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For 2HFY2022, City Developments Ltd (CDL) has announced profits of $165.8 million, up 42% year-over-year, on the strength of a 27% growth in sales to $1.82 billion.
Thanks to operational recovery post-pandemic and several divestiture profits, the property and hotel firm reported record-breaking annual earnings of $1.29 billion. Earnings were $84.7 million for the fiscal year ending in 2021.
Revenue for the fiscal year 2022 was $3.29 billion, an increase of 25.4% over the previous year. Property development still brings in the most money, accounting for 42% ($1.38 billion) of the total income last year. There were three major developments in Singapore that made a difference: Haus on Handy, Amber Park, and Irwell Hill Residences.
Growth in Hotel Sector
While hotel operations for CDL were impacted by the epidemic, they have since seen remarkable growth. The hotel industry had a 91% gain in RevPAR (revenue per available room) in FY2022, reaching $137.90, contributing significantly to the overall 58% growth in revenue to $1.38 billion. Average room prices rose by 48.9 percent, which contributed to the RevPAR gain, while an increase in occupancy of 14.2 percent was also a factor.
Executive chairman Kwek Leng Beng describes CDL’s FY2022 achievements as “sterling,” thanks to the company’s wise divestments and the excellent success of its core businesses. He highlights the fact that “notably, our hotel businesses made an amazing resurgence,” returning to pre-pandemic levels in most areas.
He continues, “With business travel on the upswing and unrelenting pent-up demand for leisure travel, our hospitality industry will continue to develop and is primed to be a star performer for the year ahead.” A major initiative for CDL’s hospitality business, he says, will be speeding up the company’s asset optimization plans.
Sherman Kwek, CEO of the CDL group, claims the company has embraced capital recycling and released dormant value via strategic asset sales and other value-adding measures. We have been responsibly managing our capital the whole time, working to lower our gearing and increase our cash reserves. He also said that CDL would keep up its discipline, agility, resilience, and innovation in order to generate sustainable growth and maximize long-term shareholder value even while market concerns prevail.
Growth in New Home Sales and Collective Sales
The sale of the Seoul Millennium Hilton, the profit from CDL Hospitality Trusts (CDLHT), and the conclusion of the collective sales of the Tanglin Shopping Centre and the Golden Mile Complex, both of which are owned by CDL, are examples of substantial divestment profits made by CDL over the past year. CDL claims that since the assets were kept for an extended length of time at book value, substantial financial gains were realized.
Singapore saw 1,487 home sales from CDL in FY2022, with the company’s executive condos (ECs) accounting for $2.9 billion in sales. In contrast, the company only sold 2,185 homes for $4.3 billion during FY2021.
The introduction of two joint venture projects with MCL Land—Piccadilly Grand and Copen Grand—bolstered sales in FY2022. Upon its debut in April 2022, the 407-unit Piccadilly Grand at Farrer Park has already sold 86% of its apartments. One month after opening its doors in October 2017, Copen Grand, an EC in Tengah Town, has sold out all of its available units.
Pipeline Projects by CDL
Tembusu Grand at Jalan Tembusu
In 2023, the company plans to release three new homes. Tembusu Grand, a 638-unit development on Tanjong Katong Road and Jalan Tembusu in District 15, is scheduled for release in the first half of 2023 by CDL. As such, it is a partnership with MCL Land.
Newport Residences, a 45-story freehold construction with 246 flats, is also scheduled for a 1H2023 release. The Newport Residences are a component of the larger Newport Plaza, a commercial and residential complex that also has a variety of other living options, including serviced apartments, office space, and retail establishments. Tanjong Pagar’s old Fuji Xerox Towers on Anson Road have been redeveloped into this modern building.
The Myst at Upper Bukit Timah
CDL will introduce The Myst, a condo with a 99-year leasehold along Upper Bukit Timah Road, in the latter part of the year. A total of 408 dwelling units are spread over two 24-story towers in this development.
CDL Proposed Dividend
CDL will celebrate its 60th anniversary in style by issuing a final dividend of 8 cents per share and a special dividend of 8 cents per share. Total cash dividend for FY2022 is 28 cents, including the 12 cents paid as an interim special dividend in September 2022. In comparison, CDL distributed 20.2 cents worth of cash dividends from CDLHT units and paid a cash dividend of 12 cents for FY2021.
The NAV of CDL as of December 31, 2022, was $10.16, up 9.7 per cent from the previous valuation. The corporation still takes a cautious approach by reporting its investment and hotel assets at cost less accrued depreciation and impairment losses. CDL’s revalued NAV as of December 31, 2022, would be $16.98, up from $15.73 as of December 31, 2021, after accounting for fair value gains. If hotel revaluation surpluses were included in, a share’s RNAV (realisable net asset value) would be $19.14.
During the last 60 years, the company has “weathered numerous economic storms, property cycles, and extraordinary shocks,” according to chairman Kwek. Despite these challenges, the company has persevered and become stronger as a result of its bold approach. We are determined to take CDL to new heights, and we want to do it with the same dedication and focus that got us here.