CityDev pins hopes on overseas development projects as local property development tumbles

Its development projects would begin contribution in 2H.

The property firm’s results for the first quarter have been dampened by its floundering property development and hotel operations, but City Developments is hardly worrying.

According to a report by RHB Research, its overseas development projects in China/UK and Lush Acres EC would start contributing in 2H16.

“CDL’s overseas development projects would begin to contribute in 2H16. We ascribe a 50% chance that CDL would be re-included into the FTSE EPRA/NAREIT Global Developed Index in its June quarterly review, with hotel operations accounting for less than 24% of its total FY15 EBITDA,” RHB Research said.

RHB Research adds that it expects another round of Profit Participation Securities (PPS) to unlock value from its South Beach project with a GDV north of SGD3bn, likely by end of this year.

Meanwhile, for the local residential market, CDL has 790 units of attributable unsold inventory as at 1Q16.

“The group launched two executive condominium projects last year ie the Brownstone (now 67% sold) at Canberra Drive, which is expected to obtain the temporary occupation permit in 1Q18, and the Criterion at Yishun Street 51 (~20% sold), scheduled to obtain TOP in 2Q18,” RHB Research said.

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