CDL units sold fall 41% YoY in Q1 2021

This is due to the cooling measures implemented late last year.

Listed firm City Developments Limited and its joint venture associates saw a 41% year-on-year decrease in units sold in the first quarter as the market sentiment was dampened by the property cooling measures and some homebuyers adopted a “wait-and-see approach.”

In a statement, the company said it only sold 188 units with a total sales value of $477.9m, compared to the 319 units sold in the same period last year with a total sales value of $513.6m.

“While transaction volume is temporarily affected, the Group expects the property market to remain resilient and housing prices to hold firm due to moderate supply and strong underlying fundamentals. Market activities are expected to improve with new launches coming onstream,” it said.

Meanwhile, the Group’s Singapore office portfolio had a “healthy” committed occupancy of 93% as of 31 March 2022,  which is above the island-wide occupancy of 88%. It is led by its flagship Grade A office building in Raffles Place, Republic Plaza, which is 95% occupied.

CDL said it is “cautiously optimistic” about the office market recovery as safe management issues are being relaxed and occupiers are gradually returning to the workplace.

The committed occupancy of its retail portfolio is at 95%, above the island-wide occupancy of 92%, with flagship mall City Square Mall occupancy at 97%, and average tenants’ sales recovering during the period to close to pre-pandemic levels.

Palace Renaissance also had its committed occupancy reaching 99% and average gross turnover sales surpassed pre-pandemic levels.

“The progressive easing of social distancing measures and the rise in inbound travel will boost the recovery of footfall and tenants’ sales. However, retailers remain cautious due to manpower shortages and rising operating costs,” it said.

Its Singapore hotels are recovering well with a 74.3% increase in the average room rate and a 43.8% rise in the revenue per available room, mainly driven by demand from staycations, and corporate groups, and with two hotels catering to the Government quarantine business.

The performance of its hotels in the Rest of Asia has improved, but is weighed down by the resurgence of Omicron cases and travel restrictions in North Asia, CDL said, adding that its hotels in Singapore and Kuala Lumpur are poised to benefit from the lifting of international travel restrictions in April 2022. 

It also divested the freehold Tanglin Shopping Centre for $866m via a public tender closed on 22 February. It also completed the divestment of Millennium Hilton Seoul and adjoining land site for $1.25b (KRW 1.1t), gaining $526.2m, net of taxes and related transaction costs from the disposal.

Last 6 May, it also announced the collective sale of the Golden Mile Complex at $700m to a consortium. CDL holds 6.3% of the total share value and 34.8% of the Strata Area which is mainly attributed to the large carpark.

CDL said it is optimistic about the outlook for its core business segments for the rest of the year as there are more residential launches planned in Singapore and overseas. It is also ensuring that it will ramp up its commercial and hospitality portfolio, “on the back of a strong global rebound.”

“With the global recovery underway, the Group will focus on executing its Growth, Enhancement and Transformation (GET) strategy to accelerate growth, enable asset and operational enhancements, and embrace 5 innovative strategies to transform the Group into a stronger and more resilient company, while employing capital recycling initiatives to unlock and maximise shareholder value,” it said.