Aug. 1 (Bloomberg) -- CapitaLand Ltd., Southeast Asia's largest developer by revenue, said second-quarter profit tumbled 44 percent as home sales fell in markets such as China and Singapore, and one-time gains weren't repeated.

Net income for the three months ended June 30 dropped to S$515.2 million ($377 million), or 17.2 cents a share, down from S$912.6 million, or 31.5 cents a share, a year earlier, the company said in a statement to the Singapore stock exchange today. Sales fell 12 percent to S$820.1 million.

CapitaLand's earnings from Singapore and Australia fell as the U.S. subprime crisis triggered a slump in global demand for homes. Residential property prices in the city-state rose 0.4 percent in the second-quarter, the slowest in four years. Its Australian unit said this week first-half profit fell 79 percent.

``In the long-term, CapitaLand should gain from its multiple earnings stream, but its core property business could slow down a little,'' said Wilson Liew, an analyst at Kim Eng Securities in Singapore. The outlook for 2008 profit ``will depend on whether the company will sell any assets towards the end of the year.''

Chief Executive Officer Liew Mun Leong expanded overseas, including in China, to broaden the revenue base beyond Singapore.

CapitaLand fell 20 cents, or 3.5 percent to S$5.50 at 9:47 a.m. in Singapore trading, set for the biggest drop in two weeks. The stock has fallen 12 percent this year, compared with a 16 percent decline in the benchmark Straits Times Index.

Singapore, Australia

CapitaLand said second-quarter pretax earnings from Singapore fell 49 percent to S$371.4 million, while earnings from Australia and New Zealand slumped 82 percent to S$27.8 million.

The company's first-half profit dropped 50 percent to S$762.7 million on sales of S$1.45 billion. Foreign businesses accounted for 71 percent of sales in the first six months of 2008.

``Our focus on the Asia-Pacific, a region with the right economic fundamentals, will continue to benefit our business units,'' Liew said in the statement.

CapitaLand last month decided to set up a $1 billion private equity fund to invest in properties in China. The developer will hold 50 percent of the fund and the rest will be owned by financial institutions and pension funds in Asia, Europe and North America, the company said, without naming investors.

China's property market has seen a drop in selling prices and transaction volumes after the government implemented policies in 2007 to control bank loans and curb rising property prices.

CapitaLand's Australian unit, Australand Property Group, also posted declining profit. The stock fell by a record 32 percent yesterday, the biggest decline since it started trading in June 1997, after first-half net income dropped 79 percent and the company sold new shares to pay down debt.

CapitaLand joins Keppel Land Ltd., Singapore's third-largest developer by assets, and Malaysian billionaire Robert Kuok's Allgreen Properties Ltd. in reporting lower profits as demand for new homes slowed in the city-state.

To contact the reporter on this story: Andrea Tan in Singapore at atan17@bloomberg.net; Quah Chin Chin in Singapore at qchinchin@bloomberg.net.

Last Updated: July 31, 2008 21:55 EDT