CapitaLand Profit Rises on Climbing Rents From Malls, Homes

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CapitaLand Ltd., Southeast Asia’s biggest developer, said profit rose 5.8 percent in the second quarter on higher rental revenue from its shopping mall and serviced residence business.

Net income climbed to S$464 million ($335 million) in the three months ended June 30, from S$439 million a year earlier, the Singapore-based developer said in a statement on Wednesday. Revenue rose 18 percent to S$1.03 billion, helped by development projects in Singapore and China.

CapitaLand simplified its structure by consolidating operations into four fully-owned business units from eight earlier. The developer is focusing on integrated projects, which include homes, offices, malls and serviced residences. It’s also building its fund-management platform to help improve its return on equity with additional fee income.

“While CapitaLand remains focused on Singapore and China as core markets, it is exploring opportunities to expand in growth markets such as Vietnam, Indonesia and Malaysia,” Lim Ming Yan, the company’s president and chief executive officer, said in the statement. “CapitaLand has built a significant scale across diversified asset classes.”

The increase in CapitaLand’s profit was helped by gains from a change in use of properties. The advance was offset by a write down in the value of a development in Tianjin in China.

CapitaLand shares fell 0.6 percent at 11:12 a.m. in Singapore, bringing the year-to-date decline to 4.5 percent.

China, Singapore

Home sales in China more than doubled to 2,764 units in the quarter, while those in Singapore fell to 37 units during the period, the developer said. Singapore and China accounted for 79.2 percent of the group’s revenue in the first half of the year, up from 71.6 percent in the first half of 2014.

Singapore’s home prices dropped for a seventh consecutive quarter, the longest losing streak in 13 years, as tighter mortgage curbs cooled demand in Asia’s second-most expensive housing market. An index tracking private residential prices fell 0.9 percent in the second quarter, according to data from the Urban Redevelopment Authority.

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