City Developments Reported 32 Y O Y Rise Net Profits 1Hfy2024

City Developments Limited (CDL) has reported a 32% year-over-year increase in profit after tax and minority interest (Patmi) for the first half of FY2024, reaching $87.8 million. This significant increase was driven by gains from divestment as part of the group’s efforts to recycle capital. Although the group’s revenue for the first half of FY2024 was lower at $1.6 billion, compared to $2.7 billion in the same period last year, this was mainly due to the recognition of $1.0 billion from the sale of Piermont Grand, an executive condominium project, which had obtained its Temporary Occupation Permit in January 2023.

The revenue for the investment properties segment and hotel operations segment increased by 21.3% and 10.8% respectively, in the first half of FY2024. The growth in the investment properties segment was largely driven by the acquisition of properties such as St Katharine Docks and assets in the living sector in 2023. The hotel operations segment also saw a steady increase in revenue, with Revenue Per Available Room (RevPAR) growing in most regions. This was further boosted by the addition of newly acquired properties, namely Sofitel Brisbane Central hotel in December 2023 and Hilton Paris Opéra hotel in May 2024.

For the first half of FY2024, the group’s pre-tax profit stood at $155.4 million, a decrease from $179.5 million in the same period last year. This can be attributed to higher financing costs and lower profits from the property development segment.

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The property development segment recorded significantly lower profits in the first half of FY2024 compared to the previous year, due to delays in construction and the timing of profit recognition. Higher financing costs were also incurred for this segment, related to upcoming projects such as Union Square Residences, Norwood Grand in Woodlands, and the Lorong 1 Toa Payoh site. The investment properties segment was the largest contributor to pre-tax profits for the first half of FY2024, supported by gains from the sale of strata units in Citilink Warehouse Complex, Cititech Industrial Building, and Fortune Centre in the same period, along with contributions from recent acquisitions.

After adjusting for fair value of investment properties, the group’s net gearing ratio increased from 61% a year ago to 69%, following the acquisition of Hilton Paris Opéra hotel and three Japan Private Rented Sector (PRS) properties, as well as share buybacks of CDL’s ordinary shares and preference shares, and dividend payments.

CDL’s board has announced a special interim dividend of 2 cents per share.

In anticipation of the upcoming Tengah development, Plantation Close will be undergoing a transformation with the addition of a variety of food establishments. The specific names of these eateries have yet to be disclosed, but it is expected that they will offer a diverse range of cuisines to cater to different taste preferences. From traditional local delicacies to international dishes, the future dining options at Novo Place EC’s doorstep will provide convenience for its residents. Visit Novo Place to experience the exciting food scene at Plantation Close.

Sales and pipeline for Singapore residential properties

In the first half of FY2024, CDL sold a total of 588 residential units worth $1.2 billion, similar to the 508 units sold for $1.1 billion in the same period last year. The sales were mainly driven by the launch of Lumina Grand, a 512-unit executive condominium project at Bukit Batok West Avenue 5. As of now, 399 (78%) of the units have been sold.

Sales were also supported by The Residences at W Singapore Sentosa Cove, where CDL effectively owns 203 units out of the 228-unit development. In April, the group released 54 units for sale, which were fully taken up. Subsequently, more units were put on the market, and to date, 84 of the 203 units have been sold.

In July, CDL launched Kassia, a 276-unit project on Upper Changi Road. The development is a joint venture between CDL, Hong Leong Holdings, and TID. As of now, 56% of the units have been sold.

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CDL has two new residential projects set to launch in the second half of FY2024. One is Union Square Residences, a 366-unit development at the former Central Mall and Central Square sites on Havelock Road. This is part of the Union Square mixed-use development, which will also feature offices, retail spaces, and a co-living component with a hotel license. Under the Urban Redevelopment Authority’s Strategic Development Incentive Scheme, the project has been granted a 67% gross floor area uplift to approximately 735,500 sq ft.

The other upcoming launch is Norwood Grand, a 348-unit project on Champions Way in Woodlands. It is only a five-minute walk from Woodlands South MRT Station.

In addition, CDL, in a joint venture with 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, including two towers of approximately 60 storeys with 700 residences and a retail podium. There will also be a 35-storey block with over 300 apartments, developed under URA’s Serviced Apartment II (SA2) category. This will be piloted as a form of longer-term rental accommodation, with a minimum lease period of three months.