CapitaLand Q1 net profit jumps 77%, boosted by sale of The Nassim units

Residential units at the upmarket condominium, The Nassim.
Residential units at the upmarket condominium, The Nassim.PHOTO: CAPITALAND

SINGAPORE - CapitaLand announced on Wednesday (April 26) a 77.2 per cent surge in net profit to S$386.8 million for the first quarter compared to S$218.3 million for the year-ago period.

This was due to improved operating performance, including a gain of S$160.9 million from the sale of 45 units of The Nassim, and higher portfolio gains, said the developer. The portfolio gain in the first quarter stood at S$17.7 million, mainly from the divestment of a township project in China.

Group revenue for the quarter edged up 0.4 per cent to S$897.5 million on more handovers from its development projects in China and rental contribution from newly acquired properties. The development projects which contributed to the revenue in China this quarter included One iPark in Shenzhen, Riverfront in Hangzhou, Vista Garden in Guangzhou and Summit Era in Ningbo.

Mr Wee Cho Yaw, chairman emeritus of United Overseas Bank, bought all 45 unsold units at the upmarket The Nassim condominium for S$411.6 million in January. The deal saw Mr Wee reap a bulk sale discount of about 18 per cent while CapitaLand avoided having to pay Qualifying Certificate (QC) penalties that would have hit S$9.3 million if the 45 units had been left unsold by August.

Mr Lim Ming Yan, president & group CEO the group will complete and commence operations of six more shopping malls in China, India, Malaysia and Singapore, as well as the retail components of three Raffles City developments and Capital Square in China. Five of these 10 shopping malls and retail components will open in the second quarter of this year. It also expects to open about 2,600 serviced residence units in 2017.

CapitaLand has also obtained the Singapore Urban Redevelopment Authority's provisional permission for the proposed redevelopment of Golden Shoe Car Park into a Grade A office building, and is awaiting the Singapore Land Authority's assessment of the differential premium payable for the potential enhancement in land use.

Mr Lim added: "Singapore and China continue to be our core markets, while we scale up in markets such as Vietnam. We made our first foray into the Vietnam commercial property market in January 2017 with the acquisition of a prime site in the Central Business District of Ho Chi Minh City to develop our first international Grade A office tower in Vietnam. We will be on a look-out for opportunities to further diversify our business and potentially bring our Raffles City brand there."

CapitaLand has secured pre-leases for more than 90 per cent of the retail components of its Raffles City projects in Changning, Hangzhou and Shenzhen of China, slated to open in the second quarter. It said this will add to the steady leasing income generated from our four operating Raffles City projects. Raffles City Chongqing is also on track for completion in phases starting from 2018.

"As more of our properties become operational, our recurring income will grow,"said Mr Lim.