DBS expects FY2015 to be a bumper year for CapitaLand China, which saw residential sales soar to RMB11.6 billion in Q3 – its highest level in four years.
However, local media reports say the property developer is not letting its guard down and plans to roll out more strategies aimed at optimising profitability on its assets in China.
CapitaLand is strengthening its presence within the country by focusing on Tier 1 and Tier 2 cities. DBS noted that there is no dearth in demand given the increasing foreign direct investments, improved connectivity and growing pool of workers.
The company also plans to land-bank mergers and acquisitions as well as enter into joint ventures with partners having access to prime land. It is also open to partnering with local government agencies on urban renewal projects to access prime sites at a discount.
Meanwhile, CapitaLand is keen on keeping its total project costs low by being discerning with land tenders, particularly with the increased land pricing levels. It is also dead set on increasing returns by shortening the development cycle of projects while keeping a scrutinizing eye on costs.
Looking ahead, DBS expects the recently acquired plot of land in Guangzhou to provide long-term earning visibility for CapitaLand.
“In the pipeline the group has over seven million sq m of GFA of which over 2,000 units launch ready in the pipeline in Q4 2015, mainly in the cities of Beijing, Guangzhou and Chengdu, Hangzhou,” said DBS.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
