CapitaLand reports 1H21 net profit surged by nearly 10 times on recovery in Singapore, China

CapitaLand construction site in Ho Chi Minh City, VietnamCapitaLand construction site in Ho Chi Minh City, Vietnam

CapitaLand reported Friday its first half net profit surged 9.5 times on-year to S$922.15 million, driven by the nascent economic recovery in its two core markets, Singapore and China, which accounted for 77 percent of revenue.

Revenue for the January-to-June period increased 34.7 percent on-year to S$2.73 billion, the property investment and development player said in a filing to SGX.

Investment properties, including office, retail, business park, logistics, industrial and lodging, accounted for 69 percent of revenue, CapitaLand said, noting that income is recurring in nature.

Development projects posted stronger revenue as more units were handed over in China and the company posted higher progressive revenue recognition from the One Pearl Bank project in Singapore, partially offset by lower unit handover in Vietnam.

“The [revenue] increase was also attributed to lower rental rebates granted to our tenants in Singapore and China as the Covid-19 situation in these two countries gradually stabilised, higher transactional fee from the listed REITs and unlisted funds, as well as contribution from the newly acquired business park properties in China and an office building in Singapore, 79 Robinson Road, which commenced operation in second half of 2020,” CapitaLand said.

Cautious outlook

Lee Chee Koon, CEO of CapitaLand Group, was cautious despite the earnings recovery.

“While we are encouraged by the progress achieved in the first half of 2021, we are mindful that our businesses continue to face disruptions
and uncertainties heightened by Covid-19; and the wider economy has yet to resume normalcy,” Lee said in the statement.

Lee added this was CapitaLand’s last set of results before the group’s restructuring, which will see CapitaLand Investment become the listed entity, while the property development division will be taken private.

Once listed on SGX, CapitaLand Investment, or CLI, will become Asia’s largest listed real estate investment manager (REIM) and the third-largest globally, with pro forma real estate assets under management of around S$115 billion, as of end-2020, CapitaLand has said previously.

CLI will have two business segments: fee income-related business based on investment and asset-management, property management and lodging management, while the second will be real estate investments via direct holdings in investment properties and stakes in listed and unlisted funds, CapitaLand has said previously.