First Sponsor cautiously optimistic about market turnaround for its business in China
Pre-sales for its China development projects remain subdued in Q3 amid continuing weak property market sentiment
FIRST Sponsor Group is cautiously optimistic about a market turnaround in its China property business, it said on Monday (Oct 28).
In an interim update for its third quarter ended Sep 30, the developer noted that the China property market sentiment continued to be weak in Q3. As a result, pre-sales for its development projects remained subdued.
“Most of these development projects are at an advanced stage of construction, with some projects having commenced handover, or are expected to commence handover within the next 15 months,” it said.
Listed on the Singapore Exchange since 2014, the developer has a presence in the Netherlands and China.
It owns commercial properties including hotels and provides property financing services in those two countries as well as Germany.
Through its majority-owned entity, the group acquired the commercial component of a mixed-use development project in Sydney, Australia, for a consideration of A$24.7 million (S$21.6 million) in September.
A NEWSLETTER FOR YOU
Tuesday, 12 pm
Property Insights
Get an exclusive analysis of real estate and property news in Singapore and beyond.
This translates to less than A$4,000 per square metre (sq m) for the 6,400 sq m of commercial space.
The entity previously owned the hotel component of the development. Part of the newly acquired space will be “utilised to enhance the capacity and facilities of the hotel component”, said First Sponsor.
Regarding its European portfolio, the group said that it maintained its strong performance in Q3, with total operating income of 14.8 million euros (S$21.2 million). This is a 6 per cent increase from the 13.9 million euros over the same period last year.
The increase was largely driven by the newly acquired Allianz Tower Rotterdam in September 2023, as well as stronger contributions from its hotel properties Le Meridien Frankfurt and Bilderberg Europa Hotel Scheveningen, which was closed for renovation for most of last year.
For the first nine months of 2024, First Sponsor achieved total operating income of 40 million euros, up 15.2 per cent from the 34.7 million euros recorded in the corresponding period a year ago.
Looking ahead, the group expects the completion of its property holding projects to “further enhance its recurring income”. These include the redevelopment of the Puccini Milan and Prins Hendrikkade Amsterdam hotels in FY2025, and the office and residential components of the Dreeftoren Amsterdam development in FY2025 and FY2026, respectively.
The Sydney project on Pitt Street is expected to be complete in FY2027, while the Meerparc Amsterdam redevelopment project will reach completion in FY2028.
Shares of First Sponsor closed at S$1.07 on Monday, down 0.9 per cent or S$0.01, before the announcement.
Copyright SPH Media. All rights reserved.
