OPERATIONS AND MARKET REVIEW PROPERTY DEVELOPMENT Singapore The property market remained stable in 2023 despite facing some headwinds. Private home prices rose by 6.7%, lower than the increase of 8.6% in 2022. Transactions also moderated as developers sold 6,421 units excluding Executive Condominiums (ECs), reflecting a 9.6% decline compared to 7,099 units sold in 2022. The transaction volume decreased mainly due to cautious buying sentiment caused by high interest rates, property cooling measures, geopolitical concerns and the challenging economy. For FY 2023, the Group and its joint venture (JV) associates sold 730 units including ECs, with a total sales value of $1.5 billion (FY 2022: 1,487 units with a total sales value of $2.9 billion). The sales were mainly attributed to the launch of two projects during the year. Tembusu Grand, located in the heart of Katong, was launched in April. To date, 381 units (60%) of the 638-unit JV project have been sold.1 In July, the Group launched The Myst, a 408-unit residential development along Upper Bukit Timah Road. To date, 210 units (51%) have been sold.1 In FY 2023, three projects were fully sold – Haus on Handy, Amber Park and the 407-unit Piccadilly Grand. Five projects obtained their Temporary Occupation Permits (TOPs) in FY 2023: Completed Projects Units % Sold1 Jan Piermont Grand2 820 Fully sold Apr Haus on Handy 188 Fully sold Boulevard 882 154 91% Oct Sengkang Grand Residences2 Phase 1 680 Fully sold Nov Phase 2 Dec Amber Park2 592 Fully sold Irwell Hill Residences (540 units) is expected to obtain TOP in 2025. The project is almost fully sold, with only two units remaining. To replenish its landbank, the Group acquired two sites in 2H 2023. In September, it secured a Government Land Sales (GLS) site at Champions Way for $294.9 million or $904 psf ppr. The site is within minutes' walk to Woodlands South MRT station and will comprise 348 residential units and an Early Childhood Development Centre. In November, the Group clinched another prime GLS site at Lorong 1 Toa Payoh with JV partners Frasers Property and Sekisui House for $968 million. The expansive 169,458 square feet (sq ft) site is a short walk to Braddell MRT station. Subject to approvals, the plan is to develop 777 residential units, making it the first new residential development in Toa Payoh in eight years. In January 2024, the Group launched the 512-unit EC project Lumina Grand at Bukit Batok West Avenue 5. Located close to the Jurong Innovation and Lake Districts and the upcoming Tengah Town, it offers seamless connectivity with three MRT stations in the vicinity, as well as a bus interchange. Being the first and likely the only EC launch in 2024, it was well received with 269 units (53%) snapped up on the launch weekend. To date, the project is around 70% sold. In the recent Budget 2024 announcement, the Government made some concessions for developers on the land Additional Buyer’s Stamp Duty (ABSD) by progressively reducing the amount of remissible ABSD payable once 90% sales have been achieved. In addition, ABSD payment affecting singles was also relaxed for those downsizing to smaller units. In 2H 2024, the Group is planning to launch two new residential projects. The first is located at Champions Way in Woodlands with 348 units, while the second is Union Square Residences located on the former Central Square site opposite the river from Clarke Quay with 366 units. Haus on Handy I Singapore Tembusu Grand Sales Gallery I Singapore Notes: 1 As at 29 February 2024. 2 JV project. small land plot at Tanglin Shopping Centre in 1H 2023 and strata units in Citilink Warehouse Complex recorded in 2H 2023. Comparatively, substantial pre-tax profits recognised for FY 2022 was due to profit from the collective sale of Tanglin Shopping Centre and Golden Mile Complex accounted in 2H 2022, partially offset by impairment losses made on investment properties of $35.7 million. OTHERS Revenue, comprising mainly income from building maintenance contracts, project management, club operations, laundry services and dividend income, increased by $11.2 million to $200.5 million (FY 2022: $189.3 million) for FY 2023. The increase for FY 2023 was due to higher project management fees earned. Pre-tax loss for this segment decreased by $56.6 million to $14.7 million (FY 2022: pre-tax loss of $71.3 million) for FY 2023. Included in pre-tax losses for FY 2022 were impairment loss of $62.7 million made on loans granted to Sincere Property Group and $18.0 million made on US denominated bonds issued by Sincere Property which the Group had subscribed to, totalling $80.7 million. REVENUE BY BUSINESS SEGMENT ($ MILLION) 1,382 161 1,381 1,383 341 (9%) (3%) 40% 384 189 (71) 2,793 340 1,499 189 449 72% (41) 200 (15) Property Development Property Development Hotel Operations Hotel Operations Investment Properties Investment Properties Others Others PROFIT BEFORE TAX BY BUSINESS SEGMENT* ($ MILLION) REVENUE BY BUSINESS SEGMENT PROFIT BEFORE TAX BY BUSINESS SEGMENT* $472.6 million EBITDA BY BUSINESS SEGMENT 2022 2023 4% 3% 9% 18% 30% 37% 57% 42% $4.9 billion $1.1 billion Property Development Hotel Operations Investment Properties Others * Includes share of after-tax profit of associates and joint ventures. FINANCIAL REVIEW BUSINESS OVERVIEW ANNUAL REPORT 2023 95 94 BUSINESS OVERVIEW CITY DEVELOPMENTS LIMITED
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