CDL H1 Profit Surges 32% on Divestment Gains, Hotel Performance

Singapore’s City Developments Ltd reported a first-half attributable profit of S$87.8 million ($66.8 million), up 32 percent year-on-year, with divestment gains and hotel income weighing heavily as development revenue dipped.

CDL’s overall revenue for the six months tumbled 42 percent year-on-year to $1.6 billion, the SGX-listed property giant said Wednesday in a release. Revenue in the prior-year period had been boosted by a S$1 billion contribution from the Piermont Grand executive condominium, as an accounting quirk allows for recognition of revenue and profit in their entirety from newly completed ECs.

The group controlled by tycoon Kwek Leng Beng said pre-tax profit in the half fell 13 percent from a year earlier to S$155.4 million on higher financing costs and lower profits from the development segment.

“Today’s unpredictable business landscape has brought challenges and opportunities,” Kwek said. “We maintain a cautious yet optimistic outlook and leverage opportunities to enrich our group’s portfolio with valuable, long-term assets.”

New Assets Shine

Revenue in the investment properties segment rose 21.3 percent in the first half, driven by assets acquired in 2023 such as St Katharine Docks. CDL purchased the mixed-use complex in central London from Blackstone for £395 million (then $468.2 million) in a deal that closed in March of last year.

Investment income was further supported by divestment gains on the sale of strata units at Citilink Warehouse Complex, Cititech Industrial Building and Fortune Centre.

First-half hotel revenue jumped 10.8 percent, bolstered by the acquisitions of the Sofitel Brisbane Central last December from Brookfield for A$177.7 million (then $119 million) and the Hilton Paris Opera in May of this year from Blackstone for €240 million (then $260.9 million).

The freehold Hilton Paris Opera has seen strong demand with high occupancy and room rates, especially during the just-ended Summer Olympics, according to CDL.

“Building on the continued positive recovery momentum of the hospitality sector, the group’s recent acquisition of the Hilton Paris Opera hotel in France allows us to strengthen our hospitality portfolio with a trophy asset, expanding our presence in a key gateway city in Europe during the Paris 2024 Olympics, while bolstering our recurring income with value-add potential,” Kwek said.

Singapore Project Launches

In the Singapore residential market, CDL and its associates sold 588 units with a total sales value of S$1.2 billion during the first half, up from 508 homes for S$1.1 billion a year earlier.

Sales got a boost from the launch of Lumina Grand, a 512-unit executive condominium at Bukit Batok West Avenue 5. To date the project has sold 399 units, including 269 during the January launch weekend, CDL said.

In July, CDL launched the 276-unit Kassia in Upper Changi Road North under a joint venture with sister firm Hong Leong Holdings and Japan’s Mitsui Fudosan. To date the project is 56 percent sold, according to the developer.

Also in the second half, CDL plans to launch the 366-unit Union Square Residences at the former Central Mall and Central Square sites at Havelock Road and the 348-unit Norwood Grand at Champions Way in Woodlands.