UOL Group's net profit up 4% due to higher sales of condos
Property developer upbeat on Singapore residential market, gloomier on UK
TOMOMI KIKUCHI, Nikkei staff writer
SINGAPORE -- Singaporean property developer UOL Group's net profit for the first quarter ended in March was up 4% on the year to 80.2 million Singapore dollars ($57 million), mainly thanks to higher sales from condominiums in its home market.
UOL's revenue for the quarter grew 6% on the year to $350.6 million, with higher revenue from two ongoing residential projects in Singapore. In a press release on Friday, the company said it was seeing positive sentiment in Singapore's property market. "Conditions in Singapore's private residential market appear to be stabilizing following recent tweaks to property cooling measures and improved sentiment," the company said in its financial statement.
The market-cooling measures, including higher stamp duty for buyers and borrowing limits, had been phased in since 2009 to temper the overheated property market. In March this year, the government announced some relaxation of these measures, which included lowering the stamp duty for sellers.
The adjustment, which has been long awaited by Singaporean property developers, boosted private home sales in the city-state. Sales figures for private homes for the month more than doubled from a year ago to 1,780 units. UOL also said the pressure on office rents has somewhat decreased, with more companies taking up office space and supply expected to reduce in the near term.
Meanwhile, UOL expects economic and political uncertainties in the U.K. to "weigh on the London property market" as the country grapples with the impact of its decision to leave the European Union. But the effect on UOL should be mitigated as the central London area where UOL's office and mixed-use properties are located is expected to see a limited supply of properties.
Revenue from hotel operations fell slightly, by less than 1% to S$104.6 million, partially due to refurbishments at its hotel in Penang, Malaysia. Looking ahead, the hospitality sector in Asia-Pacific "could be affected by the uncertain economic outlook," warned UOL.
The company is expanding its global footprint in the segment, operating hotels under the Pan Pacific and Parkroyal brands. In March, it announced the acquisition of a 396-room Hilton hotel in Melbourne, Australia. Upon completion of the purchase, UOL plans to rebrand the hotel to the Pan Pacific brand.