CapitaLand, Southeast Asia's largest property developer, expects to invest more than S$6 billion (US$4.97 billion) this year, mainly in Singapore, where it sees room for growth in the private residential market, and in China.
"This year we will probably do more than S$6 billion worth of investments. The investment will still continue to be in our core markets," Liew Mun Leong, CapitaLand's president and CEO told reporters on Thursday.
CapitaLand, about 40 percent-owned by Singapore state investor Temasek, will seek opportunities for acquisitions whenever expectations of land prices have moderated, he added.
Shares of CapitaLand have plunged about 25 percent since the start of the year, weighed by concerns that government measures to curb property prices in China and Singapore will hurt earnings. The Straits Times Index fell about 2.4 percent over the same period.
However, Liew said he remained optimistic about demand for housing in China despite the measures, and that Singapore's private residential market still has further upside.
"I think the private market (in Singapore) will still grow. If you look at sales now, although volume wise it has not caught up, but prices are still good," Liew said.
Singapore and China accounted for about 36 percent each of CapitaLand's total assets each as of the end of June.
Although CapitaLand's sales volumes in China have fallen in the first half of the year compared to a year earlier, the average selling price of its units have increased by 1,000 yuan (US$155.4) per square meter in the same period, Jason Leow, CEO of CapitaLand China said.
The property developer expects to launch about 2,500 more residential units in the second half of the year in China. It has already launched 1,700 residential units, and has a pipeline of 22,000 units over the next 4-5 years, it said.
CapitaLand said on Thursday its second quarter net profit, excluding revaluations and impairments, rose 27 percent year-on-year, helped by higher revenue from development projects in Singapore and China.
CapitaLand earned S$171.3 million (US$141.8 million) net profit excluding revaluations and impairments in the three months ended June, up from a restated S$135.3 million a year ago.
The company restated its 2010 earnings downwards to make them comparable with its second quarter results that adopted a new accounting standard that took effect Jan 1.
The new accounting rule means CapitaLand's earnings from overseas development projects can only be recognized upon full completion, resulting in earnings that are more volatile and lumpy.
The property developer's revenue in April-June was S$740.4 million, 25 percent higher than a year ago, as stronger sales from projects in Singapore and China as well as higher fee-based income helped offset lower revenue from development projects in Australia.
"While global economic growth remains patchy and despite concerns about Europe's debt crisis and the U.S. budget deficit, Asia continues to present growth prospects," said CapitaLand Chairman Richard Hu in a statement.
CapitaLand made about S$5 billion worth of investments mainly in Singapore, China, Australia and Vietnam in the first half of the year, the statement said.
At 0529 GMT, shares of CapitaLand were 0.36 percent higher at S$2.81, outperforming the STI's 0.48 percent decline.
(US$1 = 1.207 Singapore dollars) (US$1 = 6.434 Chinese Yuan)
REUTERSBusiness & Investment Opportunities
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