City Developments' sales value nearly halved in Q1

This was blamed on the absence of ultra-luxury sales.

City Developments (CityDev) posted sales of $278.1m in Q1, which is only around half of the $516.3m figure recorded in Q1 2019, an SGX filing revealed. This is despite having sold more units at 185 in Q1, compared to 163 units in the corresponding period last year.

Sales for this quarter dampened as the majority of the residential units sold were mass and midmarket projects, such as Piermont Grand, Whistler Grand and The Tapestry, as well as Amber Park, a luxury project. Comparatively, Q1 2019 mostly comprised ultra-luxury projects such as Boulevard 88 and South Beach Residences.

CityDev noted that as all six of the group’s operating sales galleries have been closed, they have been stepping up their digital marketing efforts through virtual showflat tours and online sales presentations to potential buyers. Interest remains encouraging in April, after they saw an increase of over 30% in online traffic views for its launched projects.

However, the firm is still expecting its sales volume to further decline as long as the circuit breaker measure remains in place.

“Notwithstanding the temporary setback, the Group continued to register sales in April for projects such as Amber Park, Boulevard 88, Coco Palms, Piermont Grand, Sengkang Grand Residences, South Beach Residences, The Jovell and The Tapestry,” CityDev stated in the filing.

Meanwhile, new home sales for the group’s launched projects in China, the UK and Australia have been slowed down significantly by lockdowns imposed by local governments.

As for its overall portfolio, the group’s Singapore office portfolio remained resilient with committed occupancy of 90.9%, above the island-wide occupancy of 89%. However, retail and F&B businesses have been impacted by the decline in customer demand, strict safe distancing measures and closures for non-essential services.

With this, about 80% of the group’s retail tenants in Singapore (totalling 426 tenants) are not operating.

CityDev’s global hospitality portfolio also took a severe hit, noting that the total revenue per room (RevPar) crashed 27% to $90.60, whilst its occupancy also dropped from 70% in Q1 2019 to 52.1% in Q1.

In Singapore, all 10 hotels are operational. However, RevPAR still declined 28.8% due to lower occupancy.

As for CityDev’s capital position, its net gearing ratio stood at 44% with interest cover at 6.2 times, whilst it has cash reserves of $3.3b and an undrawn and committed credit lines of $2.3b.

The group’s total gross borrowings have a weighted average debt expiry of 2.3 years as at 31 March. For the $1.8b in loans due for the remainder of 2020, the group has refinanced 17% and set aside funds for the repayment of 65%, with the balance of 18% scheduled for renewal in Q3.

“There are no material concerns over the Group’s ability to fulfil its near-term debt obligations,” it stated.

Looking forward, CityDev expects that the disruptions from the COVID-19 pandemic will continue to persist in the near-term.