| | | |  | | | People walk through Singapore's financial district in Raffles Place. | | | | | | | SINGAPORE : City Developments is bullish on the Singapore office market.
The developer revealed on Monday that it had turned down an offer for the 11 properties that it had intended to sell to Suntec REIT last year.
That is despite the offer being 25% or $200 million more than the original $788 million that Suntec would have paid.
CityDev booked a 95% jump in second quarter earnings to $44.9 million, in line with market expectations.
CityDev made a big call on the high-end residential segment and is reaping the rewards with the successful launch of St Regis and The Oceanfront at Sentosa.
But now it is turning its eye on the office sector.
Betting on future capital gains, CityDev rejected an unsolicited offer to buy 11 of its commercial properties originally offered to Suntec REIT last year.
"We have in fact received a very concrete offer for the package of properties that were originally meant for Suntec REIT. One to two months ago, the offer was over $200 million more than what Suntec REITs were prepared to pay. The board considered it but decided not to accept the offer," said MD of City Developments Kwek Leng Joo.
With a debt-to-equity ration of 0.66x, CityDev is not in a hurry to sell.
The company is not revealing how it will deploy its funds.
"That depends on what we want to do next. If we want to create a REIT, then of course the gearing will go down tremendously. If we have a lot of opportunities to buy another real estate company, maybe we need more gearing. So that depends on the situation prevailing at that time," said Kwek Leng Beng, executive chairman of City Developments.
Still, City Dev is expected to continue doing well in the residential market.
City Developments has a residential landbank with gross floor area of about 6.5 million square feet, which management says should last for about five years.
The company is poised to ride the recovery of all the property segments as 60 percent of its landbank is in the mass to mid market while the remaining is in the high-end segment.
- CNA /ls
|
