Keppel Land’s nine months profit drops to $191.8 mn

Yet the company’s fund management income grew 70% to contribute a profit of $39.7mn amidst reduced contribution from property trading.

Keppel Land’s net profit for the first nine months of 2011 was lower at $191.8 million against the restated net profit of $256.1 million for the same period in 2010. This was due to a lower contribution from property trading, which was partially offset by an improved showing from fund management income and a one-off divestment gain in the first quarter of 2011.

Net profit from property trading was 42.3% lower at $116.5 million for the nine months ended 30 September 2011. This was mainly due to the adoption of a revised accounting policy1 this year under which revenue and profit from overseas trading projects are recognised only on full completion. In addition, there was substantial net profit contribution from the completion of units sold under the Deferred Payment Scheme at Marina Bay Residences in Singapore1 for the first nine months of 2010.

Fund management income from K-REIT Asia Management and Alpha Investment Partners increased 70% to $39.7 million, marking the best nine months ended September performance to-date.

Seizing Opportunities to Strengthen Growth Platforms New home sales in Singapore was slightly lower at an initial estimate of 4,380 units in the third quarter of 2011 compared with 4,444 units in the previous quarter, according to the Urban Redevelopment Authority.

Private residential prices grew by 1.3% this quarter versus 2% in the last quarter, marking the eighth consecutive quarter of moderating price increase.

Keppel Land sold about 420 homes in Singapore in the first nine months of this year. The majority of the sales came from its latest residential project in Sengkang, The Luxurie, which has received encouraging take-up of 86% of the 250 units launched in late August.

Keppel Land‘s proposed divestment of its 87.5% interest in Ocean Properties Pte Ltd, the owner of Ocean Financial Centre, to its associate K-REIT Asia will allow the Group to unlock value and enable K-REIT Asia to enhance its regional commercial property portfolio. The divestment, at about $1.6 billion for a period of 99 years, will be subject to approvals from both minority shareholders and unitholders at their respective extraordinary general meetings. Meanwhile, CB Richard Ellis reported that Grade A rents increased by 4.3% quarter-on-quarter in the third quarter of 2011 to $11.06 psf.

Keppel Land’s private fund management vehicle, Alpha Investment Partners (Alpha) has launched a followon fund on the back of the well-received Alpha Asia Macro Trends Fund (AAMTF). The new fund, AAMTF II, achieved a first closing of over $556 million committed and is making its maiden investment in Central Park Hotel in Hong Kong. To strengthen its presence in China, Alpha recently opened a Shanghai office, widening its regional office network spanning Singapore, Taiwan, Korea and Japan.

Townships Continue to Chalk Up Home Sales

Keppel Land sold more than 1,600 homes overseas in the first nine months of 2011, with a take-up of almost 900 units in the third quarter. In China, buyer interest remains healthy for the Group’s quality projects such as The Botanica in Chengdu, The Seasons in Shenyang and The Springdale in Shanghai. China home sales for the third quarter amounted to 780 units. In August, Keppel Land China acquired a prime 21.5-ha lakefront residential site in Wuxi, which can yield around 2,500 units, including commercial components.

In Indonesia, Jakarta Garden City sold close to 240 homes in the first nine months of this year, a 38% improvement over the same period last year.

Moving ahead, the Group will launch new developments and project phases opportunistically and will concurrently seek well-located sites in Singapore and overseas for the development of residential, townships, commercial and mixed-use projects.