SINGAPORE - The resurgent residential property market is dominated by sales from home upgraders while speculative investment and foreign buying remains suppressed, said Wing Tai Holdings chairman and managing director Cheng Wai Keung on Thursday (Aug 24).
The result has been a "strange phenomenon" where upgraders have pushed up prices so much in their traditional areas and new townships that those prices are now approaching values in the fringe area around Orchard Road.
Whereas prices in the fringe area or Rest of Central Region have not got the same lift because of the absence of foreign and speculative investment, Mr Cheng told the group's results briefing.
So the recovery here looks like a two-speed one, and Mr Cheng is "still very uncertain" about the market outlook.
"This is a very different and difficult period in my 40 years in the property market. It has stabilised but you are not sure if it will continue to be like that.
"But that does not mean that we do not look at property that will give us value."
Last month, Wing Tai and Keppel Land made the top offer of S$446.3 million (S$964.81 psf per plot ratio) for a plot at Serangoon North Avenue 1.
Wing Tai posted a net profit of S$9.5 million in the fourth quarter, a jump of 406 per cent from the same period a year ago.
Net profit surged 184 per cent in the 12 months to Jun 30 to S$20.1 million while revenue fell 52 per cent to S$263.2 million.
Wing Tai sold 72 residential units in Singapore in the year for a sales value of S$142 million. Including Malaysia and China, it sold 399 units for a sales value of S$357 million.
It has sold eight of the 43 units at its highly exclusive Le Nouvel Ardmore, and 43 per cent of the 469 units at joint-venture condominium project The Crest.
It has made an impairment provision for The Crest relating to additional buyer's stamp duty (ABSD) payable.
The retail segment accounted for 55 per cent of the topline and an Ebit (earnings before interest and taxes) of S$27.5 million.
Wing Tai has shut more than 30 per cent of it shops in the last two years, including 15 stores in the past 12 months.
Mr Cheng said: "E-commerce cannot explain why the retail market has performed so poorly."
Yet G2000 is performing well and "Uniqlo has not been affected at all", so consumers must be trading down, he said.
"For Wingtai, we have gone through two years of a bad patch and now it has stabilised. But the topline continues to be under pressure," said Mr Cheng.
Full-year earnings per share was 2.59 Singapore cents, up from 0.91 cents a year ago.
Net asset value per share was S$4.07 as at June 30, up from S$4.04 as at June 30 last year.
A first and final dividend of 3 Singapore cents per share and a special dividend of 3 cents per share were declared, the same as last year.
The counter rose one cent or 0.47 per cent to S$2.13 on Thursday before earnings were posted after market close.