CapitaLand pays S$2.7 million extension charge for The Interlace

SINGAPORE — CapitaLand yesterday said it has paid an extension charge for unsold units at The Interlace condominium while reporting a 35.4 per cent on-year increase in first quarter net profit to S$218.3 million.

The property developer said it has paid S$2.7 million in extension charges for the 127 unsold units, or S$21,000 (S$7 per square foot) on a per unit basis. Units in the 1,040-unit condominium along Depot Road had to be sold by March 13, 2016, and have now been given a six-month extension.

Developers face potential extension charges of close to S$100 million for unsold private residential units in 2016, said Real Estate Developers’ Association of Singapore (REDAS) president Augustine Tan in March.

CapitaLand said it has sold 89 per cent of its launched residential projects, adding that 55-unit The Nassim and the 109-unit Victoria Park Villas will be ready for launch during the first half of this year.

It also received strong interest for Cairnhill 9, with 193 out of 268 units sold as of April 14.

The developer sold 222 residential units worth S$506 million in Singapore during the first quarter, compared to 69 units worth S$197 million during the same period a year earlier. Nonetheless, it expects the impact of the property cooling measures to continue to weigh on the market.

It attributed the 35.4 per cent rise in net profit largely to a gain from the divestment of a China property — Somerset ZhongGuanCun Beijing. Revenue declined 2.3 per cent to S$894.2 million from S$915 million.

The group’s earnings before interest and tax rose 20.1 per cent to S$458.2 million from S$381.5 million.

Apart from the Somerset ZhongGuanCun Beijing gain, the higher earnings was also due to improved performance from the CapitaGreen office property, shopping malls and development projects in China, as well as lower divestment losses.

Looking ahead, president and CEO Lim Ming Yan said the group will seek attractive investment opportunities to grow its recurrent income and to maintain development gains from trading assets.

He added that CapitaLand will maintain its focus on the core markets of Singapore and China, growth markets of Vietnam and Indonesia, as well as the global platform of its serviced residences business.

CapitaLand shares fell 1.55 per cent to S$3.17 yesterday. The broader Straits Times Index closed down 0.06 per cent.