Why CityDev can't be too happy yet with 48% jump in profits

Worst may not be over from property curbs.

According to OCBC Investment Research,

CDL’s 2Q13 PATMI increased 48% YoY to S$203.8m, mostly due to disposal gains from an industrial site at 100G Pasir Panjang.

However, due to recent property curbs, the group expects stronger headwinds and moderating transaction volumes and prices in 2H13. In addition, management indicates that a situation of residential oversupply could ensue in 2014.

Here's more:

While navigating a more onerous risk-reward landscape ahead, we believe that CDL could take a more measured approach to land-banking over FY13-14.

We note that CDL currently has 1.2b sq ft GFA of attributable domestic residential land-bank versus 1.9b sq ft GFA sold in 1H13 alone; which could point to a more subdued rate of sales ahead.

Residential sale levels fairly firm. Year to date sales performances remain fairly firm, with recent launches showing healthy sell-through rates. D’Nest (912 units), Bartley Ridge (868 units) and Jewel@Buangkok (616 units) are currently 91%, 75% and 49% sold, respectively.

In the second half of the year, CDL is expected to launch the 380-unit Lush Acres EC project and a mixed development at MacPherson/Upper Serangoon Rd (266 residential and 28 retail units).

Hotel subsidiary Millennium and Copthorne Hotels’ (M&C) 2Q13 PATMI decreased 17.7% YoY due to challenging conditions in Singapore
and Seoul and enhancement works whick took out 181k net rooms nights.