Keppel Land nine-month profit up 62.2% to $311m

Property trading, Keppel REIT and fund management outperformed and drove the surge.

For the first nine months of 2012, net profit from property trading almost doubled to $230.1 million, reflecting higher earnings contribution from Reflections at Keppel Bay and Marina Bay Suites in Singapore, as well as from completed phases at The Springdale in Shanghai, The Botanica in Chengdu and Central Park City in Wuxi in China, noted Keppel Land noted in its financial highlights release.

"Property investment turned in a 26.8% net profit improvement to $58.6 million, driven by Keppel REIT’s better performance following its acquisition of Ocean Financial Centre in December 2011. Profit contribution from the Group’s fund management vehicles, Keppel REIT Management and Alpha Investment Partners (Alpha), grew to $41.3 million, or 14% of net profit, on higher management fees," Keppel Land said.

The property developer also said it sold about 320 residential units in Singapore in the first nine months of this year, mostly from The Luxurie in Sengkang, which has sold 94% of the 520 units launched as at end-September. The Group submitted the top bid for a well-located suburban residential site along New Upper Changi Road, close to Tanah Merah MRT station. Keppel Land plans to develop about 700 residential units ranging from one- to four-bedrooms, upon URA’s award of the site.

Keppel Land added that the Singapore office market achieved healthy take-up of about 1.69 million sf in the first nine months of 2012, according to CB Richard Ellis. Grade A office rents moderated slightly to $9.80 psf compared with $10.10 psf in the previous quarter. Marina Bay Financial Centre Tower 3 secured new tenants from diverse industries, pushing commitment level to about 76%.

Meanwhile, its property fund management business continued to grow its property portfolios. Keppel REIT expanded its prime office portfolio in Australia with the acquisition of a 50% interest in a new 35-storey office tower to be constructed in the heart of Perth’s Central Business District (CBD). Completion of the premium Grade A building, which will be built to Australia’s green standards, is targeted for the second half of 2015. Alpha Asia Macro Trends Fund (AAMTF) has completed the divestment of two serviced apartments in Hong Kong and its follow-on fund, AAMTF II has acquired a 50% stake in 78 Shenton Way and sold off a high-end residential unit in Singapore.

Overseas residential sales was close to 1,200 units in the first nine months of 2012, Keppel Land said. "China recorded lower sales of about 290 units in the third quarter, mostly from The Springdale in Shanghai and Central Park City in Wuxi, as sales launches were pushed back. New launches of projects and phases will be timed to market conditions and may include Tianjin Eco-City’s Phase 2 residential development, Seasons Garden as well as Phase 7 of The Botanica township and Phase 1 of Park Avenue Heights, a new residential development in Panchenggang, in Chengdu."

The Group has expanded its presence in Chengdu through the recent acquisition of a 28.7-ha prime residential site in the Xinjin County for about $133 million. Located in the prime residential enclave of Mumashan, the new development will be the Group’s fifth residential project in Chengdu and will provide over 570 landed homes.

Moving ahead, the Group said it will continue to explore sites for residential, township, commercial and mixed-use developments while concurrently monitor the markets for opportune launches of new projects and phases.