With headwinds expected to persist in the Republic’s residential market as a result of the various property curbs, South-east Asia’s largest developer CapitaLand yesterday said it would have to focus more on the prices of its offerings amid strong competition.
“In terms of pricing for residential (property), we’ve noticed that recent launches and relaunches are very attractively-priced, so we have to price close to the market … We’re still sitting on a cushion, which means there’s still a buffer between the selling prices for our projects versus the costs, so that will give us some price flexibility,” said Mr Wen Khai Meng, chief executive of CapitaLand Singapore.
CapitaLand relaunched its Sky Habitat 99-year leasehold condominium project at a lower price in April after the curbs caused sales to stall. The developer priced Sky Habitat at 10 to 15 per cent lower than the average selling price of S$1,583 during the project’s initial launch in 2012. As a result, it has sold 328 of the 509 units available, but the improved performance was insufficient to offset lower revenue contribution from other projects such as The Interlace and Bedok Residences.
This led to a 20.9 per cent on-year slip in revenue from the Singapore segment to S$317.8 million in the April-to-June period.
CapitaLand’s group revenue fell 13.2 per cent to S$875.3 million in the second quarter, mainly due to lower contribution from Singapore and China. However, net profit climbed 14.5 per cent to S$438.7 million, helped by higher revaluation gains from the company’s investment properties as well as stronger profits from China and its shopping mall business.
CapitaLand expressed confidence about the Singapore market, saying it will launch its freehold condominium project Marine Blue in the second half of the year. President and group chief executive Lim Ming Yan said: “Despite the headwinds, projects that are well-designed, well-built, well-located and also priced correctly are still doing well, an example being Sky Habitat. And also in the course of the past one-and-a-half years, despite the many rounds of cooling measures, our projects have continued to sell.”
He also remains positive about the company’s prospects in China as the country continues to urbanise. “Despite the talk about China’s growth slowing, it is still a relatively high growth (market). So, we remain very positive about Singapore and China despite the short-term headwinds that we’re seeing.”