Ho Bee Q2 earnings down 53% on absence of disposal gain

HO BEE Land's second- quarter net profit dived 53.5 per cent year-on-year to S$12.20 million. But behind the headline numbers, its transformation into a group with a substantial investment property portfolio providing recurring-income ballast is starting to show in its latest report card.

Rental from the group's industrial and commercial properties jumped to S$25.7 million in Q2 ended June 30, from S$2.8 million in Q2 2013 - mainly from rentals of office buildings ie, The Metropolis in Buona Vista, Singapore and Rose Court and 1 St Martin's Le Grand, both in London.

Ho Bee completed developing The Metropolis last year. It also bought Rose Court last year, followed by 1 St Martin's Le Grand this year. Ho Bee's Q2 results do not include rental income from about 70,000 sq ft at The Metropolis leased to GE as the MNC took over the space only in Q3 this year. Currently about 95 per cent of The Metropolis' 1.08 million sq ft net lettable area has been leased. When fully let, rental income from the asset is expected to stablise at about S$80 million gross a year; analysts estimate the net rental income at about S$50 milion.