Singapore’s biggest developer CapitaLand posts full-year loss

25-Feb-2021 Intellasia | Bloomberg | 7:03 AM Print This Post

CapitaLand Ltd, Singapore’s largest developer, posted a record full-year loss after writing down the value of some investment properties and residential projects during the pandemic.

The S$1.57 billion ($1.2 billion) loss was its first since 2001, Chief Financial Officer Andrew Lim told analysts and reporters Wednesday. Revaluation and impairment costs totalled S$2.5 billion, the company said in a statement.

Singapore’s developers are still reeling from the health crisis, which has battered the property market, particularly office and hospitality assets. Still, Chief Executive Officer Lee Chee Koon struck an optimistic tone, saying the worst is over as Covid-19 infections show signs of falling in key markets.

“We are quietly confident,” Lee said at a virtual briefing on the results. Business partners are “talking about investing for the future.”

He singled out Singapore and China, where CapitaLand has major exposure. “The two countries have managed the crisis relatively a lot better than other markets,” Lee said.

It’s been a tough year for Singapore developers. prime grade office rents in the Raffles Place and Marina Bay precincts declined about 10 percent in 2020, and early termination of leases continued to rise in the fourth quarter. Property consultancy Knight Frank foresees lower net new demand for office space in Singapore given that some companies have adopted a rotational remote working approach.

Citigroup Inc. and Mizuho Financial Group Inc. are among financial firms that have cut office space in the city-state, in part due to the success of working from home. DBS Group Holdings Ltd and United Overseas Bank Ltd, two of Singapore’s largest banks, have allowed employees to work remotely on a permanent basis.

Global Ambitions

For CapitaLand, the overall committed office occupancy rate in Singapore stood at 85 percent as of December 31. As of October 16 last year, 43 percent of the office community under its portfolio had returned to the workplace.

Revenue for the year rose 4.8 percent to S$6.5 billion, the developer said. Operating profit after tax and minority interests fell 27 percent to S$770 million.

Shares of CapitaLand rose 0.3 percent in Singapore trading, paring this year’s decline to 4.6%.

While the pandemic has been disruptive, it won’t change the firm’s plans to become a “globally competitive asset manager and real estate company,” Lee said earlier in a statement.

With a global portfolio worth about S$132.5 billion as of December 31, the developer sees Singapore and China as its core markets but has been expanding in places such as India, Australia, Europe and the US

CapitaLand’s “strong balance sheet and cashflow position tide us through the ongoing Covid-19 pandemic,” Lee said. “We will be able to capitalise on new opportunities to further transform our business.”


Category: Singapore

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