Bukit Timah, Cairnhill Circle projects to cash in on market optimism
TWO new residential projects will soon be launched by property developer Keppel Land (KepLand) in an indication of the rebound in market sentiment.
The firm has yet to launch any residential projects this year, unlike other developers which have launched projects week after week in recent months to capitalise on the new-found optimism.
KepLand said yesterday it will be launching luxury projects Madison Residences in Bukit Timah and The Promont at Cairnhill Circle in the next two months.
This comes only four months after it made the decision to defer the construction of Madison Residences in March, citing weak market conditions.
The Promont is due for completion this year, said the firm.
Group chief executive Kevin Wong said yesterday at its financial results briefing that as markets in the region improve, 'we will accelerate our project launches in Singapore, China and Vietnam to achieve faster returns'.
The firm posted a 10.4 per cent increase in net profit to $58.2 million for the three months ended June 30, compared to the same quarter last year.
Revenue came in at $250 million for the second quarter, up 34.4 per cent from a year ago due to progressive sales from launched projects in Singapore such as Park Infinia at Wee Nam and The Tresor at Duchess Road.
Keppel Land's growing footprint overseas also helped to boost turnover, as sales from projects in China and Indonesia were registered.
Overseas earnings accounted for 30 per cent of net profit, compared to 18 per cent for the same quarter last year, said KepLand.
The firm is determined to expand its presence in China, recently announcing its proposal to delist Evergro, a China-focused property group, to merge both entities.
It had offered 29 cents per share - a 16 per cent premium over Evergro's last traded share price of 25 cents on the Friday before the announcement.
Shareholders can also opt for one new Keppel Land share for every seven Evergro shares they own. This plan will allow KepLand to 'tap on combined operational expertise, industry knowledge and extensive networks' for expansion in China, said Mr Wong.
KepLand had raised some $708 million in a fully subscribed, nine-for-10 rights issue at $1.09 a share in June.
This has improved the firm's borrowing position, and it is now looking for land to buy, said its finance chief Lim Kei Hin.
For the first half of this year, net profit was down 15.8 per cent at $95.1 million from the same period last year because of poorer first-quarter sales arising from lower revenue recognition for projects in Singapore and overseas.
Overall, turnover was down 13.8 per cent at $395.6 million compared to the first half of last year.
Earnings per share for the half-year ended June 30 was 8.2 cents, down from 11.1 cents previously.
Net asset value per share stood at $2.29 as at June 30, compared to $3.39 as of Dec 31, 2008.
Keppel Land shares closed five cents up at $2.54 yesterday.
Source: Straits Times, 23 July 2009