Referring to “current market conditions”, KepLand postponed the construction of the Madison Residences in Bukit Timah and the highly boasted Marina Bay Suites, which the company has a one-third share. The Marina Bay Suites with 221 units are being developed by KepLand in cooperation with Hongkong Land and Hutchison Whampoa/Cheung Kong Holdings.
KepLand announced yesterday in a filing with the Singapore Exchange the construction deferral of Madison Residences with 56 units in Bukit Timah on the former Naga Court site.
In the second half of the previous year, KepLand had managed earlier to sell only one unit in the project, at approximately $1,740 per sq ft. A spokeswoman of KepLand, however, told BT yesterday that the unit’s sale has been called off by common agreement. She said, “We are unable to provide details due to confidentiality”. When questioned, she revealed “a decision has been made to defer the commencement of the main construction of Marina Bay Suites”. However, the building of the residential projects of KepLand in Singapore called The Promont, which is situated in Cairnhill, will continue.
Initially, the three-party partnership that develop the condominiums wanted to launch the project at the end of January last year; however, it was delayed to the same quarter later, and even then, that didn’t come into a reality. Until now, the project has not been launched.
The spokeswoman of KepLand did not tell the exact period when will the construction postponements for Madison Residences and Marina Bay Suites end.
In the company’s issue to SGX, it stated that the construction postponement for Madison Residences is unanticipated to cause big impact on the company’s net tangible asset per share and consolidated earnings per share for the current fiscal year ending 31 December 2009.
Yesterday, in a statutory filing with SGX, the construction group KSH Holdings said that it has agreed to the KepLand’s request to postpone the Madison Residences’ construction. The deferral is unexpected to cause any material impact on KSH for the fiscal year ending 31 March 2009. In April last year, KSH declared that it had succeeded the $53 million contract from KepLand referring to the Madison Residences’ construction.
The chief executive of KepLand, Kevin Wong, said that the group will be having a reassessment in January to know if it can defer the construction of some of its projects.
“We are reviewing our operation costs as well as the project costs of all our development projects to trim fat and conserve cash, so that we can invest in any attractive opportunities that come along”, Mr Wong said.
“This cost review exercise could include developing projects in phases to meet demand and even temporarily suspending the entire project if it does not add value to the company under current market conditions”. He added that those projects that are most probably to be delayed both in abroad and in Singapore are those that are yet to be launched for sale.
For the year ending 31 December 2008, KepLand’s earning declined by 70.8 percent to $227.7 million, compared to $779.7 million during the FY 2007.