Real estate giant City Developments Ltd (CDL) is stepping up plans to reshape its former advertising buildings in Singapore’s central business district after the COVID-19 pandemic benefited the group in the first six months of the year.
CDL stated that it submitted plans to the Urban Redevelopment Authority to rebuild the construction of the 38-story Fuji Xerox Tower in Tanjong Pagar District and the seven-story shopping center and shopping complex on Havelock Road. Both households may gain advantages from the higher proportions of parcels under government incentive programs.
The SGX-listed developer unveiled the redevelopment plans on Thursday, reporting a 99% drop in net profit in the first six months of the year, compared to the same was in 2019. CDL, which has approximately S$23.8 billion ($17.4 billion) of assets under control worldwide, reported only $3 million in a net source of revenue from January to June, while the group’s hotel business recorded losses, new home sales declined and investment asset revenues declined due to the serious effects of pandemic.
“The COVID-19 pandemic has overshadowed the core concepts of core business and eroded biological growth, leaving many corporations in a weakened state as they continue to face macroeconomic uncertainties beyond their control,” said Kwek Leng Beng, executive chairman of the CDL. “While our genuine real estate progression and investment asset segments have remained resilient, our hotel business remains under pressure in the coming quarters.
The company’s Millennium and Copthorne unit was the hardest hit by the pandemic when cities around the world closed their foreign borders to curb the spread of COVID-19. The hotel operator recorded a pre-tax loss of S$208 million, which included a decay of assets of S$34 million. That’s 49% more than the S$140 million tax loss expected last month.
Despite the challenging economic environment, CDL is actively investing in key markets around the world. In April, the company agreed to buy a 51% stake in the Chinese developer Sincere Property Group, based in Chongqing, for RMB 4390 million ($632.4 million). In the same month, the company increased its stake in IREIT Global, a genuine pan-European real estate investment fund, to 20.9%.
Last month, CDL added to its portfolio of rental apartments in Japan with the acquisition of 10-story absolute-owned assets in Yokohama. In years, the corporate has a greater presence in the country where it lately has residential assets in Osaka and Tokyo.
The company will continue its expansion and transformation strategy as this unprecedented economic crisis continues, said Sherman Kwek, CDL’s chief executive.
In line with this approach, the company will continue the remodeling of the Fuji Xerox Tower in Tanjong Pagar and the Central Mall on Magazine Road, once Singapore approvals are obtained.
CDL plans to build a 51-story commercial, residential, and service mixed-use apartment tower with a gross 655,000-square-foot (60,851 square meter) domain at the Fuji Xerox Tower site at the southern end of the city center. The new construction will produce 25% more GFA than the existing complex on the site.
Near Clarke Quay, the company plans to demolish Central Mall and build a combined community of offices, shops, hotels and serviced apartments. CDL did not supply the planned GFA for the project, the existing on-site design in the center of Singapore’s historic river has a built-in domain of 240,000 square feet.
On the other side of the Singapore River from the Central Mall site, CDL had partnered in the past with Singapore government developer CapitaLand to jointly rebuild the Liang Court grocery shopping complex along Clarke Quay into a mixed-use allocation comprising two 700-unit respective towers. , a unit of 475. hotel and an apartment component of 192 units.
CDL’s reproach plans come when the CBD government’s incentive program for the city’s aging neighborhoods and announces residential progression in the urban core has helped revive negotiations on Singapore’s workplace buildings in recent months.
This week alone, Tuan Sing Holdings agreed to sell the Robinson Point construction near Raffles Place for S$500 million ($364.2 million), 34% more than the asset e-book price. The previous market deal came after investment in assets in Singapore fell by more than two-thirds in the first six months of 2020.
In July, asset developer Fragrance Group built its 29-story work tower on the edge of the raffles of Place’s Central Commercial District to be acquired for an initial value of S$715 million. Construction is about a five-minute walk from CDL’s Fuji Xerox Tower.
Also last month, Pacific International Lines, in monetary difficulties, Singapore’s largest container shipping company, put its construction near Raffles Place on the market for an indicative value of S$350 million.
“They asked us if we wanted to sell some of our buildings,” said Sherman Kwek, son of CDL’s executive chairman. “But we’d rather remodel and reposition those assets.”
It makes sense that CDL retains those assets, said Vijay Natarajan, an analyst at RHB Securities in Singapore. “Singapore is a crown jewel for CDL,” Natarajan said. “It is imaginable that CDL monetizes some of Sincere’s assets in China or sells certain UK assets to a REIT.”
The company plans to sell non-essential hotel assets and investment homes owned by Sincere Property in China, young Kwek said. Such divestments will take some time because “we’re not in the chimney sale,” he said.
Sincere Property has a portfolio of 27 investment homes in China, adding the Chengdu Hilton Hotel and CHINT-TUS Harbour Business Park in Shanghai’s Songjiang District, as well as the Starlight [email protected] Center and Xinhua Sincere Center in Chongqing.
The organisation is also exploring the option to promote some of its UK hotel homes in a REIT that may be indexed on the Singapore Stock Exchange.
CDL inventories rose 1.4% to S$8.46 at the close of operations in Singapore. The inventory is excited as it is quoted to about part of its revised net asset of S$16.61, Natarajan said of RHB.
As the pandemic continues to wreak havoc on the global economy, the CDL will prioritize cost control measures and their balance sheet. Lately, the organization has more than S$5 billion in money and credits.
“During the 57 years of CDL history and registration, we have survived many difficult times, more complicated than the last,” said the oldest Kwek. “With our strong balance and diversified portfolio globally, we remain confident of our ability to weather and weather this storm.”