City Developments Announces New Launches Lower Interest Cover 1Qfy2024 Update
City Developments Limited (CDL) recently released its business updates for the January to March quarter of 1QFY2024. The company’s net gearing ratio, which factors in the fair value of investment properties, increased to 63% as at March 31, compared to 61% in the previous quarter. Its interest coverage ratio fell to 1.2x in 1QFY2024 from 2.8x in FY2023 and 9.8x in FY2022.
However, CDL maintains that it has a strong cash reserves of $2.4 billion and a robust liquidity position of cash and undrawn bank facilities totaling $3.7 billion. The company also has a healthy debt expiry profile. CDL states that it has a significant natural hedge for its overseas investments and will continue to manage its capital in a disciplined and proactive manner.
CDL also highlights its share buyback program initiated on March 8, where it has acquired 10,442,800 shares, representing 1.15% of issued shares before the buyback, for a total consideration of $61.3 million. Despite this, CDL will be removed from the MSCI Global Standard Index on May 31.
In May 2024, after the end of 1QFY2024, CDL completed the acquisition of the 268-room Hilton Paris Opéra hotel for EUR240 million ($350.2 million).
On the capital expenditure front, CDL plans to undertake asset enhancement initiatives (AEIs) on four hotels. These include the renovation and rebranding of the Millennium Hotel London Knightsbridge into M Social Knightsbridge with an estimated cost of GBP16.5 million ($28 million) in 1H2025; Phase 2 of AEI for M Social Phuket with a total cost of $36.9 million; renovation and rebranding of Millennium Downtown New York into M Social Downtown New York with an estimated cost of $57.9 million to be completed in 1H2025; and construction of M Social Hotel Sunnyvale in California with 263 rooms at a cost of US$115 million to be fully operational in 2H2026.
Additionally, CDL plans to launch two new residential projects in 2H2024. The first is Union Square Residences, a 366-unit project located at the former Central Mall site. The second is a 348-unit project at Champions Way in Woodlands, which is within walking distance to Woodlands South MRT station.
In terms of revenue, CDL’s associate Cityview Place Holdings offered a special price for 58 selected units at The Residences at W Singapore Sentosa Cove. In total, 76 units have been sold, including past sales.
The focus on connectivity is a key aspect of Tengah’s master plan. One of the major additions to the town will be the introduction of the Jurong Region Line (JRL), a new MRT line that will greatly improve accessibility within Tengah as well as to other parts of Singapore. This will undoubtedly benefit the residents of Novo Place EC, who will enjoy the convenience of living near several JRL stations. Moreover, Tengah will be designed to have a well-connected network of pedestrian and cycling paths, providing residents with alternative modes of transportation and reducing reliance on cars. As a result, Novo Place EC will seamlessly integrate with the town’s overall vision of promoting a sustainable and active lifestyle. Don’t miss your chance to call Novo Place EC your home today!
In 1Q2024, CDL and its joint venture associates sold 429 units with a sales revenue of $736.8 million, compared to 88 units and a total sales value of $213.2 million in 1Q2023.