CapitaLand’s Q1 profit up nearly five-fold

CapitaLand, Southeast Asia’s biggest developer, said first-quarter net profit surged nearly five-fold, helped by divestment gains as well as higher luxury home sales and office rental returns in Singapore.

Singapore-based CapitaLand said it would continue its overseas expansion in countries such as China, India and Vietnam, and expects continued strength in its domestic market.

The firm, which is partly owned by state investment firm Temasek Holdings, earned net profit of $608 million (US$401 million) in the January-March quarter, up from a restated $129.6 million a year ago.

Divestment gains included $472.9 million from the sale of an office building and $33.8 million from the sale of units in its Ascott Residence Trust.

Revenue in the first quarter slipped 3.3 per cent from a year ago to $637 million on weaker sales from development projects.

The firm, which earns up to 80 per cent of its profits abroad, said its operations in Australia and China also contributed to its record first-quarter performance.

‘The group has also raised its target for assets under management to $18 billion, covering China, Japan, Malaysia and oil-rich countries like Bahrain, where the group recently launched its first equity Sukuk fund,’ CapitaLand chief executive officer Liew Mun Leong said in a statement.

The Sukuk fund is the firm’s second Sharia-compliant product, he added.

CapitaLand — along with rivals such as Keppel Land and City Developments (CityDev) — has benefitted from rising demand for high-end luxury homes in Singapore.

Prices for such properties in Singapore’s prime districts surged 25 per cent in 2006, the strongest recovery in years.

Last month, CapitaLand and its Hong Kong partner Sun Hung Kai Properties set a new pricing benchmark for Singapore residential property when they sold some units in their downtown development for more than $4,000 per square foot.

Shares of CapitaLand, which closed on Friday unchanged at $8.60, have risen 29 per cent in the last three months, outpacing Keppel Land’s 26 per cent price gain and CityDev’s 18 per cent rise.

Source: The Business Times, 27 April 2007