Oxley, CDL rush to reassure investors as Brexit fears mount

The sterling's devaluation won't rock their balance sheets.

Mainboard-listed developers City Developments and Oxley Holdings have clarified that their portfolios in the United Kingdom will not be extremely affected by Brexit, and assured jittery investors that adequate hedging policies will protect their balance sheets from the effect of currency fluctuations.

In a statement, CDL said that it continues to have confidence in the long-term fundamentals of the UK economy, and reiterated that its strategy of targeting UK nationals for its residential developments remains sound.

CDL highlighted that all its residential acquisitions in the past two years have been outside Central London, and a majority of its UK development projects cater to the local market.

This helps insulate its projects from any potential impact of UK’s impending exit from the EU, CDL said, adding that its revenue exposure to the UK stands at 12% while its exposure to the rest of Europe is not significant.

CDL said that its foreign exchange exposure to the UK is naturally hedged by its policy of matching receipts and payments, and asset purchases and borrowings in each individual country.

As for Oxley, the group noted that hedging policies mean that the devaluation of the British pound will have a limited impact on currency conversion to the Singapore dollar.

Oxley added that the depreciation of the GBP is expected to generate more purchasing demand in the UK market, and said that it has received increased enquiries from potential overseas buyers since the Brexit result was announced.

Oxley also noted that Brexit will have an indirect benefit to its upcoming project in Dublin, Ireland, as an increasing number of financial institutions are considering setting up offices there. The project is expected to be launched in 2016/2017.