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reporter2
13-02-18, 06:46
CapitaLand reports 37.8% fall in 4Q earnings to $267.7 mil; acquires Pearl Bank Apartments for $728 mil

By: PC Lee

13/02/18, 06:55 am

SINGAPORE (Feb 13): CapitaLand reported a 37.8% drop in 4Q17 earnings to $267.7 million from a year ago, mainly due to lower handover of units for development projects in China.

This brings FY17 earnings to $1.55 billion, up 30.3% from a year ago, the highest since FY2008.

In 4Q17, revenue decreased by 34.6% to $1,212.6 million mainly due to lower completion and handover of units from development projects in China.

The decrease was partially mitigated by higher contributions from development projects in Singapore, rental revenue from newly acquired and opened properties, as well as the consolidation of revenue from CapitaLand Mall Trust (CMT), CapitaLand Retail China Trust (CRCT) and RCS Trust (RCST) with effect from 3Q17.

Collectively, the two core markets of Singapore and China accounted for 74.5% of the group’s revenue, down from 87.2% a year ago.

EBIT from Singapore and China was $285.5 million and $380.7 million respectively.

The group also recorded a net fair value gains of $82.8 million.

For the full FY17, CapitaLand sold 1,409 residential units in Vietnam to achieve record sales of $459.6 million, 63% higher than the $282.1 million achieved in FY16.

The group also recorded higher sales value in Singapore at $1.48 billion from 407 residential units sold in FY17 compared to $1.42 billion in FY16.

In China, 8,497 units were sold for about $3.1 billion.

Lim Ming Yan, President & Group CEO of CapitaLand Group, says: “CapitaLand’s resilient financial performance has enabled the group to deliver a return on equity of 8.5% for FY17, compared to 6.6% in FY16. Largely attributable to the success of our active portfolio reconstitution strategy, we unlocked $2.6 billion through divestments and announced $5.7 billion of new investments in FY17.”

CapitaLand is proposing a final dividend of 12 cents per share for FY17, 2 cents higher than the FY16 dividend of 10 cents a share.

In a separate filing, CapitaLand says it has acquired Pearl Bank Apartments through a private treaty collective sale for $728 million

The sale price, with an additional premium estimated at $201.4 million payable to the state to top up the lease to a fresh 99 years, translates to a land price of $1,515 psf per gross floor area.

The prime site atop Pearl’s Hill in Outram Park has a land area of 82,376 sf, with an existing plot ratio of 7.45.

CapitaLand plans to redevelop the site into a high-rise residential development comprising around 800 units.

Shares in CapitaLand closed at $3.47 on Monday.

reporter2
13-02-18, 11:06
CapitaLand buys Pearlbank Apartments for $728 million

By Lin Zhiqin / EdgeProp

February 13, 2018 8:30 AM SGT


Following the close of its collective sale tender on Dec 19, 2017, Pearlbank Apartments in Outram was sold through a private treaty collective sale to CapitaLand Limited for $728 million, announced the developer on Feb 13. The sale price, with an additional lease top-up premium for a fresh 99 years estimated at $201.4 million, translates to a land price of $1,515 psf ppr. There is no development charge payable, says Colliers International, which brokered the deal.

The 82,376 sq ft Pearlbank Apartments site atop Pearl’s Hill in Outram Park has a Gross Plot Ratio of 7.2 under the 2014 Master Plan. However, it has an existing Gross Plot Ratio of 7.4479. As such, the site has the potential to be redeveloped into a residential development with a total GFA of approximately 613,530 sq ft, says Colliers.

Subject to conditions precedent, CapitaLand plans to redevelop the Pearlbank Apartments site into a highrise residential development with about 800 units. Every unit will enjoy unblocked panoramic views extending from the Central Business District (CBD) to Sentosa as the site is on elevated ground, says CapitaLand. The project is targeted for completion by early 2023, right after the opening of the third MRT line in Outram, the Thomson-East Coast line, says Ronald Tay, CEO of CapitaLand Singapore.

“This site is a rare gem with its prime location at the confluence of Singapore’s business and cultural districts as well as its excellent transport connectivity,” says Lim Ming Yan, president and group CEO of CapitaLand Limited. “The acquisition is in line with CapitaLand’s disciplined investment strategy to build our quality residential pipeline on a sustainable basis.”

The 37-storey Pearlbank Apartments comprises a total of 288 units (280 apartments and eight commercial units). According to Colliers, the apartment owners, whose unit sizes range from approximately 1,323 sq ft to 3,993 sq ft, stand to receive between $1.8 million and $4.9 million from the successful sale of the property.

Meanwhile, owners of commercial units with sizes ranging from approximately 700 sq ft to 5,630 sq ft, will potentially receive between $1.2 million and $6.9 million. The Pearlbank Apartments site is subjected to the Pre-Application Feasibility Study (PAFS) which was announced by the Urban Redevelopment Authority on November 13, 2017.

“The introduction of the PAFS - just weeks before the close of the public tender - was a setback for the collective sale as interested parties needed more time to assess its impact,” says Alex Poh, chairman of Pearlbank Apartments collective sale committee. “Despite the challenges, we are pleased that Colliers, with its extensive network of investors and real estate expertise, managed to secure a deal through private treaty.”

While residents of Pearlbank Apartments had previously explored the idea of conserving Pearlbank Apartments, recent sentiment has strongly shifted to redevelopment, says Poh. A deeper analysis of the building structure and the required enhancement work show that conservation would be a costly undertaking and a huge burden for the owners, explains Poh, who adds that “it is not a viable nor favourable option for the residents.”

“I believe that the future development will be well-received by investors as well as home buyers who aspire to live in an exciting and historic locale in the city,” says Tang Wei Leng, managing director at Colliers International. “Future apartments in the development could be sold at an average price of $2,600 psf or around $2.5 million, which is relatively affordable for such a choice location.”

reporter2
21-02-18, 20:51
Iconic Pearl Bank Apartments sold for $728m to CapitaLand

Subject to approval, the Pearl Bank Apartments site can be redeveloped into an 800-unit condominium project. It has a land area of 82,376 sq ft.

FEB 14, 2018

Owners of 288 apartments may get between $1.8m and $4.9m

Lynette Khoo


The Pearl Bank Apartments has been sold to CapitaLand for $728 million, making it fourth time lucky for the horseshoe-shaped condominium at Outram Park.

Owners of the 288 apartments, ranging in size from 1,323 sq ft to 3,993 sq ft, stand to receive between $1.8 million and $4.9 million from the private treaty collective sale. Owners of the eight commercial units, which vary in size from 700 sq ft to 5,630 sq ft, will potentially receive between $1.2 million and $6.9 million, said marketing agent Colliers International.

For developer CapitaLand, yesterday's sale would be its first residential land acquisition here since it bought a Government Land Sales site in June 2013 in Bukit Timah, where it is developing Victoria Park Villas.

The Pearl Bank deal, sewn up in the wee hours of yesterday morning, is not a one-off endeavour, said CapitaLand president and group chief executive Lim Ming Yan.

It is part of the group's plan to shore up a dwindling local residential pipeline amid an upturn in the local residential market, he added.

CapitaLand's offer for Pearl Bank Apartments matched the reserve price set by owners. This translates to a land price of about $1,515 per sq ft per plot ratio (psf ppr), after factoring in a $201.4 million premium for a lease top-up to a fresh 99-year tenure.

Subject to approvals, the site can be redeveloped into an 800-unit condominium project. The land acquisition is expected to be completed in July or August, and the new project may be ready for launch in the first half of next year.

"We are not paying over-the-top kind of price for the site," CapitaLand Singapore CEO Ronald Tay told reporters at the group's full-year earnings briefing.

"That is why we did not participate in the original tender. At that time, our assessment was that if anyone would go in, in the bidding situation, it would end up to be $1,600 to $1,700 (psf ppr). The math would not make sense for us," he said. "Given where the market is today, the break-even price we are talking about, there will be decent profit margin to be made."

The site, which is subject to the pre-application feasibility study on traffic impact, has a land area of 82,376 sq ft. Given the existing plot ratio of 7.45, it may be redeveloped into a residential development with a total gross floor area of 613,530 sq ft.

It is near Chinatown and minutes away from Outram MRT station as well as two major expressways.

The Outram precinct is also slated to become a healthcare, wellness and research hub under a 20-year redevelopment plan by healthcare group SingHealth.

Consultants are expecting a break-even price of $2,000 to $2,250 psf, and the average selling price to be around $2,400 to $2,600 psf.

"I think this is a good investment and will draw many buyers when launched," said Mr Lee Nai Jia, head of research at Edmund Tie & Company. "From anecdotal evidence, we observe that there are more buyers in their 30s purchasing homes in prime locations close to the Central Business District, and these buyers like areas that have a strong cultural identity."

The project is targeted to be completed by early 2023, right after the opening of the Thomson-East Coast Line - the third MRT line in the Outram area - which will make the commute to Shenton Way, Marina Bay and Orchard even more convenient.