Property investor and developer Ho Bee Land reported on Friday that its second quarter net profit rose 98.1 percent on-year to S$71.52 million, on the sale of a 30-year leasehold interest in a petrol-station site and higher rental revenue at a London property.
Revenue for the quarter rose 16 percent on-year to S$43.4 million, mainly on higher rental revenue from 67 Lombard Street, London, which was acquired in June 2017, and Ropemaker Place, which was acquired on 15 June 2018, it said in a filing to SGX after the market close on Friday.
Revenue from sales of development properties rose 23.6 percent on-year in the second quarter to S$3.455 million, while rental income rose 15.5 percent on-year to S$39.94 million, it said.
Fair value gain
Ho Bee Land also had a fair value gain of S$28.3 million in the quarter relating to a 999-year investment property on Bukit Timah Road in Singapore after a valuation exercise taken in conjunction with the company’s sale of a 30-year leasehold interest on the site, it said. It noted the sale consideration was “significantly higher” than the previous valuation as of 31 December 2017.
It also noted that its share of profit in its joint venture projects in Shanghai and Zhuhai rose to S$25.7 million in the second quarter from S$12.2 million in the year-earlier period.
In the first half, net profit rose 30.8 percent on-year to S$120.89 million, while revenue increased 15.4 percent on-year to S$92.06 million, it said.
The revenue increase in the first half was mainly on the sale of a small site in Gold Coast, Australia, for A$5.5 million, or around S$5.7 million, and the rental contribution from Lombard Street and Ropemaker Place, it said.
Ho Bee Land noted that its acquisition of Ropemaker Place for 650 million British pounds would generate an annual rental income of 30.57 million pounds, a return of around 4.7 percent.
“With this acquisition, the group now has a portfolio of seven commercial properties in London with a lettable area of more than 1.5 million square feet. Together with The Metropolis in Singapore, recurring income will continue to be a strong contributor to the group’s earnings,” Ho Bee Land said in its outlook statement.
Chua Thian Poh, chairman and CEO of Ho Bee Land, pointed toward the “tough” property cooling measures the government recently imposed on Singapore’s residential market.
“These measures will have minimal impact on the group’s performance. Our strategic decision to diversify into other markets and grow our recurrent income base has placed us in a good position for sustainable growth,” Chua said in the statement.