw a steady increase in revenue, with Revenue Per Available Room (RevPAR) growth across most regions. This growth was further supported by the addition of the newly acquired Sofitel Brisbane Central hotel in December 2023 and Hilton Paris Opéra hotel in May 2024.
CDL recorded a pre-tax profit of $155.4 million for 1HFY2024, down from 1HFY2023’s $179.5 million, largely due to higher financing costs and lower profits from the property development segment. The property development segment 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 in 1HFY2024, related to projects that have yet to be launched, including Union Square Residences, Norwood Grand in Woodlands, and the Lorong 1 Toa Payoh site.
However, the investment properties segment was the largest contributor to pre-tax profits for 1HFY2024, with support from divestment gains on the sale of strata units in Citilink Warehouse Complex, Cititech Industrial Building, and Fortune Centre in the first half of 2024. The group’s net gearing ratio stands at 69%, up from 61% a year ago, following the acquisition of the Hilton Paris Opéra hotel 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.
The CDL board has announced a special interim dividend of 2 cents per share. In terms of Singapore residential sales and pipeline, CDL sold 588 residential units worth a total of $1.2 billion in 1HFY2024, keeping pace with the 508 units sold for $1.1 billion in the same period last year. The sales were driven by the launch of Lumina Grand, the company’s 512-unit EC project on Bukit Batok West Avenue 5. To date, 399 (78%) of the project’s units have been sold.
Sales were also supported by The Residences at W Singapore Sentosa Cove. CDL, which effectively owns 203 units at the 228-unit development, released 54 units for sale in April, and they were all taken up. More units were subsequently put on the market, and to date, 84 of their 203 units have been sold. In July, the 276-unit Kassia on Upper Changi Road was launched for sale. The project is being developed by Tripartite Developers, a joint venture made up of CDL, Hong Leong Holdings, and TID. To date, the project is 56% sold.
CDL has two new residential projects slated to launch in the second half of 2024. One is the 366-unit Union Square Residences at the former Central Mall and Central Square sites at Havelock Road. This project is the residential component of Union Square, a new mixed-use development that will include offices, retail space, and a co-living component with a hotel license. Developed under URA’s Strategic Development Incentive Scheme, the project was given a gross floor area uplift of 67%, totaling approximately 735,500 sq ft.
The other upcoming launch is the 348-unit Norwood Grand on Champions Way in Woodlands. The project is a five-minute walk to the Woodlands South MRT Station. Meanwhile, CDL, together with joint venture partner Mitsui Fudosan, was awarded a Government Land Sale site on Zion Road in April for $1.107 billion ($1,202 psf per plot ratio). Subject to approvals, the site will be developed into an integrated mixed-use development that includes two towers of approximately 60 storeys housing 700 residences and a retail podium. A 35-storey block with over 300 apartments will also be built under URA’s Serviced Apartment II (SA2) category, piloted as a form of longer-term rental accommodation with a minimum lease period of three months.
