Keppel Land adopts "wait-and-see" approach after property cooling measures

Keppel Land adopts "wait-and-see" approach after property cooling measures
By Lynda Hong | Posted: 23 January 2013 2323 hrs
 
SINGAPORE: Property group Keppel Land expects new home sales in Singapore to "come down quite a bit" this year, after new private home sales hit a record 22,000 units in 2012.

The developer of Reflections at Keppel Bay is not going to rush into launching new projects in the coming months. Instead, Keppel Land is adopting a wait-and-see approach, before making its next move. This after the seventh round of property cooling measures were introduced by the government earlier this month.

Already, some developers, like Qbay, have announced discounts to move sales.

Ang Wee Gee, CEO of Keppel Land, said: "We see prices perhaps consolidating. But we don't see a major correction. But neither do we see the price spiking further because the government will introduce further measures to dampen it. So I suppose where the situation, where the upside possibility is not high, but the downside risk may not be that high as well."

Keppel Land has a huge cash position of S$1.6 billion. This gives it holding power from launching new projects till markets improve. But the company reports net profit in Q4 2012 halved from a year earlier to S$527.3 million. Full year net profit was 39 per cent lower at S$838.37 million.

Still, Keppel Land's earnings beat analysts expectations.

Wilson Liew, an analyst at Maybank-Kim Eng, said: "We are looking at how China sales performed this year as they have shown in FY 2012 that sales rebounded somewhat, and we hope to see the sales momentum to be carried into 2013.

"We also would look out for the potential divestment of Marina Bay Financial Centre Tower 3, sometime this year. In Singapore, we are likely to see a slowdown in sales for the next three months on the back of the cooling measures.

"But we still think that the long-term fundamentals are still attractive, particularly for the residential sector and we will lookout how well Keppel Land does in their launches, such as the ones in Tanah Merah."

Key contributors to last year's total sales of 2,350 homes, Singapore and China will continue to be Keppel Land's core market. The property giant said the stringent cooling measures introduced in the two countries will prevent asset bubbles from forming, supporting a healthy development of these markets. So far, half of Keppel Land's assets are in Singapore, while 35 per cent are in China.

Keppel Land also proposed a final dividend of 12 cents per share.

-CNA/ac

- wong chee tat :)