CapitaLand S’pore home sales grow 6-fold despite curbs

While property cooling measures and the total debt-servicing ratio (TDSR) framework have dented demand for private housing, CapitaLand’s sales in Singapore do not seem to have been affected.

CapitaLand, the largest-listed developer in South-east Asia, sold over six times more units in the traditionally quiet third quarter compared with a year ago, its earnings report showed yesterday. The company sold 468 homes worth S$560 million in Singapore in the July-September period, up from only 70 units worth S$166 million in the same period last year, due mainly to strong demand for its Sky Vue project in Bishan.

Sky Vue was the top-selling private residential project in September. A total of 433 out of 505 units launched were sold at a median price of S$1,401 psf.

The strong showing contrasts with islandwide developer sales in the third quarter, which fell 58.6 per cent on-year to 2,484 units, according to figures by the Urban Redevelopment Authority.

Analysts said that, although the buying appetite in Singapore had been affected by loan curbs launched at the end of June, reasonably priced projects in good locations continued to enjoy a healthy take-up.

“The strong performance at some recent launches shows that demand is still robust but discriminating,” said Senior Director of Savills Research, Alan Cheong.

For CapitaLand, residential sales in Singapore and China helped it clock a 52.5 per cent on-year increase in revenue to S$1.05 billion for the third quarter.

The company’s core markets of Singapore and China accounted for 65.1 per cent of its turnover in the quarter, said CapitaLand.

However, net profit for the quarter fell 8.7 per cent to S$135.5 million, due mainly to lower portfolio gains as CapitaLand divested its stake in three properties in the United Kingdom.

The firm said while prices and sales of Singapore residential properties are likely to moderate due to the cumulative impact of restrictions, long-term prospects for the industry remain positive given the Republic’s resilient economy and policies which support population growth.

“Going forward, the group will be focusing on integrated and mixed developments,” said President and Group Chief Executive Lim Ming Yan.

Analysts said while headwinds in the market have hit property transactions, CapitaLand is in a good position to go on to see healthy residential sales in Singapore.

“We continue to be positive (about) the management’s focus on realistic pricing and moving units in the pipeline,” said OCBC analyst Eli Lee.

DBS Vickers analyst Lock Mun Yee said CapitaLand has 1,239 unsold units from new and existing projects that will likely support profit in the fourth quarter.

The company’s shares closed down 1.3 per cent at S$3.12 yesterday.

Source : Today – 1 Nov 2013