City Developments Profit Rises, Raises Concern of Oversupply
City Developments Ltd. (CIT), Singapore’s second-largest developer, said third-quarter profit rose 1.8 percent, boosted by contributions from its office buildings. It also said the city may face a possible oversupply of homes.
Net income climbed to S$134.5 million ($110 million) in the three months ended Sept. 30, from S$132.1 million a year earlier, it said in a statement to the Singapore stock exchange today. Sales increased 3.4 percent to S$832.9 million.
Singapore’s September home sales rose 84 percent to the highest in more than three years as developers sold more apartments, according to the Urban Redevelopment Authority.
“While the outlook for the property market in the medium to long-term is still positive, the group is cognizant that between 2014 and 2015, there could be some oversupply with more residential units being completed,” it said in the statement. “However, this fear will be unwarranted if the world economy turns around by that time.”
Pretax profit from its rental properties including office buildings more than doubled to S$71.2 million, it said in the statement. Property development fell 41 percent to S$76.5 million, while contributions from hotels dropped 20 percent to S$55.7 million.
The developer said it sold 48 of 55 units it put up for sale at UP@Robertson Quay close to the city’s downtown. The Palette, a joint venture project with 892 units in northeastern Singapore, is more than 94 percent sold, it said.
City Developments opened its 240-room W Singapore Sentosa Cove hotel on Oct. 20. The developer also won a joint bid by its unit and Intrepid Investments Pte to develop a residential and office plot in Tai Thong Crescent. The joint venture company paid S$245 million for the site, it said in a statement in September.
The company’s shares fell 1.7 percent to S$11.33 at the close of trading in Singapore. The stock has gained 27 percent this year, compared with the 13 percent advance in Singapore’s benchmark Straits Times Index. (FSSTI)
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