SINGAPORE - Wheelock Properties (Singapore) is facing headwinds on two fronts.
In China, the upmarket developer has set aside an allowance for diminution in value of $75 million on the Fuyang project.
In Singapore, the fair value of its investment in Scotts Square Retail was cut by $52 million to $260 million.
These investments accounted for the lion's share of other operating expenses in the fourth quarter, amounting to $132.9 million. This is 15.4 per cent higher compared to the same period last year.
Consequently, Wheelock's net profit for the three months to Dec 31 widened to $103.1 million from $$91.3 million previously.
Revenue, meanwhile, fell by 7.2 per cent to $26.9 million.
Loss per share worsened to 8.62 cents from 7.63 cents previously while net asset value per share climbed by 11 cents to $2.62.
Nonetheless, Wheelock was able to record a full year net profit of $43.1 million, up 7.7 per cent. Revenue fell 15.4 per cent to $99 million.
Reviewing its operations, Wheelock said it experienced a most challenging operating environment in light of the property cooling measures and credit tightening policies in Singapore in the past two years.
These pressures on the group's core profit are expected to continue in the current year.
It noted that Scotts Square is operating under very challenging circumstances as a boutique mall.
"A substantial tenant and trade mix revamp is underway for the mall and downward revision of rental revenue is expected for the initial years," it said.
As at Dec 31, the overall occupancy rate was about 88 per cent and the average monthly rent achieved was about $16 per square foot (psf).
The re-tenanting exercise to rejuvenate the mall with leading international fashion powerhouses and interesting food & beverage concepts is on-going.
Meanwhile, Wheelock is extending existing leases on a short term basis and seeking interesting pop up store concepts to maintain trading activities in the mall, while new leases are being finalised.
Extensive advertising and promotion programmes have been planned for 2015.
Giving an update on its development projects in Singapore, Wheelock disclosed that 79 per cent or 268 out of 338 units at Scotts Square had been sold at an average price of $4,004 psf.
"With the weakening sales in the luxury sector, the group's current focus is on leasing. For the same period, 36 units were leased out with average rental of $5,250 per month."
At Ardmore Three, which received its temporary occupation permit in December, three units were sold in a private preview at an average price of $3,158 psf.
As for the 698-unit leasehold development, The Panorama, a total of 317 units have been sold at an average price of $1,267psf.
An unchanged final dividend of six cents a share was proposed.