CDL doubles Q1 profit to S$199.6m

CITY Developments Limited (CDL) more than doubled its net profit to S$199.6 million for its first quarter to March 31, from S$85.3 million for the year-ago period, boosted by strong profit margins for development projects and realisation of a S$144.3 million pre-tax gain from the divestment of Manulife Centre.

Earnings per share was 22 Singapore cents, versus 9.4 Singapore cents previously. CDL shares were down 0.23 per cent, or S$0.02, at S$8.66 as at 10.58am.

Revenue dropped 29.5 per cent to S$746.2 million for Q1 2019, from S$1.06 billion a year ago. For Q1 2018, the group included revenue from The Criterion Executive Condominium in its entirety, following its completion in February 2018.

Excluding the executive condominium's contribution, Q1 2019 revenue would have increased by 6 per cent.

The property and hotel conglomerate on Wednesday appointed its group chief executive officer Sherman Kwek to the board of directors; he will assume the role of executive director from May 15. Mr Kwek is also the executive chairman of CDL China Limited.

He is the elder son of executive chairman Kwek Leng Beng and a nephew of non-executive director Kwek Leng Peck.

CDL announced separately that it has entered into deals to invest 5.5 billion yuan (S$1.1 billion) in Chinese real estate developer Sincere Property Group. The amount, which comprises share subscription and a four-year interest-bearing loan, will be finalised upon completion. CDL added that the investment is its single largest in China to date.

The company expects to complete the investment by the fourth quarter of 2019, giving it a 24 per cent equity stake in Sincere, and making CDL the second-largest shareholder after Sincere's founder and chairman, Wu Xu.

Sincere has residential projects ranging from villas to low and high-rise condominiums, and more than 15 business parks under development or in operation. It also owns and operates Chinese investment properties including 14 retail malls, two serviced residences and five hotels.

In addition, CDL has entered into an agreement with Sincere to acquire a 70 per cent stake in Shanghai Hongqiao Sincere Centre (Phase 2), a prime commercial property in the heart of Shanghai's Hongqiao Central Business District (CBD), for 1.2 billion yuan, equivalent to about 49,000 yuan per square metre (sq m).

Spreading across 11 blocks, the Hongqiao property has a gross floor area of 35,739 sq m comprising offices, serviced apartments, a retail component and a basement car park with 384 lots. This investment is expected to be completed by the third quarter of 2019.

According to a Citi investment research report, China is now CDL's second-largest asset contributor (15 per cent), with the UK (14 per cent) dropping to third place. Singapore remains the largest contributor at 46 per cent.