CITY DEVELOPMENTS LIMITED ANNUAL REPORT 2022 BUSINESS OVERVIEW 86 87 OPERATIONS AND MARKET REVIEW The Group’s sterling financial performance in 2022 demonstrated its execution ability to deliver on its Growth, Enhancement and Transformation (GET) strategy. In Singapore, the Group continued to be a market leader for private home sales with a strong development pipeline. Its asset rejuvenation and portfolio enhancement initiatives achieved improved occupancies and positive rental reversions. Fund management aspirations and capital recycling initiatives remain integral to the Group’s transformation strategy. In addition to growing its Assets Under Management (AUM), the Group continued to streamline its portfolio through several opportunistic asset divestments to unlock latent value while also building scale in new growth areas, like its Living Sector portfolio. PROPERTY DEVELOPMENT Singapore The property market remained resilient, with private home prices increasing by 8.6% in 2022 compared to the 10.6% increase in 2021. Developers sold 7,099 units excluding Executive Condominiums (ECs) in 2022, reflecting a 46% dip in transaction volume due to fewer new launches, low inventory and buyers’ concerns over rising interest rates. For FY 2022, the Group and its joint venture (JV) associates sold 1,487 units including ECs, with a total sales value of $2.9 billion (FY 2021: 2,185 units with a total sales value of $4.3 billion). The sales were largely attributed to the successful launch of two projects during the year. With strong sales achieved and low inventory, the Group acquired four sites in 2022 as part of its landbank replenishment strategy. Three sites were secured in 1H 2022. In January, the Group secured a prime 210,623 sq ft Government Land Sales (GLS) site at Jalan Tembusu for $768 million (or $1,302 psf ppr). Located near the upcoming Tanjong Katong MRT station, the site will be developed into a luxury condominium with 638 units. Copen Grand | Singapore Artist’s Impression Piccadilly Grand | Singapore Artist’s Impression Project Location Launched Total Units Units Sold2 Irwell Hill Residences Irwell Bank Road April 2021 540 514 (95%) CanningHill Piers1 Clarke Quay November 2021 696 676 (97%) Boulevard 881 Orchard Boulevard March 2019 154 135 (88%) Amber Park1 Amber Road May 2019 592 586 (99%) Nouvel 183 Anderson Road July 2019 156 154 (99%) Haus on Handy Handy Road July 2019 188 178 (95%) 1 JV project 2 As at 28 February 2023 3 Divested project marketed by CDL Healthy Sales for Existing Inventory of Projects In May, the Group launched the 407unit Piccadilly Grand, a JV integrated project on Northumberland Road, linked to Farrer Park MRT station. To date, 350 units (86%) have been sold2. In October, the Group launched Copen Grand EC at Tengah New Town. The 639-unit JV project sold 73% of its units on launch day and was fully sold out a month after its launch. Sales of the Group’s earlier launched projects also progressed well and are substantially sold. In March, the $315 million Central Square acquisition was completed. Subject to authorities’ approval, the property will be redeveloped alongside the Group’s Central Mall properties into an enlarged mixed-use development comprising office, retail, hospitality and residential. In April, the Group completed the offmarket acquisition of a 179,007 sq ft site at 798 and 800 Upper Bukit Timah Road for $126.3 million. The Group intends to redevelop the site into a residential project with 408 units. The Group also successfully acquired a GLS EC site at Bukit Batok West Avenue 5 in September. It won the 178,936 sq ft site at $336.1 million or $626 psf ppr, beating the next highest bidder by a mere 0.2% or $1 psf ppr. The site is located at the junction of Bukit Batok West Avenue 5 and Bukit Batok Road, opposite the upcoming Tengah New Town and with three MRT stations in the vicinity. A 510-unit EC project is being planned and will incorporate Super Low Energy (SLE) features. The Group obtained Temporary Occupation Permit (TOP) for its fully sold 718-unit Whistler Grand (including two retail units) in April. All units have been handed over to purchasers. Given the fast-rising interest rates, the Government introduced another round of cooling measures in September 2022 to ensure prudent borrowing. The base interest rate for the computation of loans was adjusted from 3.5% to 4.0%. Other measures were more targeted at the HDB market – Loan-to-Value (LTV) was reduced to 80% from 85%, and a 15-month wait for private property owners wishing to purchase a HDB resale flat was implemented. With a limited supply of new residential units onstream and a recovering economy, the market is expected to remain stable with sustained interest from local and foreign buyers. INTERNATIONAL Australia In Melbourne, the Group’s 60-unit Fitzroy Fitzroy is 40% presold, and The Marker, where 82% of its 198 units have been sold to date2, achieved practical completion in September 2022. In Brisbane, the 215unit Brickworks Park has sold 47% of the total units to date2 and has commenced its early construction. The 97-unit Treetops at Kenmore JV project has sold 46% of the total units to date2 and the construction of Stage 1 started in Q4 2022. UK The Group’s prime developments in Belgravia, Chelsea and Teddington continue to receive enquiries from both local and international buyers. The former Stag Brewery site in Mortlake and three other development projects in London by the Group continue to be in various stages of planning. China In FY 2022, the Group’s wholly-owned subsidiary, CDL China Limited, and its JV associates sold 88 residential, office and retail units, with a total sales value of RMB 349 million ($67.4 million). In Suzhou, Hong Leong City Center (HLCC), a mixed-use development in Suzhou Industrial Park, has sold 1,670 (92%) of its 1,813 residential and retail units to date2. In Shanghai, Hongqiao Royal Lake, a luxury development in the prime residential enclave of Qingpu District, has sold 74 (87%) out of the 85 villas to date2. In Shenzhen, Hong Leong Technology Park Shenzhen (previously named Shenzhen Longgang Tusincere Tech Park) has sold 389 units comprising apartments, office and retail units with a sales value of RMB 1.05 billion ($202.8 million)2 ever since the Group acquired this project in March 2021. INVESTMENT PROPERTIES Singapore As at 31 December 2022, the Group’s office portfolio4 reported a committed occupancy of 95.2%, above the island-wide occupancy of 88.7%5. Republic Plaza, the Group’s flagship Grade A office building, is 97.6% occupied with a full-year positive rental reversion of 8.4%. King’s Centre, where Asset Enhancement Initiative (AEI) works were completed in 1H 2022, has achieved 98.4% occupancy, with a full-year rental reversion of 8.9%. The Group’s retail portfolio4 also remained healthy, with a committed occupancy of 96.1%, higher than the islandwide occupancy of 92.9%5. The strong performance was driven by City Square Mall, which is 93.5% occupied, and Palais Renaissance, which completed an AEI in 1H 2022, achieving 98.2% occupancy. The gain in traction from the removal of COVID-19 restrictions, coupled with the reopening of global economies in 2022, led to the recovery of the retail sector, injecting much vibrancy into the market once again. The Group’s retail portfolio’s average monthly footfall in 2022 rose 21.7% yearon-year (y-o-y) and has recovered to over 73% of pre-COVID levels. In tandem with this, the average monthly tenants’ sales increased by 20.1% y-o-y, exceeding pre-COVID levels. While the retail market is bustling again with increased shopper traffic, retailers remain cautious with looming economic uncertainties and rising operating costs. The redevelopment of Central Mall and Central Square is at an advanced planning stage and they will be redeveloped under the Urban Redevelopment Authority’s Strategic Development Incentive Scheme. Provisional Permission has been obtained for a mixed-use development comprising commercial, hospitality and residential components yielding a GFA uplift of 67% to approximately 735,500 sq ft 4 Includes South Beach (in accordance with CDL’s proportionate ownership). Excludes Central Mall Office Tower, Central Mall Conservation Unit and 11 Tampines Concourse. 5 Based on Urban Redevelopment Authority’s real estate statistics for Q4 2022.
RkJQdWJsaXNoZXIy ODIwNTc=