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Ho Bee Land posts 12% drop in Q1 net profit, to begin marketing balance units in Sentosa soon

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Seascape condo in Sentosa Cove

HO Bee Land, which posted a 12.3 per cent drop in first-quarter net profit, said it will market for sale its unsold residential apartments in Sentosa Cove this year to take advantage of the upturn in the Singapore residential sector. The group has unsold units in three completed condo projects in the waterfront housing district developed on leasehold sites through separate joint ventures.

For a start, the group will focus on marketing the 48 unsold units in the 91-unit Turquoise condo and the 103 unsold units in the 151-unit Seascape.

The group is currently in discussions with agents to map out the marketing strategy for these two projects. Sales could begin as early as the second quarter of this year. Prices have yet to be determined.

Around 80 per cent of the unsold units in these two condo developments have been leased out, so potential buyers will have a choice of acquiring either units that are already generating rental income or vacant units.

Ho Bee also has a 35 per cent stake in the 302-unit Cape Royale, where it and its partner IOI Properties made a strategic decision several years ago not to launch the project in view of the weak residential market at the time. Almost 80 per cent of the units in Cape Royale are leased out.

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The group's net profit eased 12.3 per cent to S$49.37 million in the first quarter ended March 31 from the year-ago period, due mainly to the gain of S$7.4 million on the sale of an investment property, Rose Court, in London in Q1 FY2017.

Share of profits from associates slipped 12.7 per cent to S$28.51 million in Q1 FY2018. The contribution in the latest quarter came largely from Yanlord Xijiao Garden, a joint-venture residential project in Shanghai's Hongqiao Commercial District. The project, comprising 1,470 units, was completed in 2017 and to date about 85 per cent of the units have been sold. Handover of units to buyers is continuing. Ho Bee developed the project jointly with Yanlord.

Group revenue rose 14.8 per cent to S$48.66 million. The increase was contributed by higher rental income and sale of a small site in Gold Coast, Australia.

Earnings per share eased to 7.42 Singapore cents in Q1 FY2018 from 8.46 Singapore cents in Q1 FY2017. Net asset value per share increased to S$4.79 as at March 31 from a restated figure of S$4.70 as at Dec 31, 2017.

The counter closed one Singapore cent higher at S$2.54 on Thursday. Ho Bee released its results after the market closed.

During the first quarter, the group committed an investment of 40 million euros (S$64.5 million) into a property fund that focuses on key cities in Europe. At the same time, the group made a further investment commitment of 50 million euros in a Munich commercial development. The property is centrally located, adjacent to the main train station. This will be redeveloped into a Grade A office building of more than 500,000 square feet.

Ho Bee's chairman and chief executive Chua Thian Poh said: "The group has made a strategic decision to invest in Continental Europe. Our initial commitment of 90 million euros will ride on the improving property market in that region. With this investment, we have further diversified our property portfolio to position the group for future growth."

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