Private home prices in Singapore are unlikely to stage a rapid rebound after the Government imposed further property curbs in mid-2018, the finance chief of the country's largest developer said.
"If we see a 5 per cent increase in home prices, I think that will be a pretty good year for the Singapore residential market," CapitaLand chief financial officer Andrew Lim said in an interview with Bloomberg Television yesterday.
"The severity and extent of the measures in July caught us by surprise," he added.
Private home prices posted their first decline in six quarters in the last three months of last year.
In July, the Government imposed higher stamp duties and tougher loan-to-value rules to choke off a sudden bout of exuberance.
The earlier resurgence had been marked by aggressive land bids from developers and an explosion in collective sales, where apartment owners band together to sell entire buildings.
"We agree with the main view on the street, which is that we don't expect a big bump up any time soon," Mr Lim said.
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AT A GLANCE
REVENUE: $5.6 billion (+21.3%)
NET PROFIT: $1.76 billion (+12.3 %)
DIVIDEND PER SHARE: 12 cents
CapitaLand's profit rose 71.2 per cent to $475.7 million in the quarter ended Dec 31, up from $277.8 million last year, it said yesterday.
The higher earnings were also underpinned by greater contributions from residential projects in China, as well as newly acquired and operational properties, CapitaLand said.
The developer agreed last month to acquire Temasek units Ascendas and Singbridge, bolstering its assets to more than $116 billion across 180 cities in 32 countries. The deal adds logistics centres and business parks to its portfolio of residential, retail and commercial property.
President and group chief executive Lee Chee Koon said: "The transaction will strengthen our presence and pipeline in our core markets - Singapore and China. It will give us immediate scale in new economy sectors such as logistics and business parks, and in growth markets such as India, the US and Europe."
On a per share basis, earnings came in at 11.4 cents for the quarter, up from 6.5 cents a year earlier.
Revenue climbed 34 per cent to $1.62 billion, up from $1.21 billion for the year-ago period. This was mainly due to higher handover of units from residential projects in China and Vietnam, as well as rental revenue from newly acquired or operational properties in Singapore, China, Germany and the United States.
Residential projects that contributed to the revenue this quarter were Vermont Hills in Beijing, New Horizon in Shanghai, and Century Park East in Chengdu, as well as Sky Habitat and The Interlace here.
The two core markets of Singapore and China accounted for 75.9 per cent of the group's revenue, up from 74.5 per cent for the year-ago quarter.
The board is proposing a dividend of 12 cents a share for financial year 2018, unchanged from the previous financial year.
Full-year net profit was up 12.3 per cent to $1.76 billion, as revenue rose 21.3 per cent to $5.6 billion.
This translated to earnings per share of 42.1 cents for the 12 months ended Dec 31, up from 37 cents in the preceding year.
The group said having a "diversified asset base with strong operating expertise" has allowed it to navigate macroeconomic uncertainties that affected market and business sentiments in FY2018.
Shares of CapitaLand closed yesterday at $3.43 apiece, up four cents, or 1.18 per cent.
BLOOMBERG, THE BUSINESS TIMES
