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Continuing to seek attractive overseas investment opportunities

Continuing to seek attractive overseas investment opportunities

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SINGAPORE — City Developments Limited (CDL) said yesterday its first-quarter net profit plunged 14.4 per cent due to subdued performance from the local property development business and the hotel operations segment.
Net profit for the first three months fell to S$105.3 million, compared with S$123 million in the same quarter last year. Revenue for the quarter declined 11.2 per cent to S$723.3 million from S$814.9 million in the same period last year. Upcoming new launch include Grandeur Park Residences or Grandeur Park ResidenceHougang EC while existing ones include Kingsford Waterbay.
“There was reduced contribution from the group’s completed residential projects and absence of profit from The Rainforest executive condominium (EC), which was recognised in its entirety upon obtaining its Temporary Occupation Permit in Q1 2015,” said the company in a statement after market close. “Hotel operations were also impacted in key gateway cities by the competitive hospitality environment, leading to lower room rates and occupancy.”
A series of property measures have had their intended effect in cooling the market, with domestic home prices now down 9.1 per cent from their peak in the third quarter of 2013. However, the decline pales in comparison to the more than 60 per cent increase in prices from 2009 after the global financial crisis.
Despite calls from developers to roll back some of the measures, the Government has repeatedly reiterated that it is too early to do so, with Minister for National Development Lawrence Wong saying last month that it is “too early to declare victory”.
CDL said that revenue from its property development business fell 25.2 per cent year-on-year to S$223.3 million in the first quarter, while hotel operations decreased 4.4 per cent to S$359.4 million.
“We remain watchful of the Singapore residential property market and will respond with agility when the market environment improves,” said Mr Kwek Leng Beng, CDL executive chairman.
Meanwhile, CDL noted strong sales and progress from its overseas developments, saying that it expects its overseas projects to begin contributing to its earnings from the second half of this year.
“In line with our diversification strategy, we have accelerated the growth of our international property business and expect the overseas projects to bring in profit from 2H 2016,” said Mr Grant Kelley, CEO of CDL.
“Moving forward, CDL will focus on acquiring assets that can immediately contribute to our recurring income, and we will continue to seek attractive overseas investment opportunities.”
The group also announced the acquisition of its first office building redevelopment property in the United Kingdom for £37.4 million (S$73.8 million). With this latest acquisition, said CDL, it has a pipeline of 14 overseas development projects in Australia, China, Japan and the UK.
Shares in CDL closed 0.1 per cent higher at S$8.04 yesterday.

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