CDL boasts record results following Sentosa Cove deal

SINGAPORE — City Developments (CDL), Singapore’s second-largest listed developer, yesterday reported its best quarterly net profit and highest full-year revenue since the company’s inception in 1963, with the stellar performance boosted by a unique financing deal over its Sentosa Cove assets.

For the fourth quarter ended Dec 31, net profit surged 73.4 per cent from the corresponding period a year earlier to S$384.9 million. This was largely driven by the completion of the sale of present and future cash flows generated from its wholly-owned subsidiary, Cityview Place Holdings — which owns the Quayside Collection of properties in Sentosa Cove — to a special purpose vehicle it formed with United States investment giant Blackstone and Malaysian lender CIMB. Revenue for the quarter jumped 7.4 per cent to S$846.9 million.

Revenue for the full year rose 17.1 per cent to S$3.8 billion, despite challenging property market conditions, lifting net profit 12.2 per cent to S$769.6 million.

CDL maintained its top position as Singapore’s top-selling private-sector developer last year, as it sold, together with its joint venture associates, a total of 1,378 homes, including Executive Condominiums (ECs), at about S$1.4 billion, in a weak market where activity had been slowed by property cooling measures and loan curbs.

Boasting a strong balance sheet, CDL said cash and cash equivalents surged 43 per cent from a year earlier to S$3.9 billion as of Dec 31, which will be used to drive new opportunities for growth and diversification.

The so-called profit participating security venture with Blackstone and CIMB, together with financing from DBS and Oversea-Chinese Banking Corp, raised S$1.5 billion in all, which CDL can deploy for expansion. Last year, the developer acquired about S$1.3 billion worth of assets in the US, the United Kingdom, Italy, Japan and China, to increase its overseas footprint.

In the home market of Singapore, CDL said private-residential prices would continue to decline. “Given the government property cooling measures, tighter credit environment, incoming supply of completed residential units and the possibility of continued rising interest rates, demand in the residential market is likely to remain subdued and residential prices are likely to continue to moderate further,” it said.

CDL plans to launch two projects in the coming months, namely the 638-unit EC on Canberra Drive located next to the upcoming Canberra MRT Station and the 174-unit freehold Gramercy Park on Grange Road in the prime district 10.

Amid uncertainties arising from the headwinds in the Singapore market — where developer sales fell to their lowest in six years and private-home prices fell 4 per cent last year — and the fragile global economy, CDL said there would always be pockets of opportunity. Executive chairman Kwek Leng Beng said: “We will remain poised to capitalise on this down cycle by building on our capabilities, expanding geographically, diversifying our products and creating opportunities both locally and abroad.”

CDL shares fell 0.4 per cent to S$10.26 each yesterday, underperforming the flat close in the benchmark Straits Times Index.