CapitaLand profit soars

CAPITALAND reported a profit after tax of $S608.1 million for the first quarter of 2007, which is 4.7 times the profit achieved in 1Q2006.

The group’s earnings before interest and tax was $S819.5 million for 1Q2007, about $S595.9 million or 266% higher than 1Q2006.

The higher EBIT was due primarily to better profit margins on the back of Singapore’s strong property environment. Together with contributions from China and Australia, residential EBIT rose to $S121.2 million, up by more than 80% from 1Q2006.

Commercial EBIT rose to $S560.9 million from $S93.1 million, the latter includes a $S55.9 million gain from the sale of Shanghai Xin Mao Property Development. The business unit also benefitted from increased rental income from Singapore commercial properties, higher property management fee, a fair value gain of $S472.9 million based on the sale of Temasek Tower, and the $S41.2 million gain from the sale of Samsung Hub.

Retail EBIT grew on improved rentals following the asset enhancement of retail properties and higher fee income. Serviced residences also did well. The group benefited from a $S33.8 million gain arising from the placement of Ascott Residence Trust units.

CapitaLand’s president Liew Mun Leong said the upswing in the Asian real estate market, the on-going urbanisation of the Asian economies and the institutionalisation of Asian real estate are all positive growth drivers for the entire group.

“The Singapore property market continues to present exceptional demand driven growth for all our business units. We also continue to grow overseas.

The group has also raised its target for assets under management to $S18 billion, covering China, Japan, Malaysia and oil-rich countries like Bahrain, where the group recently launched the first equity Sukuk fund, which is also its second Shariah compliant product.

Australian Property Journal