CapitaLand’s Singapore home sales crashed a whopping 78% in FY14

It only sold 278 units last year.

CapitaLand’s Singapore residential sales dipped steeply to just 278 units in FY14, a 78% decline from the 1,260 units that it sold in FY13.

Total sales value plunged to $561m last year, over three times less than the sales value of $2.4b that CapitaLand reported in FY13.

CapitaLand also registered a profit impairment of $77.4m for both launched and unlaunched residential projects in Singapore last year.

The group fared no better in China, where it sold 4,961 residential units compared to 7,688 units that it sold a year ago.

In spite of the bleak numbers, analysts believe that CapitaLand’s residential portfolio remains manageable and the group will continue to deliver positive results in upcoming quarters.

CMC Markets notes that Capitaland has been impressive in systematically adjusting their product mix to rely less on the often volatile property development sub-sector--from 32% in 2012 to 26% at present--and instead focusing on businesses which offer them a better recurring income,

Meanwhile, OSK DMG believes that its One CapitaLand strategy will continue to drive growth despite weak sales.

“A single listed developer integrated across asset classes, [will deliver] a sustainable ROE of 8-12%. Management reiterated it will achieve this via its stance of having 25% trading properties and 75% investment properties in allocated assets. Other growth drivers could come from its 32% investment properties that are still under development or not yet stabilised and future strata sales of existing properties. Apart from the core markets in Singapore and China, the group will also focus more on growth markets in Vietnam, Indonesia and Malaysia this year,” stated OSK DMG.