Singapore’s biggest developer CapitaLand posts full-year loss

CapitaLand Ltd., Singapore’s largest developer, posted a full-year loss after writing down the value of some investment properties and residential projects during the pandemic.

The S$1.57 billion ($1.2 billion) loss was mainly attributed to revaluation and impairment costs of S$2.5 billion, it said in a statement Wednesday.

Singapore’s developers are still reeling from the health crisis, which has battered the property market, particularly office and hospitality assets. Prime grade office rents in the Raffles Place and Marina Bay precincts declined about 10 per cent in 2020, and early termination of leases continued to rise in the fourth quarter.

Revenue for the year rose 4.8 per cent to S$6.5 billion, CapitaLand said. Operating profit after tax and minority interests fell 27 per cent to S$770 million.

Property consultancy Knight Frank foresees lower net new demand for office space in Singapore given that some companies have adopted a rotational remote working approach. Citigroup Inc. and Mizuho Financial Group Inc. are among financial firms that have cut office space in the city-state, in part due to the success of working from home, with such arrangements potentially staying for the longer term.

DBS Group Holdings Ltd. and United Overseas Bank Ltd., two of Singapore’s largest banks, have allowed employees to work remotely on a permanent basis, part of the major work-culture changes triggered by the pandemic.

For CapitaLand, the overall committed office occupancy rate in Singapore stood at 85 per cent as of December 31. As of October 16 last year, 43 per cent of the office community under its portfolio had returned to the workplace.

Still, while the pandemic has been disruptive, it won’t change the firm’s plans to become a “globally competitive asset manager and real estate company,” chief executive officer Lee Chee Koon said in a statement.

With a global portfolio worth about S$132.5 billion as of Dec. 31, the developer sees Singapore and China as its core markets but has been expanding in places such as India, Australia, Europe and the U.S. For instance, it plans to more than double its assets under management in India to S$7 billion by 2024.

CapitaLand’s “strong balance sheet and cashflow position tide us through the ongoing Covid-19 pandemic,” Lee said. “We will be able to capitalize on new opportunities to further transform our business.” – Bloomberg

Source: NST