City Developments Limited (CDL) says it is “confident” it will see a “steady and sustained recovery”, in its business update for the 3QFY2021 ended September.

The developer expects a better growth trajectory in the near-term amid the high vaccination rates, the resumption of international travel and the move to open economies.

In its property development business, CDL sold 414 units with a total sales value of $784.4 million in the 3QFY2021

For the nine months ended Sept 2021, CDL sold a total of 1,382 units with a total sales value of $2.5 billion, up 30% and 76% y-o-y respectively. At this level, it has exceeded FY2021's total of $1.8 billion.

According to CDL, the strong sales were mainly due to its luxury developments like Irwell Hill Residences and Amber Park, as well as its mid-market project Sengkang Grand Residences.

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The projects are 74%, 84% and 91% sold respectively.


See: Potential listing of UK-focused office S-REIT could unlock value for CDL: CGS-CIMB


In November, CDL and its joint venture (JV) partner CapitaLand Development (CLD) have commenced the sales gallery preview of its 696-unit luxury residence CanningHill Piers.

The project has drawn “strong interest” ahead of its sales launch on Nov 20 due to its rare riverfront location.

That said, CDL is continuing to see ongoing labour and resource shortages at its various project sites due to cross-border restrictions and supply chain disruptions.

In Australia, domestic demand for residential assets remains healthy in the 3QFY2021

CDL’s JV mixed-use development on Smith Street in Melbourne’s Fitzroy has received “strong enquiries”. The project comprises six townhouses, 56 apartments, 679 sqm of office space and 575 sqm of retail.

In New South Wales, CDL’s 135-unit luxury retirement JV project, Waterbrook Bowral, has seen a positive response with 77 townhouses fully sold.

The 215-unit Brickworks Park in North Brisbane has also achieved pre-sales for 70% of its 151 released units.

In the UK, the group says it has seen increased sales enquiries for its London properties. Rental demand amid the post-pandemic changes is also likely to remain healthy, it adds.

As at 3QFY2021, over 35% of the 239-unit development in Teddington are sold or occupied.

In China, office leasing is “generally stable”, although impact on the operations of off-campus education providers is “evident”

Retail malls have also begun to feel the impact of the clampdowns as tenants in the education sector may not be able to continue their operations and have to terminate their leases prematurely.

Footfall has also been affected, especially on weekends and holidays as classes are not allowed then.

That said, CDL says its HLCC Mall in Suzhou is still “leasing up well” as at 3QFY2021 with a committed occupancy of 94%.

In Shanghai, CDL’s Hong Leong Hongqiao Center in the Hongqiao CBD has reached 96% as at 3QFY2021.

As at Sept 30 CDL’s office portfolio in Singapore has a committed occupancy of 91.5%. Its flagship Grade A office building, Republic Plaza, continues to register positive rental reversion during the quarter, with a committed occupancy of 94.7%.

In retail, CDL’s tenants’ footfall and gross turnover sales (GTO) remained resilient for the quarter.

The group’s committed occupancy for its retail space as at end-September stands at 93.3%.

Singapore-listed REIT to progress

CDL says it is continuing to progress with its plans for a Singapore-listed REIT with UK commercial assets.

It will hold its initial public offering (IPO) and listing when market conditions are “more favourable”.

“In tandem with global economic reopening, the current backdrop of trading volatility, lacklustre macroeconomic conditions and uncertainties arising from the prolonged pandemic, are expected to ease going into 2022,” says the group.

Tourism

With the opening of borders and easing of travel restrictions, CDL’s hotels saw global occupancies rise to 55.4% in the 3QFY2021, from the 36.1% in the 3QFY2020.

Global revenue per average room (RevPAR) has surged 117.1% y-o-y to $91.6 in the quarter.

Y-t-d ended September global occupancy has improved to 46.9% from the 38.1% in the same period last year.

Global RevPAR has improved 23.8% y-o-y to $67.2 for y-t-d ended September.


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As at Sept 30, CDL’s net gearing ratio stood at 66% with interest cover at 2.7 times.

The group has also reported cash reserves of $2.5 billion.

Shares in CDL closed 2 cents higher or 0.28% up at $7.22 on Nov 16.

Photo: Samuel Isaac Chua/The Edge Singapore