CapitaLand, Southeast Asia’s biggest developer, said second-quarter net income increased 17%, boosted by the sale of homes in projects such as the Interlace and d’Leedon in Singapore.
Net income rose to $399 million in the quarter ended June 30, from $339.7 million a year earlier, the company said today in a statement to the Singapore exchange. Revenue climbed 25% to $740.4 million from $592.5 million a year earlier. CapitaLand restated last year’s results to comply with an accounting policy that became effective Jan. 1.
The Singapore-based developer is benefiting from residential sales as the city’s housing prices climbed to a record in the second quarter, according to government data. The company, which has investments ranging from malls, office buildings to serviced apartments, also expanded in markets including China and Vietnam.
“While global economic growth remains patchy and despite concerns about Europe’s debt crisis and the U.S. budget deficit, Asia continues to present growth prospects,” Chairman Richard Hu said in the statement. “We expect to expand our businesses and continue to actively pursue investment opportunities in our core and secondary markets.”
CapitaLand’s core markets are Singapore, China and Australia, while Malaysia, Vietnam and Europe make up its secondary markets.
NEW INVESTMENTS
The stock was unchanged at $2.80 as of 1:36 p.m. in Singapore trading. Before today, the stock had lost 25% this year, compared with the 1.9% decline in the Singapore benchmark Straits Times Index.
CapitaLand said it committed about $5 billion of new investments in Singapore, China, Australia and Vietnam in the first half of the year.
The company expects to exceed its initial target for new investments of $5 billion to $6 billion this year, Chief Executive Officer Liew Mun Leong said at a press briefing in Singapore today. He also said CapitaLand will seek acquisitions when price expectations have moderated.
CapitaLand said earlier this year it has a 15% share of the Singapore private housing market. The company said today it will meet its aim to sell 1,700 apartment units in 2011. The company has a pipeline of 2,700 homes in the city to be introduced in the next three years, it reiterated today.
CHINA, SINGAPORE CURBS
Liew said government measures in China and Singapore to curb speculative home-buying will help stabilize the countries’ real estate markets. He said he’s confident the Singapore private home market will continue to grow. China and Singapore are the company’s biggest markets, each making up 36% of its S$29 billion of assets as of June, according to a slide presentation today.
China’s home sales “volume has gone down because of the pressure, but the price has in fact been steady, resilient and in fact creeped up,” Liew said. “So this suggests that there is demand.”
CapitaLand said it has the capacity to build 22,000 homes in China over the next four to five years. The company’s pipeline of so-called value homes in China and Vietnam has increased to more than 4,800 units as it taps demand for lower- priced apartments, it said in the presentation today.
PRIVATE EQUITY FUNDS
The company wants to originate more private equity funds, especially in China, Chief Investment Officer Wen Khai Meng said at the briefing today. Assets under management for the group’s financial services unit grew to $31.7 billion, Wen said.
The appreciation of the Singapore dollar is an “ongoing concern” for the company, it said. More than 60% of CapitaLand’s first-half revenue and pretax profit came from outside the city state. The Singapore dollar has gained 12% against the U.S. currency in the past year, the best performer among the 10 most actively traded currencies in Asia excluding Japan.
CapitaLand also plans to expand its commercial business in Malaysia, India and Japan, it said at the briefing.
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