Keppel Land, Singapore's third-biggest developer by market value, posted on Wednesday a 3.5% fall in quarterly net profit as the US subprime mortgage crisis hurt new property launches.
The firm said demand for residential property in Singapore had moderated due to inflation, which hit a 26-year high in Singapore on Wednesday, but maintained that overall demand in Asia remained strong.
"Market sentiments were affected by the US subprime mortgage problems and inflationary pressures," KepLand said in a statement.
The firm said that it will launch two luxury residences, located in the financial district of Singapore, when "market conditions are more favourable". The luxury residences were to be launched between late last year and early this year.
KepLand, which derives the bulk of its income selling apartments in Asian countries including Singapore, China, Vietnam, and India, earned S$60.3 million (US$44.77 million) in the three months to end-March, down from S$62.5 million reported a year ago.
KepLand said demand for Singapore office space remained firm with average prime office rents rising 6.7% to S$16.00 per square foot per month in the first quarter.
The developer, 53%-owned by conglomerate Keppel Corp (KPLM.SI: Quote, Profile, Research), said this week that it secured an option to develop a 1,500 unit residential project in Vietnam costing US$390 million.
Shares of KepLand fell 24% in the first quarter compared with a 1.3% rise for CapitaLand and a 22% fall for City Developments, underperforming a 13% drop in the broader Straits Times Index.FTSTI.
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