Keppel Land’s Q2 net profit up 20.3%

Property developer Keppel Land says its second quarter net profit rose 20.3 per cent on year to S$70 million.

This was largely driven by strong residential sales in Singapore and China, and growth in its fund management and property investment businesses.

But revenue for the quarter fell about 19 per cent to S$202 million.

The Reflections at Keppel Bay development was one of the projects that Keppel Land recorded strong sales this year.

Of the 80 units launched in the first half, only three remain unsold.

The developer has almost sold out the 760 units launched so far.

But it’s also eyeing the residential sales opportunities in China, where it transacted over 1,200 homes in the first half the year – mostly from its townships in second tier cities, namely the Botanica in Chengdu and Central Park City in Wuxi.

Kevin Wong, group CEO of Keppel Land, says: “In China, although market sentiments have been dampened due to the government’s measures to cool down the property market, we are still seeing resilience of demand for residential properties especially in middle-income homes in the second tier cities and suburban areas of first tier cities.”

In the first half, Keppel Land’s net profit rose 41.6 per cent to some S$135 million, as revenues fell about nine per cent to S$362 million.

This was boosted by a strong jump in profits from fund management.

The segment saw a 78 per cent increase to $15.7 million as a result of higher acquisition and management fees earned by K-REIT Asia Management and Alpha Investment Partners.

Going forward, an improved outlook for the office market is expected to boost earnings.

Keppel Land’s Ocean Financial Towers is set to be complete next year, and is already 63 per cent pre-committed.

Overall commitment for the Marina Bay Financial Centre is at 80 per cent, ahead of full completion in 2012.

Mr Wong says: “Grade A office rents bottomed in 1Q 2010 and rose about 5.6 per cent quarter-on-quarter in 2Q 2010. The Singapore office market tends to be closely related to GDP growth. With the record GDP growth forecast of 13 – 15 per cent predicted for 2010, we expect the office market to continue to improve.”

Keppel says it will continue to monitor the markets for appropriate launches and strategic acquisitions.

In Singapore, the group is planning to launch its newly-acquired Lakeside Drive project by the end of the year. The project will comprise about 630 homes with one to four bedrooms.

Mr Wong continues: “We have a pipeline of 4,000 homes which can be launched this year. The timing and extend of the launches will obviously depend on market conditions and the pace of the economic recovery.”

Source : Channel NewsAsia – 21 Jul 2010

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