CapitaLand turns to China home sales as local home deals dwindle

China sales surged 162% in Q2.

China’s robust residential market has emerged as a bright spot for CapitaLand, particularly in light of Singapore’s policy-battered home sales landscape.

According to OCBC, CapitaLand’s China home sales surged 162% to 2,764 units in the second quarter, compared to 1,054 units in 2Q14.

Despite robust sales, OCBC said that CapitaLand's gross margins for the group’s Chinese residential segment have eased to around 20% currently and will likely continue to face downward pressure ahead.

In Singapore, CapitaLand sold 37 units worth $106m over the quarter. 

“CAPL’s domestic unsold inventory stock amounts to ~S$2.7b, which is about 7.6% of the group’s total assets. Management continues to hold a cautious stance on the domestic residential space and expects persistent headwinds from existing cooling measures.