Low Inventory Slowed CDL’s Q3 Home Sales in Singapore

City Developments Ltd maintained what it dubbed a “resilient performance” across business segments in the third quarter of 2022, as the Singaporean property giant’s sales slowed in the absence of new project launches.

CDL and its joint venture associates sold 95 units with a total sales value of S$281 million (now $206.9 million) in the July-September period, the developer said Wednesday in an operational update. For the first nine months of the year, the group and its JVs sold 802 units with a total sales value of S$1.9 billion, down from 1,382 units and S$2.5 billion in the year-earlier period.

CDL’s sales drew from a low inventory of unsold units because launched projects have been substantially sold, the company said, with the mid-market Sengkang Grand Residences project selling out in the third quarter.

The developer controlled by the Kwek family noted signs of a turnaround in the fourth quarter’s early going, which saw year-to-date sales surge to 1,417 units with a total sales value of $2.8 billion as of 30 November, mainly led by the October launch of the Copen Grand executive condo project.

Sellout Bodes Well

All of the remaining 146 units at the 639-unit Copen Grand in Tengah Town were snapped up during a late November sales event, according to CDL, which is developing the project with joint venture partner MCL Land, a unit of Hongkong Land.

Under regulations governing ECs, a type of public-private housing hybrid, only 30 percent of a project can be allocated to second-time buyers at launch. For Copen Grand, this quota was reached during the initial launch period in October. E-applications for second-time buyers took place from 17 to 23 November, and sales bookings commenced on 26 November.

The sellout bodes well for CDL’s pipeline EC project in the same area, the 510-unit Bukit Batok West Avenue 5. In September, CDL placed the highest bid of S$336 million (S$626 per square foot of gross floor area) for the 99-year leasehold site.

Overseas, the group recently completed The Marker in Melbourne, where 84 percent of the 198 units have been sold to date. Residents have been progressively moving into the apartments since October, CDL said.

The purchase of the group’s first Private Rented Sector development site in Melbourne was completed in November, with construction of a 240-unit project to commence in the second quarter of 2023.

Office Portfolio Outperforms

As of 30 September, CDL’s Singapore office portfolio reported committed occupancy of 94.3 percent, outstripping the island-wide occupancy of 88.3 percent indicated by Urban Redevelopment Authority statistics.

Republic Plaza, the group’s flagship Grade A office building, was 96.1 percent committed with a positive rental reversion of 5.9 percent, as limited supply in the central business district continued to underpin the market.

After the sale of the Millennium Hilton Seoul hotel propelled CDL to a record-high net profit of S$1.1 billion in the first half of the year, the company voiced confidence in weathering the storms of global economic uncertainty, unabated inflation and rising interest rates.

“The group’s timely divestments earlier in the year, with the sale of Millennium Hilton Seoul as well as the successful collective sale exercises for Tanglin Shopping Centre and Golden Mile Complex, will provide the group with adequate financial headroom to deleverage, seek opportunistic investments and maximise shareholder value,” the developer said.