HONGKONG Land Holdings (HKLand) has announced a net profit of US$1.64 billion for the year ended Dec 31, 2009, a turnaround from 2008’s US$109 million loss.

The profit attributable to shareholders comprises underlying profit of US$777.1 million (up 107 per cent from FY2008’s US$375.1 million) and profit from non-trading items of US$864 million (FY2008: loss of US$484.5 million). The latter stemmed mainly from an increase in fair value of investment properties of US$1 billion (FY2008: decrease of US$698.9 million).

Revenue for the period was up 29.4 per cent at US$1.32 billion.

A final dividend of 10 US cents per share for 2009 has been recommended. Total dividend for the year amounts to 16 US cents per share, an increase of 23 per cent from 2008.

HKLand said that net rental income grew 19 per cent over the previous year.

For Singapore, it said that its wholly owned One Raffles Link and joint venture development One Raffles Quay are both fully let.

It also said that construction of Marina Bay Financial Centre (MBFC) is due to complete in two phases, in 2010 and 2012.

The two phases, comprising 190,000 sq m and 150,000 sq m of gross floor area, respectively, are more than 68 per cent pre-committed. It added that the two towers in Phase 1 completing in 2010 are over 81 per cent let.

An independent valuation of the group’s commercial investment properties at the end of 2009, including its share of completed investment properties in associates and joint ventures, was US$15.5 billion, an increase of 6 per cent.

The adjusted net asset value per share increased by 12 per cent to US$6.64 over the year.

Contribution from residential development projects was US$386 million in FY09, compared with a breakeven result in FY08.

In Singapore, construction of Marina Bay Residences, the residential component of Phase 1 of the MBFC, will be completed and handed over to buyers in 2010. HKLand added that the first batch of units of the second MBFC residential tower were released for sale in the last quarter of 2009, and over 95 per cent had been sold by year-end.

MCL Land, HKLand’s 77 per cent-owned listed affiliate, will complete Waterfall Gardens and D’Pavilion in 2010. They were 100 per cent and 44 per cent sold, respectively, at the end of 2009. MCL Land’s The Peak@Balmeg is scheduled for completion in 2011 and was 90 per cent sold, while Parvis is targeting a 2012 completion and was launched for sale in November with 56 per cent sold at the end of 2009.

HKLand said that earnings in 2010 should continue to benefit from high occupancy levels and steady rentals together with the recognition of profits on the completion of residential developments. But it added that some uncertainty remains over the strength and durability of the economic recovery.

Earnings per share for FY09 were 72.96 US cents, against 2008’s loss of 4.79 US cents.

Source: Business Times, 5 Mar 2010

AN EXECUTIVE condominium (EC) site in Sengkang has drawn a whopping 11 bids, with the winning offer trumping analysts’ expectations by a fair margin.

The 19,000 sq m site, which can be developed into 520 apartments and is near Buangkok MRT station, was topped by joint bidders Frasers Centrepoint’s Opal Star and Lum Chang Building Contractors. Their valuation of the asset came to $193.28 million, or $315 per sq ft (psf) of gross floor area.

They nudged MCC Land (Singapore) and its bid of $190.7 million, or nearly $311 psf of gross floor area, into second place. The third bid of $181.19 million, or $295.3 psf of gross floor area, came from Hoi Hup Realty, Sunway Developments and Hoi Hup J.V. Development.

Analysts had expected lower bids of between $190 and $300 psf of gross floor area, which would translate into a final selling price of $550 to $600 psf.

By the close of the tender yesterday, developers large and small had put in pitches, from Far East Organization to Sim Lian Land and Chinese firm Qingjian Realty.

City Developments’ unit submitted the second-to-last bid of $140.38 million, or $228.8 psf of gross floor area, while Boon Keng Development was last in with an offer of $121.8 million, or $198.5 psf of gross floor area.

CBRE Research said the large number of bids showed that developers continued to have an upbeat outlook for the suburban residential market, and signalled that they were keen to build up their land banks for suburban development.

‘Six of the 11 bidders expect the new development…to be launched above $600 psf, which would be a reasonable average selling price for a new EC project at this location in today’s market,’ said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

‘This indicates that about half of the developers in today’s tender expect the price of entry-level homes to increase in the next year or so.’

The winner of the site will have to set aside 95 per cent of the units during the first month of sale for first-time home buyers, as stipulated by the Housing Board.

Frasers Centrepoint is looking to build 500-plus units on the plot, said a spokesman.

‘This site is well located, and in view of the tight supply and great demand, we are confident that it will be an attractive development especially to home buyers who have been recently priced out of the market,’ he said.
The units are not expected to be cheap, given that the top bid is the highest received for an EC site since land was made available for sale from this source in 1997, property experts said.

The previous record, set in May 1997, was at $220 psf of gross floor area, according to CBRE Research.
Based on the top bid’s value, analysts estimate the break-even level to be about $600 to $640 psf, which indicates that final selling prices could range from $650 to $700 psf.

PropNex chief executive Mohamed Ismail said that such a price ‘will seem reasonable’ come the second half of the year, when developers who bought land recently at some $500 psf or more ‘will be marketing their private mass market condos at more than $900 psf’.

At nearby The Rivervale EC, Florida EC and Park Green EC, units were sold at $520 to $600 psf between last October and last month, said CBRE Research.

The Government last put up an EC site for sale in Punggol in September 2008 but failed to attract any bids. The last EC launched was La Casa in Woodlands in May 2005 – for around $550 psf – which was completed in early 2008.

HDB announced yesterday that it will put up for tender a land parcel along Yishun Avenue 11 within the next two months. The site is earmarked for housing development under the Design, Build and Sell Scheme (DBSS) and will have a potential yield of 700 flats, it said.

Source, Straits Times 5 March 2010

AN EXECUTIVE condominium (EC) site in Sengkang has drawn a whopping 11 bids, with the winning offer trumping analysts’ expectations by a fair margin.

The 19,000 sq m site, which can be developed into 520 apartments and is near Buangkok MRT station, was topped by joint bidders Frasers Centrepoint’s Opal Star and Lum Chang Building Contractors. Their valuation of the asset came to $193.28 million, or $315 per sq ft (psf) of gross floor area.

They nudged MCC Land (Singapore) and its bid of $190.7 million, or nearly $311 psf of gross floor area, into second place. The third bid of $181.19 million, or $295.3 psf of gross floor area, came from Hoi Hup Realty, Sunway Developments and Hoi Hup J.V. Development.

Analysts had expected lower bids of between $190 and $300 psf of gross floor area, which would translate into a final selling price of $550 to $600 psf.

By the close of the tender yesterday, developers large and small had put in pitches, from Far East Organization to Sim Lian Land and Chinese firm Qingjian Realty.

City Developments’ unit submitted the second-to-last bid of $140.38 million, or $228.8 psf of gross floor area, while Boon Keng Development was last in with an offer of $121.8 million, or $198.5 psf of gross floor area.

CBRE Research said the large number of bids showed that developers continued to have an upbeat outlook for the suburban residential market, and signalled that they were keen to build up their land banks for suburban development.

‘Six of the 11 bidders expect the new development…to be launched above $600 psf, which would be a reasonable average selling price for a new EC project at this location in today’s market,’ said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.

‘This indicates that about half of the developers in today’s tender expect the price of entry-level homes to increase in the next year or so.’

The winner of the site will have to set aside 95 per cent of the units during the first month of sale for first-time home buyers, as stipulated by the Housing Board.

Frasers Centrepoint is looking to build 500-plus units on the plot, said a spokesman.

‘This site is well located, and in view of the tight supply and great demand, we are confident that it will be an attractive development especially to home buyers who have been recently priced out of the market,’ he said.
The units are not expected to be cheap, given that the top bid is the highest received for an EC site since land was made available for sale from this source in 1997, property experts said.

The previous record, set in May 1997, was at $220 psf of gross floor area, according to CBRE Research.
Based on the top bid’s value, analysts estimate the break-even level to be about $600 to $640 psf, which indicates that final selling prices could range from $650 to $700 psf.

PropNex chief executive Mohamed Ismail said that such a price ‘will seem reasonable’ come the second half of the year, when developers who bought land recently at some $500 psf or more ‘will be marketing their private mass market condos at more than $900 psf’.

At nearby The Rivervale EC, Florida EC and Park Green EC, units were sold at $520 to $600 psf between last October and last month, said CBRE Research.

The Government last put up an EC site for sale in Punggol in September 2008 but failed to attract any bids. The last EC launched was La Casa in Woodlands in May 2005 – for around $550 psf – which was completed in early 2008.

HDB announced yesterday that it will put up for tender a land parcel along Yishun Avenue 11 within the next two months. The site is earmarked for housing development under the Design, Build and Sell Scheme (DBSS) and will have a potential yield of 700 flats, it said.

Source, Straits Times 5 March 2010

DEVELOPERS are gearing up to launch more projects – especially prime ones – into a thriving property market driven by confident buyers keen to splash out on the back of the improving economy and a low interest rate environment.

The Government’s anti-speculation moves last month are having little effect on genuine home hunters, who have ever wider real estate options.

Potential buyers will certainly have no lack of choices when it comes to new launches this month with ‘easily half a dozen launches’ coming up, said CB Richard Ellis (CBRE) executive director of residential services Joseph Tan.

Mass-market projects have been setting the pace for months but prime developments, which began inching back into the market late last year, are becoming more prevalent.
A CBRE Research report yesterday said that Singapore’s luxury residential market is expected to make a strong rebound.

It noted that new luxury projects recorded launch prices of between $2,500 and $3,400 per sq ft (psf) in the fourth quarter of last year.

This beats the $2,100 psf to $2,700 psf range achieved at the end of 2008, demonstrating a strong turnaround, it said.

In January and February, 88 units of CapitaLand’s prime Urban Suites were sold at $2,500 psf on average while about 35 units of The Laurels in Cairnhill Road went at $2,500 psf to $2,900 psf, it said.
The launches coming up on the weekend include the Hiap Hoe Group prime estate Waterscape At Cavenagh, and Hong Leong Holdings’ Aalto.

The Waterscape At Cavenagh will house 200 one- to four-bedroom units and penthouses ranging from 581 sq ft to 2,992 sq ft. Prices at this weekend’s launch will be about $1,880 per sq ft.

Hiap Hoe gave a preview of the project in late November and sold just three units at a median price of $1,909 psf. Another five units were sold in December. But this year it has sold 88 units, with the bulk transacted over the weekend after Chinese New Year, from $1,715 psf to $2,020 psf or $1.03 million to $3.15 million.

This weekend will also see Hong Leong Holdings release 60 high-floor units at the freehold 196-unit Aalto in Meyer Road. Prices will start from $2,000 psf.

A handful of lower-floor units are also available, from $1,500 psf. Absolute pricing ranges from $3.1 million for a 1,442 sq ft three-bedder to $5.3 million for a 1,959 sq ft four-bedroom unit.
The Aalto was first released in 2007 with units selling for around $1,950 psf. It was then launched in January 2008.

One unit was sold in January this year at $2,011 psf, leaving 78 unsold units in the condo, which will receive its temporary occupation permit in September.
A Hong Leong Holdings spokesman said: ‘We have maintained the original selling price of the Aalto in light of premium value and location.’

Next weekend, buyers can look forward to Cheung Kong Holdings’ The Vision in West Coast Crescent, The Laurels and Tiong Aik’s Coralis in Joo Chiat Road. The Vision, a 99-year leasehold condo, is said to be priced about $1,100 psf.

Coralis is a freehold condo featuring one-bedders as small as 495 sq ft and penthouses of up to 3,089 sq ft. Indicative pricing is from $1,350 to $1,550 psf.

The pace will quicken over the next two to three months with possible launches including 76 Shenton Way, Seascape and Residences at W in Sentosa Cove, The Waterline on the former Toho Gardens site in Yio Chu Kang, UOL Group’s Dakota Crescent project, and Starlight Suites in River Valley Close.

CBRE Research said the luxury projects Ardmore 3 and those on the sites of the old Grangeford, Hillcourt and Parisian estates are likely to be marketed in the first half of the year. Prices and rents of luxury properties are expected to rise by 10 per cent to 15 per cent and 5 per cent to 10 per cent respectively this year.

Overall, prices will continue to rise but at a much less frenetic pace, said Mr Tan. ‘If you look at the recent land tenders, there’s a certain replacement cost that developers need to look at. Some developers may want to put a forward price on their projects now as they don’t want to run out of their landbank too quickly.’

Source, Straits Times 4th March 2010

THE Straits Trading Company (STC) is taking over a private developer and its cluster bungalow project at Chancery Lane.

It said on Monday that it would pay an aggregate of some $13.9 million for the proposed acquisition of Tertius Development Pte Ltd, including the assignment of specified shareholders’ loans. The vendors are two individuals.

With the deal, STC will gain control of Chancery Five, a project with 12 freehold strata bungalows at 5 Chancery Lane. The development is next to Anglo-Chinese School (Primary) and Anglo-Chinese School (Barker Road).

Each bungalow will have five rooms, an entertainment room, an attic, a private basement car park, a private swimming pool and a lift spread across two levels. The homes will range from 4,800 square feet to 6,500 sq ft in size.

Tertius’ commitment to the project – including land cost, development cost and incidental selling costs – up to 2012 is estimated by the purchaser at about $58.24 million.

Eric Teng, chief executive of STC’s property arm, told BT that his unit has been looking out for opportunities in the property market. He has not set a date for the launch of Chancery Five. The project is under construction and could obtain temporary occupation permit in April next year.

According to caveats lodged with the Urban Redevelopment Authority, a detached house at Chancery Lane changed hands at $900 per sq ft in November last year.

STC’s acquisition is expected to be completed in April. The company does not foresee the purchase having a significant impact on its financial position for the year ending Dec 31, 2010.

STC shares rose five cents yesterday to close at $4.15.

Source: Business Times, 3 Mar 2010

The property unit of Straits Trading Company will be developing a cluster of freehold bungalows at the prime Chancery Lane area as the mainboard-listed company is acquiring the original developer, Tertius Development.

The project, called Chancery Five, will have 12 bungalow units and sits on a land plot of 27,600 square feet. The size of the bungalows will range between 4,800 square feet to 6,500 square feet each.

Each of the two-storey bungalows will have five rooms, an entertainment room, an attic, a private basement car park, a swimming pool and a lift.

Eric Teng, chief executive officer of Straits Trading, said the Chancery Five project is in line with its overall strategy of developing properties that are both exceptional and of high quality.

While the company did not disclose the value of the development, property analysts estimate it to be worth about S$58 million.

Based on the project’s estimated worth, Cushman & Wakefield’s regional managing director Donald Han said that the bungalows would be priced at slightly less than S$1,000 per square feet (psf).

This means each unit would be priced at about S$4.8 million, which he said is “a fair price for a bungalow on Chancery Lane”.

Mr Han added that its close proximity to top schools such as the Anglo-Chinese and Singapore Chinese Girl’s schools, as well as to Orchard Road, makes it a hit with families and sub-letters.

Meanwhile, Nicholas Mak, real estate lecturer at Ngee Ann Polytechnic, said that based on similar properties in the vicinity, Chancery Five should fetch about S$500 to S$600 psf.

“With the largest unit at about 6,500 square feet, I have a feeling that they will price it above S$4 million per unit,” said Mr Mak.

“Landed property will always have a place with investors. It has the highest price increase in 2009 compared to other types of properties,” said Mr Han.

Source: Channel News Asia, 2 Mar 2010

PROPERTY developers say they are eager to bring forward project launches to ride the buoyant market but are being held back by their limited land bank.

They were caught by surprise at the rapid market recovery, they say.

‘Many of us are now caught with a depleting land bank,’ the Real Estate Developers’ Association of Singapore (Redas) president Simon Cheong said.

‘We believe the long-term solution to a sustainable and stable market is still adequate supply,’ he added.

Credo Real Estate’s deputy managing director Tan Hong Boon summed up the mood: ‘You never know what will happen. While the going is still good, developers will want to launch quickly. This is particularly so for mass market projects.

The Government recently stepped up the supply of development sites after a lull, and believes supply is adequate.

Yesterday, a 3.02ha site at Hougang Avenue 2 was offered to developers. If interest is adequate, a tender will proceed.

Another reserve list site will be offered by May, on top of confirmed list sites, which are tendered without precondition.

The comments by Mr Cheong and Mr Tan at the Redas Chinese New Year lunch at Capella Singapore yesterday came a week after market cooling measures.

The Government imposed a duty sellers must pay if they sell within a year of purchase. It also capped bank loans at 80 per cent of a sale price, from 90 per cent.

Mr Cheong said developers want land supply fast-tracked to satisfy buyer demand to minimise speculation to ease the pressure for more anti-speculative steps.

‘Given the unexpected return of an active property market, developers over the next few months would also be actively bidding for more land,’ he said.

Redas members look forward to more confirmed list sites to replenish land banks, he said. They are looking to Government land, given limited sources of private land. A developer who declined to be named said private land owners were asking for the sky ’so we can’t buy’.

Mr Cheong said developers would rather have this problem than the bleak effects of last year’s meltdown in the banking system. ‘Managing upside is always easier than managing downside.’

The anti-speculative steps were a timely reminder, said Frasers Centrepoint chief executive Lim Ee Seng at the lunch. ‘Exceptional jumps in prices are not good for us.’ Still, he said: ‘No matter how high it gets, it will still obey the law of gravity.’

An anonymous developer said the measures had hurt sentiment a little. ‘If there are 100 buyers, maybe 10 will change their minds. I expect volume to moderate a bit.’

Still, so far the measures appear to have had little or no impact on recent sales. ‘The market is still hot,’ said an industry observer. The 608-unit The Estuary in Yishun, whose preview opened on Wednesday, has sold over 200 units.

The average price for the 99-year leasehold condo is $750 per sq ft, with units facing the Lower Seletar reservoir costing around $800 psf on average.

Separately, City Developments boss Kwek Leng Beng said at a results briefing for CDL yesterday that sentiment would remain strong among genuine buyers, despite the government measures.

Mr Cheong addressed guest of honour Finance Minister Tharman Shanmugaratnam, saying developers were disappointed at being left out of the Budget.

But they were happy at the productivity push given the long-term gains. Redas called this ‘a deferred payment hongbao’.

Looming launches include the 151-unit Seascape in Sentosa Cove and Cheung Kong Holdings’ 295-unit The Vision. Far East Organization and Frasers Centrepoint plan to release Waterfront Gold in Bedok Reservoir soon. Allgreen may launch RV Residences in River Valley and unsold units at Cascadia in Bukit Timah.

Source: Straits Times, 26 Feb 2010

City Developments Ltd (CDL), which yesterday posted its second-highest full-year net profit, is getting ready for at least five Singapore residential property launches this year.

Fourth-quarter net earnings jumped 76.7 per cent year on year to $176.7 million on the back of strong contribution from property development. Pre-tax profit from this segment rose 107.2 per cent for the fourth quarter and 14.2 per cent for the full year.

As a result, property development accounted for 70.7 per cent of Q409 group pre-tax profit; for full-year 2009, its contribution came to 65.5 per cent.

For Q409, the group booked profits from Cliveden at Grange, The Arte, One Shenton, Shelford Suites, The Solitaire, Tribeca and Wilkie Studio. Profits were also booked from joint venture projects such as Livia and The Oceanfront @ Sentosa Cove.

The group also highlighted that profits from the Volari at Balmoral and Hundred Trees condos, which are nearly completely sold, have yet to be booked as these projects are in the early phase of construction. The same goes for The Gale, a joint venture project.

CDL is targeting to launch The Residences at W Singapore Sentosa Cove next month. In April, it hopes to release a 429-unit condo at Chestnut Avenue and a 158-unit condo on the former Concorde Residences site on Thomson Road, followed by a condo in Pasir Ris (next to Livia) in June. In July or August, the group plans to launch a condo with about 150 units on the Copthorne Orchid Hotel site in the Dunearn Road area, owned by its London-listed hotel arm Millennium & Copthorne Hotels (M&C). The projects will be launched in phases.

CDL executive chairman Kwek Leng Beng highlighted that two overseas hotels in M&C’s portfolio – Millennium Seoul Hilton and The Tara in Kensington, London – could also be redeveloped into condos at the right time.

CDL’s current landbank can potentially yield about 7.1 million square foot of gross floor area.

For the year ended Dec 31, 2009, group net profit edged up 2.1 per cent to $593.4 million, the second best showing since the group’s inception in 1963. Its best bottom line, of about $725 million, was achieved for FY2007. CDL’s latest full-year turnover of $3.27 billion (an 11.1 per cent increase from the preceding year) was its highest ever.

The group sold a total of 1,508 residential units with sales revenue of $1.87 billion (including joint venture share) last year – a marked jump from the 368 units sold for a total $348 million in 2008.

CDL generated about $1 billion cash from operating activities before tax last year (2008: $516.6 million) – a feat accomplished without resorting to any equity fund raising.

The group’s board is recommending a final ordinary dividend of eight cents per share, up from 7.5 cents per share for 2008.

The group is conserving some of its cash for acquisition possibilities, especially in the West, where attractively priced deals are available.

Looking ahead, CDL expects cashflow this year to be healthy as it has pre-sold residential developments and with quite a number of its projects likely to be completed this year – including The Solitaire (which has already received Temporary Occupation Permit), Tribeca, The Oceanfront @ Sentosa Cove, Wilkie Studio and The Arte.

CDL’s gearing ratio, without taking into account fair value gains on investment properties as is the group’s accounting practice, dipped from 48 per cent at end-2008 to 40 per cent at end-2009.

It it had taken into account such gains, its gearing ratio would have fallen from 32 per cent to 27 per cent over the same period. The group managed to trim net borrowings by 10 per cent last year to $3.05 billion and achieved lower average interest rate on borrowings of 2.2-2.5 per cent, compared with 2.6-3.7 per cent for 2008.

Its interest cover ratio also increased from 11 times for FY2008 to 14.5 times for FY2009.

Net asset value per share rose from $5.97 at end-2008 to $6.57 at end-2009.

During yesterday’s results briefing, Mr Kwek also questioned accounting conventions these days that allow companies to book upward revaluations on investment properties as profits as well as to recognise profit on exceptional items such as one-off divestments.

Core earnings, which are a business’ recurring income, should be focused on instead, he argues.

‘Why do you want to add in ‘exceptional profit’, or what we used to term as ‘extraordinary profit’ to your normal profit and say: ‘My goodness, I got very good profit; I should ask my board to give me a big bonus!’?’

Source: Business Times, 26 Feb 2010

The consortium that owns the South Beach site now plans to begin construction ‘by next year’ – since most of the mega projects including the two integrated resorts are nearing completion and ‘contractors will be hungry’ for business by then.

This will enable the consortium to award construction contracts at lower cost, reckons Kwek Leng Beng, executive chairman of City Developments Ltd (CDL), a member of the consortium.

In August last year, he had indicated that construction was likely to begin around the third quarter of this year. CDL teamed up with Dubai World and El-Ad Group to buy the 99-year leasehold site for $1.69 billion at a Singapore government tender in 2007.

In June last year, a new party entered the picture when Hong Kong developer Nan Fung, along with CDL, subscribed for five-year secured convertible notes under a refinancing exercise for the site’s land loan.

CDL also announced yesterday that South Beach Consortium Pte Ltd has appointed a new CEO, Aloysius Lee, to replace Paul Gately, who has left.

Mr Lee, who came on board late last year, was formerly managing director (commercial) of Shui On Development Limited and executive director of Shui On Land, where his duties included overseeing the branding and operations of Shanghai Xintiandi.

The South Beach consortium has also hired special structural engineering consultants from the UK to assist in lowering costs by ‘value engineering’ to maximise the asset’s value. The plan is to develop South Beach into a retail, office, hotel and residential project. Mr Kwek also reiterated that the consortium is studying how to tap synergies between South Beach and next door Suntec City convention centre as well as Marina Bay Sands and Resorts World Sentosa.

Last year, Mr Kwek indicated that Nan Fung and CDL would probably be the ones to pump in further money. El-Ad and Dubai World are likely to be passive investors who may then see their share in the project diluted.

Yesterday, he said that a meeting will be held among South Beach investors sometime next week to discuss contribution for the project’s further development.

‘In terms of financing, we have not discussed and we cannot presume the two partners have no money, their shares will be diluted. Our verbal understanding with Nan Fung is that both of us will put in more money . . .

‘I am not concerned whether there’s shortage of money to build. I’m more concerned (whether we) can we build something that can be very exciting, everyone falls in love with, (and comes) knocking at my door: ‘Can I buy this?’

Based on a recent external valuation for the year ended Dec 31, 2009, no impairment charge is required for the South Beach development.

Source: Business Times, 26 Feb 2010

YANLORD Land Group’s net profit dropped 16 per cent to $118.4 million for the fourth quarter ended Dec 31, 2009, as revenue and gross profit margins plummeted.

But for the full year, net profit jumped 44 per cent to $325.4 million as strong demand for its residential projects in the first nine months lifted sales and prices.

Q4 revenue dived 48 per cent year-on-year to $214.1 million with gross profit margin plunging 23.9 percentage points to 38.4 per cent due mainly to the change in product mix. Yanlord attributed this to a decline in gross floor area delivered and lower average selling prices (ASPs) because of lower proportion of high-margin projects sold compared to the fourth quarter of 2008.

Its revenue for the year surged 59 per cent to $1.6 billion as the gross floor area delivered rose 33.5 per cent while ASPs grew 13.7 per cent to 19,658 yuan per square metre (psm). Q4 earnings per share fell to 6.09 cents from 7.67 cents a year ago.

As at end-2009, the group’s total pre-contracted sales amounted to $1.2 billion.

Fair value loss on investment properties, however, widened to $120.69 million in 2009 from $81.22 million in 2008.

As at Dec 31, 2009, cash and bank balances were substantially higher at $1.36 billion, up from about $0.4 billion a year earlier. Yanlord attributed this to prudent financial policies and strong performance.

The group said its directors are confident of the company’s performance relative to the industry trend for the next reporting period and the next 12 months.

Yanlord has proposed a first and final dividend of 1.68 Singapore cents per share, representing a payout ratio of about 10 per cent.

Yanlord’s chairman and chief executive Zhong Sheng Jian said the group remains confident of the long-term prospects of China’s real estate sector despite near-term uncertainties arising from regulatory policies.

‘We will continue to focus on our business strategies and comparative advantages in the development of quality residential apartments in prime locations within high-growth PRC cities,’ he said.

Last December, the group obtained a three- year US$400 million term loan facility and will use this to refinance the outstanding amount of a US$200 million facility it obtained in 2007 and for general corporate purposes, including acquiring new land.

This year, the group has already launched new batches of apartment units in Yanlord Riverside Plaza (Phase 1) in Tianjin and Yanlord Riverside City (Phase 3) in Shanghai. These projects have recorded new highs in ASPs, rising 32.2 per cent to 53,033 yuan psm in Shanghai and 27.4 per cent to 23,241 yuan psm in Tianjin.

Yanlord said it will continue to launch new batches of its projects this quarter in Shanghai, Suzhou, Tianjin and Zhuhai.

Yanlord shares ended trading yesterday at $1.77, one cent down.

Source: Business Times, 26 Feb 2010