South-east Asia’s largest property developer CapitaLand has posted a net profit of $476.1 million in the second quarter of this year, and the company said it will set up a new business unit in Vietnam and China aimed at affordable housing.
The company has bounced back from a $156.9 million net loss in Q2 last year, which was affected by a $212.6 million net fair value loss due to the increasing valuation of properties in Singapore and Australia. By contrast, the company recorded no major write-ups in Q2 this year.
CapitaLand’s net profit in Q2 reached $271.7 million, excluding impairments and revaluations. This was more than twice the $124 million net profit recorded in the same quarter last year.
Revenue in the second quarter increased 48 percent to $873.9 million due to better contributions coming from most of its business units.
“We have performed well in our core markets of Singapore, China, Australia and Vietnam this quarter,” said Liew Mun Leong, CEO of CapitaLand Group, which was picked up by The Business Times. “In Singapore, we continue to see strong sales momentum for our residential projects and recorded total sales of about $1.3 billion in the first six months of this year, mainly from Urban Suites and The Interlace.”
He added that Singapore’s office prices are recovering, as demand has rebounded and rents have troughed. CapitaLand’s Q2 result fell after it suffered from write-downs of investment properties over the last year.
Looking forward, CapitaLand unveiled its plan to set up a new business unit in Vietnam and China to build “affordable housing”. It said that Vietnam and China are seeing high housing demand due to rapid mass urbanisation.
“There is an opportunity for CapitaLand to further diversify and position itself in the affordable housing segment in addition to its existing established mid to high-end segments,” said CapitaLand.