CDL posted a Profit after Tax and Minority Interests (PATMI) of S$538.2 million for FY 2017 (FY 2016: S$653.2 million). In FY 2016, the Group’s performance was boosted by a variety of factors, including a sizable contribution from Hong Leong City Center (HLCC) in Suzhou, higher profit margin projects like Coco Palms, D’Nest and Lush Acres Executive Condominium (EC), divestment of its 52.52% interest in City e-Solutions Limited, sale of Exchange Tower and recapitalisation of Summervale Properties Pte. Ltd. (which holds Nouvel 18) via the Group’s third Profit Participation Securities.
Revenue for FY 2017 remained relatively stable at S$3.8 billion (FY 2016: S$3.9 billion). FY 2017 revenue contributors include the strong take up for Gramercy Park, sales from existing property development projects such as The Venue Residences, Coco Palms and HLCC in Suzhou, and contributions from the Group’s investment properties. Revenue growth from the hotel operations segment was enhanced primarily by the full-year contributions from certain hotels within the Group’s listed subsidiary, Millennium & Copthorne Hotels plc (M&C), notably Millennium Hilton New York One UN Plaza (re-opened in September 2016 after refurbishment) and Grand Millennium Auckland (included in September 2016).
Mr Kwek Leng Beng, CDL Executive Chairman, said, “After a challenging four-year period, there is a boost in sentiment for the Singapore residential market, with increased sales volume and prices. To drive growth, we will look to our property development business, particularly in Singapore where the upturn in the property cycle is only just beginning. Singapore is a market we know intimately well, having operated here for over 50 years. We are well-poised to ride the upturn with around 2,750 residential units in the pipeline across the mass, mid- and high-end segments. CDL will continue to be highly disciplined and selective in making strategic bids. For our hospitality business, we will prudently expedite the refurbishment of M&C’s portfolio which is a key contributor to our recurring income.”
Mr Sherman Kwek, CDL Group Chief Executive Officer, said, “We are privileged to have clinched multiple attractive land sites over the past 12 months and we will continue to strengthen our landbank in Singapore as well as overseas. In addition to growing our property development business, we will focus on enhancing our asset management capabilities and driving greater operational efficiency within the business. To supplement our recurring income streams, we will also look towards the creation of a sizable and sustainable fund management business.”
Creation of Fund Management Business
The Group will create a sustainable fund management business to generate attractive long-term, risk adjusted returns for its investors and shareholders. The fund management business will also help the Group to diversify its earnings, enhance its recurring income streams and widen its investor base. This strategy will enable the Group to tap on the growing appetite of institutional investors for unlisted real estate funds and concurrently deliver a higher return on equity to its shareholders.
The Group’s goal is to be a leading fund manager in Asia by 2023 and to achieve this milestone, it will target to attain Assets Under Management (AUM) of US$5 billion by then. As such, the Group aims to launch its first series of close-ended, co-mingled funds focusing on core, core plus and opportunistic real estate investments in Asia Pacific by 2019.
The Group will use its core competency in real estate to create real estate vehicles with different risk return profiles to cater to the needs of various institutional and high net worth individuals. The focus is not only on growing AUM but to achieve credible performance and establish a strong track record.
“TO SUPPLEMENT OUR RECURRING INCOME STREAMS, WE WILL ALSO LOOK TOWARDS THE CREATION OF A SIZABLE AND SUSTAINABLE FUND