
UOL cited expenses tied to the June opening of the Pan Pacific Orchard hotel (Image: UOL Group)
City Developments Ltd and UOL Group posted first-half profit declines as a lack of large investment gains hit the bottom line at the Singapore-listed builders.
At CDL, net profit after tax and non-controlling interest plunged to S$66.5 million ($49 million) in the first six months of 2023 from S$1.1 billion in the year-earlier period. The steep drop reflected the absence of divestments akin to the $930 million sale of the Millennium Hilton Seoul and its adjoining land site in the first half of 2022.
The property giant controlled by Singaporean tycoon Kwek Leng Beng also pointed to the effects of last year’s one-off gain on the deconsolidation of CDL Hospitality Trusts from the group, along with higher financing costs and impairment losses for its UK investment properties.
“Despite the persistent macroeconomic headwinds and inherent market unpredictability, the group will stay agile, resilient and adaptable in navigating these headwinds,” Kwek said Thursday in a release. “Building on the continued recovery of the hospitality sector, our recent acquisitions of the Sofitel Central Brisbane and Nine Tree Premier Hotel Myeongdong II in Seoul at attractive valuations strengthen the group’s presence in key gateway cities.”
EC Completion Boosts Revenue
CDL recorded an 84 percent year-on-year rise in revenue to S$2.7 billion for the first half of 2023, yielding a pre-tax profit of S$179.5 million. Excluding divestment gains and impairment losses, the group would have seen a 48 percent jump in pre-tax profit on a like-for-like basis.

CDL executive chairman Kwek Leng Beng (Getty Images)
Property development continued to be CDL’s biggest top-line contributor as revenue soared 183 percent in the segment. The surge was underpinned by the completion of the fully sold Piermont Grand executive condominium, as an accounting quirk allows for recognition of revenue and profit in their entirety from newly completed ECs.
In Singapore, CDL and its joint venture partners sold 508 residential units with a total sales value of S$1.1 billion, led by the strong launch of the 638-unit Tembusu Grand in April. To date, 367 homes have been sold at the Katong project being developed alongside Hongkong Land subsidiary MCL Land.
Revenue in the hotel operations segment rose 12.4 percent, including 51 percent growth in revenue per available room in Singapore and 88.3 percent RevPAR growth in Asia. The performance of Asia, Europe and US hotel properties exceeded pre-COVID levels, CDL said.
CEO Sherman Kwek credited last year’s divestments for providing “significant cash” to make strategic bets like the group’s $468 million acquisition of St Katharine Docks, a mixed-use complex in central London, from fund management titan Blackstone.
“These acquisitions are aligned with the group’s goals to advance our global presence in tandem with our land replenishment strategy in Singapore,” Kwek said. “In addition, we remain focused on extracting value from our current assets while pursuing our fund management ambitions.”
Shuffling Hotels
UOL Group reported a 64 percent year-on-year drop in first-half net attributable profit to S$135 million ($100 million), as fair-value gains on investment properties fell to S$3.5 million from S$190 million in the same period last year.
The builder controlled by the Wee family behind United Overseas Bank said revenue fell 11 percent to S$1.37 billion. Property development revenue slid 32 percent on lower contributions from Avenue South Residence and The Tre Ver in Singapore and Park Eleven in Shanghai, while hotel revenue leapt 66 percent as tourism continued to recover.

UOL Group chairman Wee Cho Yaw (Image: UOB Group)
Expenses also increased after the opening of two Kuala Lumpur hotels in 2022 and the Pan Pacific Orchard hotel in Singapore during June of this year.
“We have been proactively engaged in asset management and asset enhancement initiatives of our existing commercial portfolio while looking for acquisition opportunities,” UOL CEO Liam Wee Sin said in a release, citing the planned $389 million disposal of the Parkroyal on Kitchener Road as a case of unlocking value from the group’s portfolio.
Singapore’s red-hot housing market showed signs of slowing in the second quarter after the government hiked taxes in April in an effort to restrict property sales. The April-June period saw home sales fall 30 percent compared with the first three months of the year, marking the first decline in more than three years, according to the Urban Redevelopment Authority.
Leave a Reply