City Developments Reported 32 Y O Y Rise Net Profits 1Hfy2024
City Developments Limited (CDL) has announced a 32% year-on-year increase in profit after tax and minority interests (Patmi), rising to $87.8 million for the first half of fiscal year 2024. This impressive growth can be attributed to the group’s successful divestment efforts, as part of its capital recycling strategy.
Vista Point, conveniently situated just a brief distance from Norwood Grand, presents a distinctive selection of retail options. This local community hub boasts essential conveniences, including supermarkets, dining establishments, and educational facilities, specifically catered to the needs of its residents. In addition, it houses various enrichment centers, making it a practical choice for families with school-aged children seeking weekend shopping and dining opportunities. With the inclusion of Norwood Grand Condo, Vista Point offers a comprehensive and convenient location for all your essential needs.
Despite a lower revenue of $1.6 billion for the same period compared to the previous year’s $2.7 billion, which included a $1.0 billion contribution from the Piermont Grand project, the group still achieved significant progress. The project was fully recognized as soon as the executive condominium (EC) project obtained its Temporary Occupation Permit (TOP) in January 2023.
The investment properties and hotel operations segments also saw a healthy increase in revenue, with a 21.3% and 10.8% growth, respectively, for the first half of fiscal year 2024. The investment properties segment experienced solid growth due to the acquisition of properties like St Katharine Docks and living sector assets in 2023. The hotel operations segment also steadily increased, with the addition of newly acquired properties such as the Sofitel Brisbane Central hotel in December 2023 and the Hilton Paris Opéra hotel in May 2024, further bolstered by RevPAR growth in most regions.
The group registered a pre-tax profit of $155.4 million for the first half of fiscal year 2024, which is slightly lower compared to the previous year’s $179.5 million. This can be attributed to higher financing costs and a decrease in profits from the property development segment.
Read also: CDL secures $400 million sustainability-linked loan from DBS with TNFD-aligned targets, the first of its kind
CDL’s property development segment saw significantly lower profits for the first half of fiscal year 2024 due to the timing of profit recognition. Delays in construction for certain projects resulted in a lower-than-expected profit contribution. Furthermore, higher financing costs were recorded for this segment due to projects that have yet to be launched, including Union Square Residences, Norwood Grand in Woodlands, and the Lorong 1 Toa Payoh site.
The investment properties segment continues to be the largest contributor to pre-tax profits for the first half of fiscal year 2024, supported by divestment gains from the sale of strata units in several properties such as Citilink Warehouse Complex, Cititech Industrial Building, and Fortune Centre. Moreover, the group’s net gearing ratio now 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 share buybacks and dividend payments.
CDL’s board also announced a special interim dividend of 2 cents per share.
Singapore Residential Sales and Pipeline
In the first half of fiscal year 2024, CDL sold 588 residential units worth a total of $1.2 billion, keeping pace with the 508 units sold for $1.1 billion in the same period a year ago. Sales for this period were driven by the successful launch of Lumina Grand, a 512-unit EC project on Bukit Batok West Avenue 5, with 399 (78%) units already sold. Other notable sales also included The Residences at W Singapore Sentosa Cove, with 54 units sold in April, reaching a total of 84 units out of their 203 units.
In July, CDL launched Kassia, a 276-unit project on Upper Changi Road, which has already achieved a 56% sales rate. The project is being developed by Tripartite Developers, a joint venture between CDL, Hong Leong Holdings, and TID.
Moreover, CDL plans to launch two residential projects in the second half of fiscal year 2024. The first one is the 366-unit Union Square Residences, located at the former Central Mall and Central Square sites at Havelock Road. This project, developed under URA’s Strategic Development Incentive Scheme, will also include offices, retail space, and a co-living component with a hotel license. The other project is the 348-unit Norwood Grand, located in Champions Way in Woodlands, just a five-minute walk to the Woodlands South MRT Station.
Additionally, CDL, along with its joint venture partner Mitsui Fudosan, secured a Government Land Sale site 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 with about 700 residences and a retail podium in two towers of about 60 storeys. There will also be a 35-storey block with more than 300 apartments, piloted under URA’s Serviced Apartment II (SA2) category, which offers longer-term rental accommodation with a minimum lease period of three months.